Need we a reminder on how tax policy works?
Okay. Here we go.
Suppose Obama gets his wish, and keeps the tax cut for those making under $250,000. And let's say that he raises the taxes on those making $250,000 and from 33% to 36%.
Let's say that your income is $250,001. How much more would you be paying in taxes than if the Obama pplan never went through? Remember, your tax rate has jumped from 33% to %36.
The answer? You will be paying about three cents more. That's right. Three cents.
Why? Because the 36% rate doesn't kick in until your $250,000 dollar of income. That's what people don't realize. They seem to think that the higher tax rate for upper-income means they will pay more taxes on ALL their income. But that's wrong. They are paying higher tax rates on only their higher income.
For most earners making between $250,000 and $500,000 a year, the Obama plan would increase income tax liability by just a few hundred dollars — an average of $600, according to the Center for Economic and Policy Research’s Dean Baker.
Is this what the GOP is fighting for? So that people unaffected by the recession can save $600 per year, while the country slips deeped into a deficit?