TAX NEWS - June 2010

Bush Tax Cuts, and Getting to the bottom of tax issues

This is in response to Brian Miller's piece "It's time to get the bottom of tax issues," on the editorial page of the June 13 Press & Guide.

Miller's opinion is based on a gross lack of understanding of the so-called "Bush Tax Cuts." The lack of detail about what he calls the Bush Tax Cuts requires some clarification.

Many taxpayers will discover that they are in the wealthy category that Miller wants to end. It would appear that many Democrats are offended by the fact that some Americans have achieved the American Dream. Those Democrats would be happy if we were like some other countries and did not allow any wealthy people at all.

That said, let us discuss the Bush Tax Cuts.

1) The marriage penalty was eliminated. Under Miller's plan those of you who are married will now pay a penalty for being married; In some cases almost double the taxes of two single filer's.

2) The child tax credit of $1,500 will fall to $1,000 under Miller's plan. Those of you with children need to think about his motives here.

3) The death tax returns. Under Miller's plan the government gets 55 percent of your stuff when you die, compared with 0 percent under current rates. Your kids can get the rest. Keep in mind this is 55 percent on things that really have already been taxed all your life. He wants to give you a double tax.

4) The PEP and PLEASE provisions affecting itemized deductions will go away. IE: the amount you can deduct to help the poor and other charities will not be deductible at the same level.

5) The other rate changes affected all tax brackets. Economists have shown that this bracket reduction causes an increase in revenues to the federal government as it promotes economic activity. By the way, John F Kennedy first tried this theory and it worked.

Overall, I would say that the fiction created by Miller about the tax cuts passed by Congress and signed into law by the president in 2001 is false.

Many of you will get a rude awakening when Miller and his friends wipe out these very valuable to all tax cuts in January. If you don't have kids, don't support marriage, love the death tax, and believe the government needs to smother all economic activity then you need to vote Democrat in the November election. The U.S. can then pass quietly into the night just like European states and others that have tried this and failed.

A recent analysis of IRS data by the Tax Foundation shows that the top 1 percent of taxpayers paid 40.4 percent of the total income taxes collected by the federal government; the highest percentage in modern history, while the bottom 95 percent paid 39.4 percent of the income tax burden. The tax foundation rightly notes that the top 1 percent is comprised of just 1.4 million taxpayers who pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined, while 50 percent of tax return filers pay nothing? But the worst part of the news isn't that the bottom 47 percent pay nothing, but rather that the bottom 40 percent get money back. That's right — they get back money that someone else paid.

How is it that the top brackets pay most of the federal tax bill, yet get demonized as "not paying their fair share" by the likes of Miller, on behalf of the bottom 50 percent who pay nothing.

Miller is obviously a proponent of "fairness," but he seems to have adopted socialist talking points as his primary source of information. What he fails to understand is that stealing from one American to give to another is not "fairness." It is larceny.

Imagine going to a restaurant and sitting at a table with 100 people. 47 of those people will eat a good meal complete with appetizer and dessert, yet pay nothing. The bill will be mostly paid for by one person, the 47 that paid nothing will try to beat him up after dinner. If that one person wasn't there, the 99 others (or more accurately the 52 remaining that still must pay something) couldn't afford the bill.

Miller would take our country.