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Obama Tax Plan

October 28, 2008

Obama says he will limit tax increases to those making $250,000 per year or more and will give a tax cut to 95% of working Americans.  The problem is that he is not counting the fact that he plans to let the Bush tax cuts lapse which will mean increases for almost all taxpayers.  Also, he plans on raising the cap on the 12.4% Social Security tax from $94,700 to $249,999.  Ned Barnett has a good article at American Thinker explaining these issues:

No matter what Senator Obama calls it, requiring us to pay more taxes amounts to a tax increase.  This got me wondering what other Americans will have to pay when the tax cuts lapse.

For a married family, filing jointly and earning $75,000 a year, this increase will be $3,074.  For those making just $50,000, this increase will be $1,512.  Despite Senator Obama’s claim, even struggling American families making just $25,000 a year will see a tax increase — they’ll pay $715 more in 2010 than they did in 2007.  Across the board, when the tax cuts lapse, working Americans will see significant increases in their taxes, even if their household income is as low as $25,000.  See the tables at the end of this article.

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Senator Obama is willfully deceiving you and me when he says that no one making under $250,000 will see an increase in their taxes.  If I were keeping score, I’d call that Tax Lie #1.

The next loophole involves the payroll tax that you pay to support the Social Security system. Currently, there is an inflation-adjusted cap, and according to the non-profit Tax Foundation, in 2006 — the most recent year for which tax data is available — only the first $94,700 of an unmarried individual’s earnings were subject to the 12.4 percent payroll tax. However, Senator Obama has proposed lifting that cap, adding an additional 12.4 percent tax on every dollar earned above that cap — and in spite of his promise, impacting all those who earn between $94,700 and $249,999.

Obama also plans on increasing the capital gains tax from 15% to 20%.  So anyone who sells off some investment will pay more taxes.  Want to put your child through college with some investment earnings?  Pay up.  He also wants to increase taxes on businesses.  Who does he think will pay for those tax increases?  Right – everyone.

In review, under an Obama presidency, every person in the United States will see a tax increase in some form whether it be through the lapsing of the Bush tax cuts, the increase in the Social Security tax cap, the capital gains increase, or the higher prices brought on by tax increases on businesses.

Welcome to the Obama Tax Relief Plan.

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