The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Beck Goes Ballistic & Obama’s Numbers Don’t Add Up – There aren’t enough taxpayers.

Posted by iusbvision on February 27, 2009

See the little wall of text below, it took the income from the top 2% of wage earners as Obama suggested and see how much money would be raised by upping their income tax rate to 39.6% as proposed.

2006 was a very good year for the economy and that 2% paid %522 billion which is far short of what Obama says will come in.

Now the economy is a mess, and by raising the tax rates those people (and small businesses) will invest less, and try to keep money where it will not be taxed, so raising the rate will not bring in as much revenue as the static model says. This will also raise prices which makes sure people buy less, which causes more unemployment and less taxes.

This is why you do NOT raise taxes in a recession, especially on the evil rich who you are counting on to move some money to get the economy rolling.

But hey, if we took every penny from the top 2% of tax filers…..well here, Glenn Beck has a tax expert who will explain it to you….

Wall Street Journal:

[Obama proposed that we] end “tax breaks for the wealthiest 2% of Americans,” and he promised that households earning less than $250,000 won’t see their taxes increased by “one single dime.”This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and “the wealthiest 2%.” Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Note that federal income taxes are already “progressive” with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He’d also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won’t come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.

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