BEFORE YOU SAY THIS DOES NOT PERTAIN TO YOU AND YOU HAD NOTHING TO DO WITH IT LET ME SHOW YOU HOW THAT IS NOT CORRECT.
– When President Clinton left office in Jan 2000, he left the government with a surplus of cash on hand, more than what we needed, about $1.6 Trillion dollars.
- When President Bush took over he signed Economic Growth and Tax Relief Reconciliation Act (for those of you who remember, thesis when you all received checks in the mail for either $300 or $600 if you were married at the time.
The law he signed had many benefits, however, it went too far. Bush practically used every dollar Clinton left behind with taxes for the rich, defense spending increases and new lower tax rates which would not continue to bring in the same amount of money. Clinton set him up to keep bringing in the cash, but Bush cut the income and gave away the savings. The equivalence to me quitting my job and using everything in the bank.
When the rainy day came, we had nothing. These are called “The Bush Tax Cuts” and they are still the issue in this 2012 election (a decade later).
(CURRENT) After viewing Mitt Romney’s on Meet The Press on Sunday morning, I took it upon myself to backtrack into the truth of Mr. Romney’s tax plan. Not surprising, its looks identical to the BushTax Cuts. What he says doesn’t appear to be what he has written in his own plan and what he has proposed. It’s somewhat complicated; but that’s by design, so let’s see if you can follow the crumbs.
His major claim on the show was that his tax plan will not give a tax cut to the rich. I guess it just depends on who you call rich? So, two things are done here. We spell out what exactly IS Mr. Romney’s tax plan and then to show you in his own words how he has changed the story over the last year. Team Romney keeps saying they will pay for his plan with “spending cuts”…cuts to what though?
According to Romney’s website these are two areas of concern: individuals and Corporations. Not sure why they are separated considering Mr. Romney believes “…corporations are people too…”.
Nevertheless, for Individuals:
1. Make permanent, across-the-board 20 percent cut in marginal rates
This does not help the average middle class family. Marginal Tax Rates is the amount of taxes you pay over the average tax rate. For example, if you earn $215,450 you are taxed at 28%. But, any investments, education, additional income (believe it or not, this is actually called “Extra Effort”) will be taxed at a different rate which is called a marginal rate; anything above your base basically.
Well Mitt Romney will cut that rate by 20% – I am not here to say what fair, I only want to better explain what’s at stake in the election. How many people do you know earning $215,xxx who earn additional income above that? What the press wants to know is, if Mr. Romney cuts this revenue or income that the government uses to pay its bills, where will he make up the difference? He says just cut spending. They ask, where would you cut? He says, I’ll tell you “…after the election…”.
2. Maintain current tax rates on interest, dividends, and capital gains:
Capital Gains is any money you earn on your investment. If you invest $100 but you earn $300, your capital gains tax is paid for the $300 you earned as additional income, not the $100 investment. How many people do you know that earn additional income off their investments; that’s if you know anyone with them to begin with.
This portion of Mr. Romney’s plan also has no major benefit to the middle class because they have already had to raid whatever was left in their 401k’s after the housing bubble to pay for college, keep their homes and etc. With interest rates already at 0%, there hasn’t been any “gains”.
3. Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
This section is geared to those making above $200,xxx. Mr. Romney wants to eliminate all taxes on interest, dividends and capital gains. This is just eliminating taxes on their investments, IF THEY HAVE ANY.
4. Eliminate the Death Tax
If anyone dies and leaves you anything of value that is considered to additional income, you will pay taxes on that additional income. Period.
Every American does not have a rich uncle, so making this a part of your economic recovery may not create the most impact with regard to the state of the economy.
5. Repeal the Alternative Minimum Tax (AMT)
Is an additional tax created for those with really high incomes. This AMT was created to keep many of the countries wealthiest people from being able to find ways to pay little or no taxes. There are all types of tools they have used in the past, so the AMT was a means to help prevent that.
Mr. Romney wants to repeal the tax law that enforces this, why? I’ll let you decide.
OCTOBER 12, 2011: “..I don’t worry about the one percent, the rich are doing fine, I am not giving them a tax cut”. This same month, he came out against extending the payroll tax cut put in place by President Obama to help lower income workers. There used to be a tax on your checks before Obama took office, now it’s gone. Mr. Romney wants that tax put back to help pay for a tax cut for the wealthier folks. That’s a fact.
NOVEMBER 3, 2011: Romney repeated on a news interview, WTVT in Tampa that, “I’m not proposing any new tax cuts for the rich”. He was technically right, he was proposing the same old ones.
FEBRUARY 2012: Romney unveiled his new tax plan which gave a $264,000 tax cut to the top one percent of income earners, while the next day he appeared at the GOP presidential primary debates saying his same old line, “I’m not proposing any new tax cuts for the rich”. He even angered the other candidates because they knew he was lying then, somehow, they forgave him, because they all have endorsed him for President now.
SEPTEMBER 2012: “…I am proposing a 20% reduction (fancy word for cut) across the board, including the top earners (fancy term for rich)…”. The problem is the “board” Romney is talking about is the investments kind. Poor people aren’t going to be included in that “across the board”. Most middle class earners don’t have disposable cash to make investments to be included “across the board”.
The fact that Romney wants to make the Bush Tax Cuts permanent cut on the wealthiest folks is not as much the issue, the concern however is, you cannot take money out of the system without either putting some back in to cover the shortage OR make drastic cuts on things most people need in order to give the richer folks a tax cut they don’t need.
An even bigger problem, when asked which of the two he will do to deliver on his promise to balance the budget, Romney refuses to say. Not that he doesn’t know, he just refuses to reveal it UNTIL AFTER THE ELECTION, he says. The Tax Policy Center (TPC) looked through Romney’s plan and found that it is “mathematically impossible” to cut taxes, increase spending on Defense (even though the Pentagon has said they don’t need more money), and balance the budget. The TPC went on to say Romney’s plan will be more damaging than the taxes cuts Bush gave.
What President Obama suggests is to return the tax rates back to what is called “The Clinton Era”, when congress approved it then, the economy took off and everyone prospered, not just the wealthiest folks. Obama insists that everyone will be affected as was in the past, when all entitlements will have to be cut on the poorest americans just pay for Romney’s tax plan. The money has to come from somewhere.
THIS is the argument and THIS is the difference between these two tax plans. If you are old enough to vote, you are old enough to remember how both worked out for you or your parents.
Thats my story and um sticking to it.