The Obama Tax Cuts of 2010

I figured I may as well prepare you now for the Democrat campaign of 2010.  I don’t know what they will name it.  All I know is that it will be themed on two things, tax cuts and responsibility.  The responsibility portion will come from Obama and the Pelosi/Reid congress saddling us with across the board tax increases, an enhanced estate (death) tax, cuts in credits and deductions, and additional tax fees for the “super rich”.  They will label it what America is crying for most right now; debt reduction.  Nevermind that they are the ones who gave us this deficit through bailouts of companies too big to fail followed by $1 trillion in wasted stimulus spending.

So where, you ask, do tax cuts enter into this?  It comes from a different way of thinking.  I tend to think of things in black and white plain english.  If you are paying more taxes this year than you were last year, taxes have gone up.  This administration does not think that way.  They think in relative terms.  Taxes don’t go up and down relative to where they are now, they go up and down relative to where they ought to be.  Right now, taxes are already down.  By letting Bush’s tax cuts expire, they aren’t raising taxes, they are just putting them back where they belong.

I’m not joking.  Everything I have just said is straight from Nancy Pelosi herself. She describes the tax increase that will come from doing nothing in 2010 not as a tax hike, but as “eliminating a decrease that was already there”.  Get it?  They aren’t raising taxes, they are just stopping taxes from being not raised.  And with $1 trillion in stimulus spending, $1 trillion healthcare fiasco, and cap and trade, they will need to end all the tax decreases they can.  Why stop with the Bush tax cuts?  Isn’t it about time to let the Reagan tax cuts expire and go back to Jimmy Carter’s 70% marginal rates? Would 70% be zero on their relative number line?  Can we assume anything above 70% would be a tax increase?

It’s really too bad we didn’t know this caveat in their thinking back when Obama promised no tax increases on those making less than $250,000.  Who knew at the time that he didn’t consider ending tax decreases to be the same thing as tax increases.  Has anyone done the research?  If you make more than $171,550 this year, that puts you in the 33% bracket. That is one of the two top brackets that will not be getting a renewal of the Bush tax cuts according to Obama.  But don’t worry.  If you make between $171,550 and $250,000, you aren’t getting a tax hike of 3%.  You will just no longer be having a tax cut of 3%.

So where do the tax cuts come in, you ask again?  Simple, if pre-Bush is normal than leaving tax rates for the lower brackets at Bush’s levels will become Obama’s tax cut.  Still with me?  Yes, that’s right, Bush didn’t just cut taxes for the rich.  When Bush cut taxes, it was across the board.  Bush cut every tax bracket, including the lowest from 15% to 10%.  Then he increased the child tax credit and child care credits for working families.  Then he eliminated the marriage penalty, provided AMT relief, and reduced and planned to phase out the death tax.  Think that sounds good?  Well get ready because Obama is going to renew many of these tax cuts resulting in the Obama Tax Cuts of 2010.  And you better believe Democrats are going to run on it in 2010.

But here is where it gets technical.  Obama may bet on the general ignorance of the American voters and raise taxes across the board while still claiming to be handing out tax cuts.  Here’s how it will work.  When Bush cut the tax rates, he also adjusted the margins.  What does that mean?  Bush adjusted what level of income you have to reach in order to hit the next marginal tax rate.  Look at the following chart:

Clinton Vs Bush Tax Rates and Margins

Clinton Vs Bush Tax Rates and Margins

Under Clinton’s tax rates and margins, if you reached $43,050 you began paying 28% on each additional dollar.  Under Bush’s tax margins you didn’t start paying 28% until you reached $131,450.  As an example, if Obama leaves the Bush tax rates intact except for the top two brackets, but does not renew the actual dollar points where you find yourself in the next marginal tax bracket, it could result in a 5% tax increase for anyone making between $0 and $16,050 or 10% for everyone making between $43,050 and $65,100 and so on.  But it’s still a tax cut as long as it keeps your taxes below Clinton’s rates.

I’m sure those who are still even reading this immensely technical and probably boring blog might be skeptical or thinking that I am just being an alarmist again.  But don’t forget, the administration has already declared that penalties for not buying health insurance, embedded Cap and Trade taxes, sin taxes such as the Soda tax or Cigarette tax, and a variety of other programs that increase government revenue by taking money from the middle class are not actually tax increases.  And as we learned from Stephanopolous’ interview with Obama, trying to say otherwise is nothing more than a sign of desperation.

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6 Responses to “The Obama Tax Cuts of 2010”


  1. 1 D McNevin January 5, 2010 at 12:31 pm

    If you’re going to post the table listing marginal tax rates, then post the ENTIRE table. You give the impressiont that everyone pays more taxes under Clinton than under Bush. Not true. The 15% tax bracket for example is not across the board. It’s based on 15% and then a lower percentage of money made above the mininum in that bracket. I’m sure you already knew that, but your obvious agenda won’t allow for blogging the truth. The truth being that taxes/tax cuts under Bush were lower for the wealthy by a significantly higher margin than they were for the lower and middle class than they were when Clinton was in office. Get your facts straight.

  2. 2 ikefriday January 5, 2010 at 9:49 pm

    I’m looking at the table that I posted and I really don’t understand what your problem is. What’s missing?

  3. 3 This is shitty writing April 18, 2010 at 6:50 pm

    You’re premise is off. Do you realize how ridiculous it would be if those officials had actually stated what you’re claiming they have? From now on, you should post direct quotes, then there won’t be your spin. Not to mention the fact that Obama’s “bailout” has nearly been repaid, and has kept our economy from utter destruction. In one year the DOW has risen 5k. Why not complain about the GOP bailout under GW that has not been repaid, and also had no regulations tied to it. You’re woefully misinformed, or purposely ignoring key facts. It’s sad that pieces of shit like this blog might get attention from people. This is amateur at best.
    Oh, and by your writing and logic you’re probably in a lower tax bracket and have also gotten a tax cut. Dunce.

  4. 4 ikefriday April 19, 2010 at 12:06 pm

    If you want to see the quotes, why don’t you click on the link? By the way, didn’t Obama just say tea partiers should be thanking him for the tax cuts he has been passing?

  5. 5 janieackerly July 26, 2010 at 6:53 pm

    I agree with you, I don’t think our fragile economy could handle a Tax hike. It will do irreparable damage to small businesses and besides I think we are going to be Taxes on everything else in our lives even the Air we breath.

  6. 6 mrgrosky December 26, 2010 at 11:12 am

    I hope you will update this to reflect the Obama-Congress compromise……….

    For a different point of view, please see http://thisweekwithmitchgrosky.wordpress.com/2010/12/22/president-obamas-december-to-remember/


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