Bad Time to be Rich? Only for Tax Haters

Democrats Plan New Taxes for the Wealthy to Fund Health Care

(AP)  It's probably never a bad time to be rich. But the good times for America's wealthy could soon be a little less so.

President Obama wants to boost income taxes for the wealthy to pay for tax cuts for everybody else. He wants to limit the deductions that high-income families take for mortgage interest and charity contributions to help pay for providing more people with health insurance.

House Democrats are planning to hit the wealthy with even higher income taxes to pay for their version of a health care overhaul.

Between the two plans, a family of four with an income of $5 million a year would see its annual income taxes skyrocket by more than $440,000. A similar family making $800,000 a year would get a tax increase of $30,000, according to an analysis by the financial services firm Deloitte Tax.

"I still think being wealthy is better than being poor," Clint Stretch, who heads tax policy at Deloitte Tax, said with a touch of understatement. "But this is a pretty high proposed tax burden."

Taxing the rich to pay for health insurance would represent a significant departure from the way Americans have financed safety net programs in the past.

Both Social Security and Medicare are supported by broad based payroll taxes. Although the rich pay more - they have bigger incomes - the burden is shared by the middle class and even the working poor.

By contrast, the health care plan working its way through the House would impose $544 billion in new taxes over the next decade on just 1.2 percent of households - joint filers making more than $350,000 a year.

The bill would impose a new 5.4 percent income surtax on couples making more than $1 million a year, starting in 2011. Couples making more than $350,000 would have to pay a surtax of 1 percent tax and those making more than $500,000 would pay a 1.5 percent surtax.

If certain savings in the health care system are not achieved by 2013, the surtax would rise to 2 percent for families making more than $350,000 and to 3 percent for those making more than $500,000.

For a family of four making $450,000 a year, the initial tax increase would be $1,000, according to the Deloitte analysis. But for the super rich, like a single filer making $5 million a year, the tax increase would be $452,000. The analysis assumes a typical mix of earned income, capital gains and itemized deductions for each income level.

Democrats said that for most of the affected taxpayers, the surtax would be far smaller.

"What we're talking about is frankly very, very small amounts for the overwhelming majority of people who will pay it," said Rep. Artur Davis, D-Ala.

The top marginal income tax rate now is 35 percent, on income above $372,950. Mr. Obama wants to boost the top rate to 39.6 percent in 2011 by allowing some of the tax cuts enacted under former President George W. Bush to expire.

The House Democrats' proposed health care surtax would increase the top rate to 45 percent, making it the highest top rate since 1986, when it was 50 percent.

Republicans complain that some taxpayers would face marginal tax rates above 50 percent, when federal and state taxes are combined. They also say that tax increases on the wealthy hurt small business owners who typically pay their business taxes on their individual returns.

Democrats say the tax increases would affect only 4.1 percent of tax filers who report small business income. Those small businesses, however, tend to be the ones that employ the most workers, according to data from the National Federation of Independent Business.

"We shouldn't have to resurrect the 1970s to remember that when tax rates go too high, people lose the incentive to build new businesses and create jobs," said Rep. Wally Herger, R-Calif. "These massive tax increases are no substitute for real fiscal responsibility."

Mr. Obama has tried to make the rich a popular target for tax increases as Democrats struggle to find ways to pay for his plan, intended to assure that virtually everyone gets health care. He regularly portrays the wealthy as big winners under Bush, noting that their taxes dropped and incomes soared during Bush's eight years in office.

"I think the best way to fund (health care) is for people like myself who have been very lucky, to pay a little bit more," Mr. Obama said recently.

The argument, however, omits the fact that Bush also cut taxes for middle- and low-income people. Their incomes didn't jump as much as they did for the wealthy, but effective federal tax rates for middle-income and low-wage workers are at or near 30-year lows.

This year, 47 percent of filers won't owe any federal income taxes - including some families making as much as $50,000 a year, according to separate projections by the Tax Policy Center and Deloitte Tax.

"Right now, if you are middle class or below, you are not expected to help pay to solve these problems," said Stretch, the tax policy adviser.

[tafhdyd]

For those like "speakinup22" that believe every email they get is truth. Try checking your information. Better to let people think you are stupid than open your mouth and remove all doubt.
The answer to your question #1 is neither gets credit. The Demos passed amendments in the house, both parties voted "Yea" and the bill was signed by Ronald Reagan.
Question #2 actually deals with supplemental security income, SSI not Social Security. SSI gives payment to people that have nothing and have not paid into anything and was put into law by Richard Nixon in '72, not by Carter.
Question #3 was partially right. Some changes were made to SS but they were lumped in with the much larger Omnibus Budget Reconciliation Act.
Try again and check your right wing emails first.

[cameraphone]

I wish you all would hurry up and finish arguing over Health Care. I'm dying here .....

[mary-miami]

Absolutely increase taxes on the wealthy. Stop the privileges that only the rich have had for eight long years. The "working poor" are the real boosters in the economy. They are the ones who go out and spend on necessities, right in their communities. The rich take vacations abroad and spend dollars in other countries. Republicans are hypocrites when they say that they respect life; because if they did respect it, then they would agree that it is immoral to let someone die just because they don't have money to pay a doctor for preventive care. We need universal healthcare. Everyone has a right to live, right? Then, let us begin with the people who are already living...and seeking work...the unemployed are not to blame for not having any work...While we're at it, let's increase the minimum wage to ten dollars an hour, this will allow workers to pay their bills and "float" in this Depression.

[sy2502]

What privileges of the rich are you talking about here? The privilege to enjoy the fruit of their work? Are you forgetting that the rich are giving everybody else a job? That if you tax the rich to death they will downsize their businesses, and the average you and me will lose their jobs? Are you forgetting that the rich already pay most of the tax dollars that go into government pockets? That the rich put way more money into the economy than me and you?
I happen to respect money that people earn with their work. I don't feel I should go and take it from them just because I make less than them. I am not a thief.

[sy2502]

So my employer hired me with the idea that my work is worth a certain amount of money, but when I walk away with my paycheck, the government stops me, takes a look at that paycheck and says: wow dude, that's way too much! That's unfair! Give me half of it. And how is that different from being robbed by any street thug?

[xlib]

Funny article considering the number of people in the thug administration that didn't pay taxes. I just find that interesting. I understand the IRS now can carry out covert investigations and are released from any of that "privacy" stuff you libs wailed about. Wonder if geithner thought that one up. Also wonder if charlie rangle will have to pay those back taxes on his Dominican vacation home.
Probably not.

[drputt45]

Wish I could pay about $5M a year in taxes. I would be making the income that requires it. As it is, no one is getting rich on my tax table.

[onesword]

What goes around, comes around. In one pocket, out the other. Especially, when it not affecting your way of living.

[iam4honesty]

A working family that earns $6500 per month pays about $430 per month in social security tax. A person who makes $10 MILLION per year pays about $430 per month in social security tax.

Let's see... who has the unfair tax burden?

If the cap were removed, the person making $10 MILLION per year would pay their FAIR SHARE, about $56,000 per month.

In other words, the common working folks are giving the 'trust-funders' (Paris Hilton?) a gift of about $50,000 per month... or about $600,000 per year.

[speakinup22]

HA HA HA HA HA HA HA HA HA HA HA HA

See folks, this is how a liberal thinks !

Hey iam4honesty, did you know that FDR promised participation in the Social Security would be totally voluntary ?

Did you know that he said the money would be put into an Independent 'Trust Fund' rather than into the General operating fund, and therefore, would Only be used to fund the Social Security Retirement Program, and no other Government program.

Then If I recall correctly, 1958 is the first year that a Democratically Controlled Congress, not President Eisenhower, voted to remove funds from Social Security and put it into the General Fund for Congress to spend.

From what I understand, Congress logic at that time was that there was so much money in the Social Security Fund that it would never run out or be used up for the purpose it was intended/set aside for.


Question: Which Political Party took Social Security from the Independent 'Trust Fund' and put it into the General Fund so that Congress could spend it?

Answer: It was Lyndon B. Johnson (Democrat, Term of Office: November 22,1963 to January 20, 1969) and the democratically Controlled House and Senate.




Question: Which Political Party decided to start giving Annuity payments to immigrants?

ANSWER: Jimmy Carter Jr. (Democrat, Term of office: January 20, 1977 TO JANUARY 20, 1981 and the democrat party. The Democratic party gave these payments to them at age 65, even though they never put a dime in.


Question: Which Political Party started taxing Social Security annuities?

Answer: The Democratic Party, with Albert Arnold Gore, Jr. (Al Gore) [Vice President Term of Office: January 10, 1993 to January 20, 2001] casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the US ...




And NOW, you have the AUDACITY to say "the common working folks are giving the 'trust-funders' (Paris Hilton?) a gift of about $50,000 per month... or about $600,000 per year."



HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA

SHAME, iam4honesty, SHAME on YOU !

YOUR Statement PROVES Liberals think of Social Security as another means to Tax the rich to pay for the lazy.

Pssst - if you think this is a Fox News Talking point - I DON'T CARE !

TELL ME WHY IT IS INCORRECT IF YOU CAN, SOCIALIST !

[ToolMangler1]

by speakinup22 July 20, 2009 11:16 AM EDT


Yoou are right on some things, Just one question.... Have the GOP ever done anything against this country, (other than kill JFK)??????

[wtcmedic911]

What IDIOT would love taxes? This is one big reason we had the war of independence from what I recall. Taxation without representation. We have the representation but from politicians that feather their own pockets.

[anti-global2]

in other words re-distribute wealth. Take from one who is productive and give it to one who is not.
This is wrong, nothing should be based on need only merit.

[gold_standard]

Don't worry, the rich are not going to pay any taxes. The rich finance political campaigns, so they will always be given a way to avoid taxes as a reward. Talking about taxing the rich is propaganda for the stupid classes that really pay the taxes.