To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Thursday, October 25, 2007

Dems' Trillion Dollar Tax Raise Bill Has Some Good Things and a lot of Bad

My main criticism of Nancy Pelosi's reign is that she appointed people like Rangel to key chairmanships. At 76 he is close to death's door that he is trying to push a trillion dollar tax increase before he dies.

The one good element of his plan would lower the US corporate tax rate, which is currently the second highest in the industrialized world, behind Japan.

On the bad side, Rangel proposes to increase the child credit for people who do not owe tax, which turns the IRS into a welfare program as it actually pays people money to filers who owe no income tax. To pay for this, Rangel would increase the marginal tax on earners of $150K or more to 40%. To put that in perspective, the average US family pays a 4% federal tax while the top 50% of earners already pay 97% of the burden.

If you live in expensive cities like New York, San Francisco or DC, you pay through the nose to support the rest of the country and still do not feel rich at $150K. That magic earnings number is also the point at which you cannot deduct student loan expenses or health expenses. You are certainly not rich.

If Rangel would propose a higher tax on those who make a million or more, I might be game. But $150K is way too low to start to penalize people who have already lost their ability to deduct major expenses.

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