Untangling Obama's Tax Plans: An Assault on the Middle Class
In his major speech last week, President Obama called for tax hikes as a way of cutting the deficit. His plan’s lower deficits start in 2016. Aside from the fact this is woefully late, the plan centers on higher tax rates for upper income Americans. Because those tax hikes won’t nearly cover the deficit, the plan also calls for vast increases in tax collections from the middle class.
While Obama claims to only be targeting the rich and only relying partially on taxes to solve the deficit, reality is starkly different. More than half of his incomplete deficit reductions come from increased taxes, both higher rates on the rich and more collections from the middle class.
It gets worse.
The IRS releases data of total taxable income. Unsurprisingly, the middle class has the biggest cumulative total. The Wall Street Journal produced this image of total taxable income, to demonstrate how much the federal government would have to collect to solve its deficits:
The Journal used the graphic to explain that even if Obama taxed the richest 10% of Americans at a 100% rate, i.e. took all their income, he wouldn’t eliminate the deficit.
If tax hikes were used to solve the 2010 federal deficit of $1.3 trillion, our colleagues at The Heritage Foundation point out that income tax collections would have to more than double. Families would experience tax hikes like this:
For a family of four earning $50,000 that takes the standard deduction, its current tax bill of $766 would increase by almost $4,000. A similar family of four that earned $75,000 a year would see its tax liability of $4,500 increase by over $9,000 a year. If the same family earned $100,000, it would pay more than $15,600 above the $8,800 it actually paid in 2010.
President Obama’s plan is little more than continuing the liberal policy of tax and spend. Americans deserve real leadership, not more of the same.