There is a real difference between the tax proposals being presented by Mitt Romney and President Obama. On one hand – you have Mitt Romney who is proposing the LARGEST tax cut for the 1% of wealthiest households in American history…or a 40% tax cut. Put another way – under Mitt Romney’s plan – anyone making $3 million a year will receive a $500,000 tax cut PER YEAR. That’s just offensive. Of course…tax cuts aren’t free and they’re either going to be paid for with spending cuts or they’re going to be paid for by borrowing more money.
The notion that someone who already has millions of dollars in the bank will somehow spend an ever greater share of their wealth simply because they have even LARGER tax cuts than they did before is asinine. If you take those tax cuts in the aggregate and give them to the middle class – the middle class will collectively spend significantly more of the “tax cuts” as there is very little saved thus benefiting the economy.
Obama’s plan would see an increase on the wealthiest while still managing to offer lower tax rates to 95% of working Americans than did President Bush. And since Republicans will not allow for investments in infrastructure – the next best option to stimulate the economy is tax cuts for the middle class. President Obama has decided to lay his claim to economic stimulus through tax cuts targeted DIRECTLY to those who will spend them as opposed to the Republican plan that believes in providing the vast, disproportionate amount to the wealthiest Americans…in the hopes that the wealth will “trickle down”. We’ve played that game for 30 years….and the results are in: It Doesn’t Work.
With Mitt Romney’s plan…revenues would be set around 17% of GDP which would ultimately lead to a Grover Norquist style of government. With revenues at 17% – the only possible option is privatizing Medicare and Social Security….taking a machete to programs that provide social safety nets to anyone in the bottom 95% of earners. Of course – only in a conservative America would 95% still equal a minority. Mitt Romney’s budget is a wink and a nod to his future donors…people who can be assured that they will be paying lower taxes and they won’t be having to pay for unnecessary social services like Medicare, Social Security, Medicaid, public schools, roads, etc. If one follows the inevitable cuts that are necessary to reach this budget (Romney has committed not to cutting the military), it is very hard to look at the Romney proposal as anything other than extreme.
Obama’s plan would raise revenues to 19.2 percent of GDP. Most of that would come from people making more than $250,000 a year. Back in September, the nonpartisan Tax Policy Center ran the numbers on his proposal — which is unchanged in the budget — and they estimated that taxpayers in the bottom 20 percent would pay an average federal tax rate of 1.8 percent, those in the middle 20 percent would pay 15.2 percent, and the top 1 percent would pay 36.3 percent.
Romney’s plan cuts taxes to about 17 percent of GDP. Most of those cuts would accrue to upper-income Americans. According to the Tax Policy Center, under Romney’s plan, taxpayers in the bottom 20 percent would pay a rate of 3.4 percent, those in the middle 20 percent would pay a rate of 15.6 percent, and the top 1 percent would pay 25.9 percent.
So low- and middle-income families would pay a bit more under Romney’s tax plan, but high-income families would pay a lot less.
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