Yes We Can! Long Island 2012Several YWC!LI members have asked, “What is the immediate and real impact of President Obama’s proposed tax plan, cutting taxes on the first $250,000 of their joint income ($200,000 for single filers), basically extending the Bush tax cuts for all except the top 2 or 3 % income earners?” (Note: top income earners would only see a tax increase for their portion of income exceeding $250,000. For example, someone with a $275,000 taxable income would only pay an additional tax on the $25,000.)
They also ask, “What would be the impact on the middle class if the Republicans continue to hold the entire tax bill hostage in order to provide a windfall tax cut for millionaires and billionaires?”
So today we’re trying out something new to cut through the political back-and-forth you are hearing every day. We are breaking down an issue affecting American families into simple, understandable terms. The table below shows the actual impact on a married couple filing jointly for various income levels. It is based on taxable incomes, which are typically thousands or even tens of thousands less than gross income.
As you can see, the impact of the Obama tax plan for a family earning more than $300,000 is less than 1% of gross income; for families who earn from $400,000 up to $1,000,000 a year, it is less than 2%.
If the Republicans continue to hold the entire Obama bill hostage to the wealthiest Americans as they are threatening, the impact on the working poor families will be almost 3% and approximately 5% on middle class families.
This Republican effort is an attempt to give a tax break of tens and hundreds of thousands of dollars to millionaires and billionaires. We simply can’t afford to give the wealthiest Americans these big tax cuts that would add $700 billion to the deficit. According to non partisan Congressional Budget Office (CBO), this would be one of the least effective ways to grow our economy and just about the worst way to help create jobs.
| Taxable Income | Tax Increase If Republicans Vote No (again) | The Obama’s Administration Propsal | ||
| $ Increase | % Increase | $ Increase | % Increase | |
| $30,000 |
$837
|
2.8%
|
$0
|
0.0%
|
| $60,000 |
$2,943
|
4.9%
|
$0
|
0.0%
|
| $120,000 |
$5,963
|
5.0%
|
$0
|
0.0%
|
| $240,000 |
$12,470
|
5.2%
|
$0
|
0.0%
|
| $300,000 |
$14,702
|
4.9%
|
$2,722
|
0.9%
|
| $400,000 |
$20,511
|
5.1%
|
$5,722
|
1.4%
|
| $500,000 |
$24,111
|
4.8%
|
$8,722
|
1.7%
|
| $1,000,000 |
$42,111
|
4.2%
|
$18,790
|
1.9%
|
Assumptions:
- Taxable income is after all deductions and exemptions but not tax credits (ex: solar energy tax credit)
- The Obama proposal includes an increase of 3% on top two existing tax brackets (ex: top bracket becomes 38% for married couples filling jointly with taxable income above $373,000 but only on the amount exceeding $250,000)
Excellent!!!!!