President Obama would like to once again extend the Bush tax cuts, but only for another year, and only for those of us who make under $250,000 a year.
(It should also be explained that the tax on $250,000 does not apply to a person’s gross income; it applies only to the Adjusted Gross Income, which is what is left after all the deductions and credits and so forth. A person paying taxes on $250,000 would have to gross a lot more than that to qualify. Also, the higher rate doesn’t apply to the whole $250,000; only the amount over it. So if your AGI is $260,000, you pay the higher rate on the $10,000, not the whole nut. An additional 3% on $10,000 is $300, which, to someone with that kind of money, is lunch. Also, if you have that kind of income and you haven’t got an accountant that can find a way to shelter your income (hello, Mitt), then you deserve to pay whatever the IRS can get out of you.)
As you’ll remember, the whole lot of the Bush tax cuts were supposed to expire in December 2010, and the whole idea of them in the first place was that they were to be temporary just to get the economy roaring back when Mr. Bush was president. (Hmm. How’d that work out?) The deal with the GOP to extend them expires in December.
This time the extension of just the cuts for the middle class (making up to $249,999.99 is middle class? Who knew?) is being done for obvious political reasons: it puts the Democrats on the side of tax cuts and forces the GOP be against them since they want everybody — which to them means more than just the “common people” — to keep their tax cuts and even get some more because the 35% rate that the wealthy are struggling under is such a horrible burden that they have to send their money overseas to protect it.
Judging from the fuming and the foaming from the Republicans, it looks like Mr. Obama has pulled yet another rabbit out of his hat, at least in terms of campaign positioning: he’s on the side of the middle class while Mitt Romney and rich are on the other. It will make for some pretty good ads in Ohio and the other swing states, and it will be up to the Republicans to explain why they’re going to vote against it.
Trying to gin up sympathy for the rich? Good luck with that.