The President Bush "Tax Cut" Extension Myth
I tweeted last week about a delusional AP article on the possible "hidden" middle class tax increase coming this year. The culprit? The moronically named "Make Work Pay" tax credit. Ugh! First of all, don't you collect a paycheck IF you work? Isn't that "pay?" Duh! Regardless, AP mentions the $30/month or so that "middle class" taxpayers receive, the only $60 billion it would cost to extend, etc... What AP fails to mention is the TRUE tax increase coming Jan 1, 2011... The expiration of the President George Bush tax cuts. Expiration would mean taxes go up. A tax increase. However, AP, Liberals, et al, NEVER use the term tax INCREASE when discussing the expiration of the Bush tax cuts. No, no, no... There is only talk about, "how we afford them," "tax cuts for the rich," etc... "Make Work Pay" isn't even a tax cut. It is a tax credit. VERY different. Unemployment is near 10% and somehow $30/month "Makes Work Pay?" What we really need is a "Make Hiring Pay" act! I have a good idea to start, make permanent the Bush tax cuts, make the long term capital gains rate 10%, 0% if you buy up mortgage debt, etc... Heck, how about a tax credit for those that waive their future Social Security payments? Now this would truly be helpful. I want to illustrate another mockery of tax justice quick... I just started working on my taxes. I use tax software as do most Americans. My first entry was a W-2 for a job held only in Jan/Feb this year (disclaimer, W-2 as tracked in my Quicken). Income $10,000, federal taxes $2,000, for a raw 20% rate. Imagine my surprise when my refund was $1,950! What the heck! How can we expect to reform entitlements when we can't even get American citizens to pay a bare minimum of taxes??? Ugh! Wait, it gets better... I had another W-2, again with about 20% in federal taxes. The result this time? I owed a net of $975. What? I had a +95% refund in federal taxes turn into a tax bill. Ugh! Ugh! Ugh! Now, I don't make HUGE bucks. I would encourage EVERYONE who uses tax software this year try the same. Enter a single W-2 with $10,000, $20,000, etc, in income and about 20% in federal taxes. See what you get for a refund. I do know the lowest tax rate is like 10% (thank you Bush!), but it isn't 0.25%. The truth here is that no matter if the Bush tax cuts are extended, or expire, WAY too many Americans still will have near ZERO tax liability while others, like myself, will pay their way. A society based on freedom and equality cannot stand with such lopsided policy.


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