Barack Obama's Tax Plan

Consider Barack Obama’s plan to provide a tax cut to yield one thousand dollars of additional income for each middle class and poor family. There are approximately seventy million such families in the United States. That means the increased tax on the wealthiest families (approximately two percent of the people) to support the middle class income increase would be seventy billion dollars. That equates to a tax increase of over fifty thousand dollars for each wealthy family. A wealthy family includes families making more than two hundred thousand dollars a year. This does not include additional tax increases needed on the wealthy to support his social programs such as universal health care. Additional tax money would also be needed to balance the budget. Even if Obama decides to end the war in Iraq, the money saved in the budget from this action would not be enough to support his social programs. Each family that receives a one thousand dollar income increase will spend the money on everyday items such as gas, energy, food and so forth. Meanwhile the thousands of dollars taken out of the pockets from the wealthy would have gone for cars, homes, computers and other luxury purchases needed to keep the economy growing. Does anyone think an additional one thousand dollars in middle class families’ pockets will end the current housing crisis? Actually, there is a higher probability that it will make the crisis worse if it deters the wealthy from purchasing homes.

Obama claims that everyone making less than 250,000 dollars will not see a tax hike. I am retired and like many retirees we live off stocks and mutual funds. When Obama changes the tax on long term capital gains, my taxes as well as other retired folks will have their taxes go up. His reasoning is that only rich people have stocks and mutual funds. My tax bracket this next year may be borderline poverty, but I will have less income under an Obama administration. Obviously Obama has not thought this through and is mistaken when he says EVERYONE who makes under 250,000 dollars will have lower taxes and more income.