President Obama: Warrior for the middle class…maybe

For all the talk about Democrats generally, and the President specifically being champions for the middle class, they refused to even vote on a bill which would have exempted 99% of American taxpayers from the looming “fiscal cliff”.  No, instead, before they would finally support a tax increase bill, it had to include increases in taxes on 77% of American households.

(WSJ) — The fiscal cliff bill’s impact would be far-reaching for American taxpayers, and particularly painful for very high-income households, according to a new analysis.

About 77% of American households would see a tax increase compared to their 2012 tax levels, according to the analysis by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute.

The biggest impact for most households comes from the expiration of a two-percentage-point payroll-tax break that existed for 2011 and 2012. It basically hits all working people. But the bill also contains sizable tax increases for the wealthy, compared with 2012 levels. (Of course, now that the fiscal cliff has arrived, supporters argue that the legislation actually represents a tax cut, because tax rates technically went up for just about everyone at midnight Monday.)

The average tax increase for U.S. households paying higher taxes would be about $1,635. But that figure is somewhat skewed by the significant tax increases in store for high-income households under the bill. Almost 100% of households with incomes over $500,000 would see a tax increase. For households between $500,000 and $1 million, it would average $15,055. For households with incomes over $1 million, it would average $171,330.

In case you were wondering, the middle-class is defined as the middle three quintiles of income earners.  Economically speaking, the lowest quintile is considered lower-class (or low income earners), the top quintile is upper-class (or high income earners), and the middle three are what is considered the middle-class.  Do the math, 77% includes nearly every middle-class family.

(CNN) — Nobody in either party wants the middle class, identified as families making less than $250,000 a year, to see taxes increase at the end of the year when lower rates set during the administration of former President George W. Bush will expire, Obama said.

“That makes no sense. It would be bad for the economy,” he told a White House gathering of what aides described as middle class Americans. “Let’s extend middle class tax cuts right now. Let’s do that right now. That one step would give millions of families, 98% of Americans, 97% of small businesses, the certainty that they need going into the new year.”

So it makes no sense to raise taxes on more than the top 2% of Americans, have I got that right, Mr. President?  Well, you just signed off on an increase for 77%.  In the words of his predecessor President George W. Bush, “The man’s practicing fuzzy math again”.

Here’s a little something to give the tax hikes some perspective:

Tax Hike In Perspective

Comments

  1. I have to say, I’m a little surprised that the “progressive tax system” fans haven’t started screaming about the regressive nature of the tax increase on the poor and middle class because the fiscal cliff bill didn’t keep the payroll tax holiday.

    It also doesn’t address Al Gores frantic attempts to sell his “TV network” to Al Jazeera before the end of the year to avoid the higher tax rates.

    Hypocritical much?

  2. Enough people believed that Obama and the Democrats were warriors for the middle class. But having just effectively raised taxes on 77% of the people, he really made sure to stick it to anyone with a job, basically. Leaving the poorest Americans to share no burden, Obama has shown who he truly cares about, and it ain’t the middle class.

    #WhyIsMyPaycheckLessThisWeek

  3. Not just the middle class, but this hits all the folks who don’t even pay income tax. It’s interesting to hear the Dems (Howard Dean was the first, but I heard some more today) who at least are honest about wanting to raise income taxes on the “middle class” as well.

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