Jan
20

Living Above our Means-Tax Cuts in America

A crisis in America that citizens are growing more passionate about is the Bush-era tax cuts that are set to expire this year. Obama wants to extend 80 percent of the tax cuts set in place by the previous Bush administration but with one major difference: raising the taxes on wealthier Americans. The Bush plan lowered the tax rates to 3 percent and created a lower 10 percent bracket. It also made it easier for the rich to stay rich by lowering tax rates on estates, even though personal exemptions and limited itemized deductions.

Obama plans to raise the estate taxes on the rich to 55 percent and increasing taxes on all families who earn over the $250,000 income bracket. His stance is there should be a better distribution of wealth among Americans. Those families under that income bracket won’t see a rise in taxes and less will be taken out of their checks also. One middle class woman interviewed was delighted to see the increase in her check simply because less money was taken out.

Fox Business news reported one negative some people are stating is a tax raise will hurt consumer spending and business owners will lose faith in the government. It is the company owners who feel the major squeeze as they have to release more cash they’ve been hoarding since the recession. On the plus side, only 3 percent of small business owners would see an increase. Then again, small businesses collectively earn about $400 billion.

Wall Street Journal says advisors to Democrats are unsure whether now is the right time to renew the tax cuts since the economy comeback seems to be slowing. Many believe it would hurt U.S citizens more than heal them. As decision time gets closer, the debate continues to rage across the nation.

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