Letting The Bush Tax Cuts Expire Will Only Hurt The Rich, Right?

02 Aug, 2010 by William Teach

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As we head deeper into the silly season, which occurs every two years, it appears as if one of the cute little liberal talking points about the tax cuts of 2001/2003 were only for the rich has truly rotted liberals brains. Facts are pesky things which, after all these years, still elude liberals, and now the talking point goes something like this:

Letting the tax cuts expire will only hurt the rich

Really? I’ve seen this comment or something similar dropped all around the blogosphere, particularly at left leaning sites, so, let’s test that theory, shall we (figures are for single filers)?

You made $50k. If the tax cuts are extended, your tax burden is $6,234. If lapsed, $6,836. Your burden would be $602 higher
You made $20k. Extended: $1,149. Lapsed: $1,575. Burden is $426 higher
You mad $100k. Extended: $18,932. Lapsed: $21,034. Burden is $2,102 higher

The lowest rate of 10% for those making between $0 and $8,735 goes away, reverting to 15% for $0 to $35,020. Those now in the 25% tax bracket, what is considered the true “middle class,” will see their rate jump to 28%.

Let’s say you are married, and you and your spouse each make $30k per year. Your burden will be $1,137 higher if the tax cuts expire. You can buy quite a bit of food and diapers with that, eh?

And let’s not forget that the top rate for long-term capital gains will rise from 15% to 20%, and the 0% rate for those in the lowest tax brackets will be replaced by a 10% long-term capital gains rate.

Obama didn’t lie, your taxes won’t go up by a single dime. They’ll go up by thousands and thousands of them.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach