This next post is being guest blogged by a close friend to Matt and I, Justin. He too is an engineer and has something to say about the Obama Tax plan. Enjoy.
(PS, if any of you would like to guest blog let either myself or Matt know what you are interested in writing and we can try to arrange something) So without further adieu, here is Justin
All during the past year we have heard and seen how Obama is going to cut taxes for 95% of the population. Sounds like a great idea, especially since I’d be affected by it. But there are hidden facts that Obama failed to convey to the American public.
First I’ll start with a little breakdown on the current tax structure. As of this year the top 1% paid 39.89% of all of America’s taxes, or roughly the same amount as the bottom 95%. The top 5% consists of 6.8 million people but pays 60% of all of our country’s income taxes.
Obama proposes to give 95% of working Americans a tax credit, free money, a hand out, whatever you want to call it. Add in further tax cuts and credits, that would come out to around 3.2 trillion dollars of debt in 10 years (McCain’s policy would cause 4.2 trillion in 10 years). Further than this though, Obama would add 900 billion in revenue through taxes to bring is total debt to 2.3 trillion. If he’s not taxing the middle class and below (since he stated he is cutting the bottom 95% taxes) to raise this 900 billion, he must be taxing someone….That of course is the top 5%, who would see further taxes raised to nearly 40%.
In fact, what Obama is doing is taking extra money from the richer people who already pay an amount equal to the other 95%, and give it to the poor who either pay no taxes and to 95% of the American working force. The problem is that those at the lower level of the top 5% have to make at least 358k per year, which means after taxes come home with less than half of their income since on top of the 39% marginal tax rate, they will pay another 104k per year in taxes. These are the people who invest in anything and everything, who are our bosses and make the economy run and who most importantly, give us jobs so that the economy and country can succeed.
What is the reward for making that much money if it will just be taken from you? Now you may be thinking, well that’s what taxes do and always have done, so how is Obama making things worse. Technically he’s not for the rest of us, but in the large scheme of things, we don’t matter as we don’t run the companies that make sure we all have jobs.
The top 1% would see their income drop by 9% after taxes and the top 5% by 2%. Yet the middle of all Americans would only see an increase of income by 2.2%. The bottom 25% though would see a 5.4% increase. These are people who work either minimum wage jobs or below, so the money they return back into the system helps very little. It is rather so they can live, not create opportunity for others.
All of the taxpaying Americans would see under a 1% increase in income, this is compared to an increase of nearly 4% with what could have been McCain’s policies. So even though the lower class is making more money, the total population is making a smaller amount than with McCain’s policy. So does giving hand outs and tax cuts for the poor lead to a healthy economy? Or would a more well rounded approach be best? Giving money to those that already have almost none to spend and invest would seem to do almost nothing to the economy. But if the money is spread throughout and trickles down in the form of investments and jobs this can only help everyone gain, as long as the government is willing to take the hit.
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