Thanks to Herbert Hoover, insanity raise taxes during a recession. Three years in the great depression, Hoover tried to close the burgeoning federal deficit by proceeds from 1932 to income tax on most workers and pushed the top rate from 25% to 63%. If economists on anything that's cutting people of disposable income in the midst of the depression made things much worse, not better. Franklin Roosevelt had committed a sin, a few years later, hiking a slew of taxes to pay for social protection and other things — start fresh recession in 1937, as well as the economy seems poised for a recovery.
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So in today's economy is on the brink of recession, why let the second Bush tax cuts expire on top level at the end of the year shall be determined by the President Obama, effectively increase their taxes? and why Republicans seems willing to go along with the idea of? here are five reasons:
Proposed tax hikes would affect a relatively small number of people:Obama wants to extend the Bush tax cuts for most workers, this means that for those who earn less than $ 200 000 and couples are earning less than $ 250000, nothing will change.Which account for almost 97 percent of all taxpayers. other taxes Obama would expire on a three per cent, i.e. Top tax bracket will increase from 35% to 39.5% and below, will rise from 33% to 36% dividend and estate taxes would increase, but mainly affect rich. therefore, for all the hype about tax increases, this happens only on a small number of Americans.
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Bite at best employees will not be that hurts Some families will feel squeezed when pass tax hikes as those whose income is just over the threshold — especially if they live in expensive coastal cities and kids in college. But taxpayers will fork over a relatively small proportion of their income in additional taxes. Two-earner families with two children and $ 500000 in annual income, for example, would pay about $ 13000 more taxes in accordance with the plan Obama v. (use this tax calculator is to run your own scripts before and after).Additional 2% of their income, apart from financial planning changes that would reduce the tax burden of the family.
This surcharge is not a trivial amount but rich save much higher proportion of their income, the family's standard of living, or translate into deep reductions in overall consumer spending, threatening the economic recovery. Rich obviously spend more per person than anything else, but compared to the huge middle class, there aren't many wealthy buyers. Cost of middle-and lower-income workers is what drives the economy.Leaving a refund yourself, Obama would at least ring fence incomes for those making the most of spending in the country.
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For tax hikes on rich popular support. Most Americans believe it is just fine, if Obama w. Bush tax cuts expire and no longer for the rich.IN THE USA Today/Gallup poll, just 15% of people said tax cuts expire for all and 44 percent said they should expire only for the rich.Only 37% believe tax cuts should apply to all almost since everyone wants to lower taxes, a relatively high proportion of people in favor of some sort of tax hike indicates a growing awareness of the national debt and the need to raise more revenue is probably why Republicans to DIN Democrats wanting to raise taxes, they reluctantly go along with tax cuts for all but the wealthy are siding with public opinion.
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Today in the tax burden is unusually low.As a percentage of GDP, income taxes are at the lowest point in 60 years, according to Donald Marron, Director of the nonpartisan Center for tax policy.Since 1970, income tax revenue as a percentage of GDP ranged from a high of 10% in 2000, the low-6.5% today.Bush tax cuts in essence have ushered in the tax benefits of sorts, and now the recession reduced state tax revenue even more.This will increase tax rates, nothing more than a return to average and it makes sense to start with those who earn the most only.
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America broke.And all in Washington know that taxes are going for most Americans, sooner or later. $ 14 trillion national debt is the cause of the crisis yet, but it would be if the Government continues to exceed revenue reductions are not alone will solve this problem would not be higher taxes on the wealthy yourself, as there are enough of them to dig nation, its hole, which means that there is a big trip to the middle class taxes. it may take the form of consumption tax, known as value added tax which may be partially offset by the reforms that will thin out bewildering thicket of income tax deductions and exclusions and make taxes fairer and easier however happens higher taxes on the rich are the first step. There will be a lot more.
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