TAX DAY

TAX DAY, April 15, 2008

Today, as all Americans know is the day our federal income taxes are due. For many of us, April 15, is a dark day and one that if we could, we would want to avoid. With the Presidential campaign in full force, taxes are a topic that everyone in Washington is talking about.
Representative Rahm Emanuel (D-IL) earlier today stated, “President Bush’s tax cuts, primarily the first one, but in addition to that the second one, was focused on the uh the very well off in this country and wasn’t an engine toward economic growth.” Let’s look at that statement. According to Representative Emanuel, the only beneficiaries of the tax cuts were the well off. However, according to the Congressional Budget Office, the top one percent earners in America pay 38.8 percent of total federal income taxes, the top twenty percent of earners, those making approximately $215,000 or more pay 86.3 percent of all income taxes, and the top 40 percent of earners, those earning in excess of $85,000 pay 99.4 percent of all federal income taxes. The bottom 60 percent of American earners, those making less than $58,000 pay only 0.6 percent of federal income taxes and those Americans earning less than $37,000 pay zero federal income taxes.[1]
The two leading Democratic candidates for President, as well as the leadership on Capital Hill, have stated that there is no chance for making the 2001 and 2003 passed tax cuts that every American who pays income taxes benefited from, permanent. As a result of these tax cuts, 44 million American families with children saved an average of $2,493[2] They use phrases such as the Bush tax cuts were for the rich, but what they won’t tell you is that every single person who pays federal income taxes, got a tax cut under President Bush’s tax cuts. In other words, the Democratic leadership has decided that each and everyone of us needs a tax increase and the federal government spends your money better than you do. With the economic slowdown that we are currently experiencing, isn’t a tax increase the last thing we need? Individuals and businesses allocate capital more effectively than the federal government does.[3]

If Congress allows the President’s tax relief to expire, every income tax payer will face a rate increase.
For a single mom with two children and $30,000 in earnings, taxes would go up by 67 percent.
An elderly couple with $40,000 in income would see their taxes go up by 156 percent.
Twenty-seven million small business owners would see taxes increase by nearly 20 percent – or about $4,000 on average. [4]



[1] Congressional Budget Office, Historical Effective Federal Tax Rates 1979 to 2005, December 2005
[2] Department of Commerce, Secretary Carlos Gutierrez,
[3] Department of Commerce, Secretary Carlos Gutierrez speech to the Detroit Economic Club, March 20, 2006
[4] White House Fact Sheet, Taking Decisive Action to Keep Our Economy Growing , April 4, 2008