President Obama today said he favors extending tax cuts for those making less than $250,000. His administration today has also promised to veto an extension of tax cuts for everybody. So in effect if Congress votes to extend the tax cut for everyone Obama favors raising taxes on everyone. For those of you who believe that President Obama is being a champion of the middle class let me make the following points:
First off he’s not cutting taxes… there’s no new tax cuts here for the middle class. He is only saying he doesn’t want to raise our taxes – for a year. He wants to raise taxes on people making more than $250,000. That is the benchmark that went from $1 million dollar down to $250,000 during his last campaign. So if anyone tells you that President Obama is cutting taxes they are a liar.
Secondly this policy will hurt job creation which hurts the middle class and those in poverty. How many sole proprietorships and LLCs will this impact? Obama says nationally this will only impact 3% of small businesses, provided that number is correct, and I have my doubts, how many jobs are produced by those businesses?
Third, how much does the bottom threshold of the “top 5%” of our earners actually make. Well there’s a good reason to believe it is south of $250,000. Try $154,643 based on the latest information released to the public. Since the number was consistently lowered during the 2008 campaign can we expect the same this time around?
Fourth, he’s already raising taxes on the middle class via the Patient Protection and Affordable Care Act, seven times actually:
1. The Obamacare Individual Mandate Excise Tax: Starting in 2014, anyone not buying “qualifying” health insurance – as defined by Obama-appointed bureaucrats — must pay an income surtax according to the higher of the following:
1 Adult 2 Adults 3+ Adults 2014 1% AGI/$95 1% AGI/$190 1% AGI/$285 2015 2% AGI/$325 2% AGI/$650 2% AGI/$975 2016+ 2.5% AGI/$695 2.5% AGI/$1390 2.5% AGI/$2085
2. The Obamacare Medicine Cabinet Tax: This tax took effect in January 2011 and prevents Americans from being able to use their health savings account (HSA),flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
3. The Obamacare Flexible Spending Account Cap – aka “Special Needs Kids Tax”: Starting in January 2013, Obamacare imposes a cap on FSAs of $2500 (now unlimited under federal law). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
4. The Obamacare "Haircut" to the Medical Itemized Deduction from 7.5% to 10% of AGI: Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). Beginning in January 2013, this new Obamacare provision imposes a threshold of 10 percent of AGI.
5. The Obamacare HSA Withdrawal Tax Hike: This provision, which took effect in January 2011, increases the tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
6. The Obamacare Tax on Indoor Tanning Services: Since July of 2010, Americans using indoor tanning salons face a new 10 percent excise tax.
7. Obamacare Excise Tax on Comprehensive Health Insurance Plans: Starting in 2018, this provision imposes a new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher thresholds exists for early retirees and those in high-risk professions.
None of the above tax increases contain any exemption whatsoever for families making less than $250,000 per year.
Then there’s the 13 additional taxes he’s adding for those who make $250,000 or above via Obamacare.
President Obama isn’t looking out for the middle class, he never has. He’s looking to say whatever he needs to say in order to take your mind off of his actual record and the stagnant employment numbers.
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