The 2008 election was one of the most
important events in presidential history. America made its decision for who was
going to be our leader to guide and pull the nation out of what is to believe the
worst recession since the great depression. That chosen leader was Barack Obama.
One of Obama’s plans to help the economy was his tax policy, specifically what
he was going to do with income, payroll, investment income, and estate taxes.
As of yesterday, being re-elected for president for four more years, has Obama’s
tax policy help rehabilitate the economy or deteriorated it even more?
In
2008, Obama’s proposal for income taxes was to restore the top two income tax
rates from 33 % and 35 % to 36 % and 39.6 %. This proposal would also reinstate
limitations towards how much one receives on given deductions or personal
exemption higher-incomers can take. The tax cut that was imposed before Obama’s
proposal was called the Economic Growth and Tax Relief Reconciliation Act.
According to the previous post, this act indeed contributed a great amount
towards the United States deficit. For his proposal on investment income taxes,
he wishes to continue treating gains and dividends equally by keeping the
current rate for everyone except for high-income households
What Obama basically wants to do is renew the
Bush tax cuts by keeping the tax rates for lower and middle income individuals/families
while at the same time letting the rest of it expire, which will increase tax
rates towards those who obtain high income. Based on the “Analysis: A look at
tax deal's pros and cons” by Richard H. Dunham, not only was this tax cut
unfair to the majority of Americans, but it does not and cannot help with the
creation of more jobs in the United States and that this plan will only benefit
to our country’s deficit by about one
trillion dollars during a short amount of time.
In
addition to his policies, for payroll taxes, Obama wishes to tax amounts over
the salary of $250,000. This falls into play with what the borderline between
middle and high incomers with anything being above $250K high income. He wishes
to make the Social Security Program more progressive by better funding it. What
Obama also wants to do is to freeze estate tax exemption amount at $3.5 million
from its $2 million level and the $1 million level it's set to revert to in
2011. He will continue to keep the current rate of 45% which would change to
55% in 2011.
According
to Timothy Hoah”s “You Don’t Raise Taxes in a Recession”, as of September 2009,
our economy has slowly but surely growing from the recession. Seeing as though Obama
is president during the time, it may seem he did help our economy. Some may say
that this may not be the case. Until Obama’s new Medicare tax hikes on high
incomers will come into effect January 2013, we can then see if this will eradicate
our deficit.
America
made its decision in 2008 and elected Barack Obama. Obama’s tax plan is said to
help our nation’s deficit into reducing it and it is contested whether he did
or not. Majority of the U.S population voted for the re-election of Obama and
this action speaks louder then it’s words. If it didn’t, then there’s four more
years to decide whether or not Obama’s tax policy is a gift or a curse to our
country.
Sources:
The New Republic "You Don't Raise Taxes In a Recession" By: Timothy Hoah
CNN: What Obama Means By Tax The Wealthy
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