Democrats Declare Tax War on the Middle Class

The Democratic Party has declared a tax war on the American middle class. Whether Clinton or Obama become their nominee, if the Democrats win, the Middle Class loses. The reason is both candidates have promised to repeal the Bush tax cuts. In the Democratic twisted view of reality, all tax cuts are evil because they only benefit the wealthy, the so-called "fat cats" or "filthy rich."

So, who are these "fat cats" or "filthy rich" who have benefitted from President George W. Bush's tax cuts? Are they only the millionaires and billionaires? Far from it. Instead, they are the vast majority of middle class Americans. Here's the proof from the Tax Foundation.

Note: These figures do not take into account the Alternative Minimum Tax (AMT) that these taxpayers may have had to pay. They presume the taxpayers have no dependents and are taking the standard deduction.

Back in 1999, when Bill Clinton was still President, if you were single and making $30,000 per year, you paid $3,158 in federal taxes. Today, under President George W. Bush, you paid $2,756 or 13% less than under Clinton. If you were married and filing jointly with an income of $60,000 per year, under Clinton, you owed $6,585 in federal income taxes. In 2008, under Bush, you owed only $5,513 or 16% less.

If you are a little better off and make $50,000 as a single person, you paid $7,263 in federal income taxes under Clinton, but only $6,606 or 9% less under Bush. A married couple filing with a joint income of $75,000 paid $9,427 under Clinton, but only $7,763 or 18% less under Bush.

For the upper middle class, singles making $75,000 per year paid $14,263 in taxes under Clinton. Under Bush, they pay $12,856 or 10% less. For married couples with a joint income of $125,000, they paid $23,427 under Clinton and $19,463 or 17% less under Bush.

Another way to look at it is when Tax Freedom Day falls. Tax Freedom Day is the day when the average American taxpayer stops working just to pay taxes (local, state, and federal) and starts earning income for personal use. In 2000, Tax Freedom Day was May 3rd, the latest in history. In 2008, we celebrated Tax Freedom Day on April 23rd. Despite the Bush tax cuts, the average American worker pays more in taxes than on food, clothing, and housing combined.

The danger to all American taxpayers, if the Democrats win the White House or continue to control Congress, is the Bush tax cuts will not be made permanent. Many taxpayers do not realize that the Bush tax cuts are scheduled to "sunset" in 2011. According to the Tax Foundation's "The Effect of Temporary Tax Relief on a Typical American Family of Four" report,

"If Congress and the President do not act to make permanent the Bush tax cut, known formally as the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), a family of four earning the median income can expect its federal income tax bill to increase by $2,681 between 2010 and 2011, a 48.8 percent increase. This will amount to 3.3 percent of the family’s adjusted gross income in that year and roughly equals what the average family of four spends on out-of-pocket health care costs each year."

What will happen if Bush's tax cuts are not made permanent, a move most Democrats oppose? The 10% tax bracket for the lowest income workers will increase to 15%. The child tax credit which will be $1,000 in 2010 will be reduced to $500. And, married couples will once again pay a marriage penalty. Because married couples pay the majority of all federal income taxes, they were the biggest beneficiaries of the Bush tax cuts and stand to loose the most if they are sunsetted (eliminated). These are only some of the painful results that are scheduled to occur on January 1, 2011.

The greatest irony is that if the Democrats get their way and do not make the Bush tax cuts permanent, then the top 20% earners will pay a smaller percentage of the total tax liability than they do now with the Bush tax cuts. In other words, the "fat cats" or "filthy rich" will pay 78.7% or 3% less of all federal income taxes under the Democrats' plan than the 81% they currently pay under the Bush plan. Is this why the wealthiest Americans contribute more to Democratic than Republican candidates?

Source: The Tax Foundation http://www.taxfoundation.org/blog/show/22958.html

Other recommended Tax Foundation reports are:
U.S. Federal Individual Income Tax Rates History, 1913-2008 http://www.taxfoundation.org/publications/show/151.html
The Effect of Temporary Tax Relief on a Typical American Family of Four http://www.taxfoundation.org/research/show/134.html
The Effect on a Typical Family of Four of Accelerating Scheduled Tax Cuts and Making Temporary Tax Relief Permanent http://www.taxfoundation.org/news/show/130.html
Impact of Bush Tax Cuts on AMT and Non-AMT Returns for 2007 Under Current Law http://www.taxfoundation.org/research/show/22424.html
Married Couples Pay Majority of Federal Income Taxes, Received Majority of Bush Tax Cuts http://www.taxfoundation.org/research/show/66.html
The Tax Code's Day of Reckoning: January 1, 2011 http://www.taxfoundation.org/blog/show/1476.html
Comparing the Kennedy, Reagan and Bush Tax Cuts http://www.taxfoundation.org/research/show/323.html
Comparing Popular Tax Deductions to the Bush Tax Cuts http://www.taxfoundation.org/research/show/22447.html