Opinion : Tax Cuts Debate

Dear Editor,

We are being told that the Bush Tax Cuts should be allowed to "drop dead", with the disclaimer that the Middle Class would be exempt. Only the wealthy (over $250 K) will be required to pay the bill for our Nation's huge and growing deficit. Is this just rhetoric to get the support of the American People, or is it a truism that the "rich" must pay their "fair share". I attended a symposium in Des Moines recently sponsored by my retirement fund manager His first questions was: how many believe taxes will increase after this year? Virtually everyone's hand went up. We are in a severe economic downturn, with unemployment at all time highs, retirement fund returns anemic (if any returns at all), and virtually everyone expects taxes to increase. Is this wise even with the event of extreme deficits and extraordinary government spending?

If we believe that the wealthy must pay more, is it possible to gain enough revenue to pay the debt bill without slowing GDP growth? An important question to ask is where do jobs come from? I can verify that I have never been hired by a poor person.

The Moderator placed a chart on the viewer ...1% of taxpayers earn in excess of $389,000 per year and pay 39.9% of the bill. Adding the next 5% who earn in excess of $153,000 per year equals 60% of the tax bill. The top 50% of taxpayers earning in excess of $31.900 per year pay 97% of the tax bill. So 50% of taxpayers pay 97% of the bill. I don't believe there is enough money to be had, even from the very wealthy to make much difference in our debt. To put this big bill in perspective the Moderator claimed the deficit bill (all of our debt) equals $500,000 per Family - PER FAMILY. One other point: President Obama proposes to raise income tax levels for those over $250,000 to Bill Clinton levels [increasing from 35% to 39.6%]. But, those retired and those very rich receive much of their income through dividends, which the President claims to keep at Bush levels of 20%. So, the question, how much revenue will be gained? Is this just another demonization of the "rich", which deflects the true issue/s? If the pundits are right and Dem's lose seats this fall - will the lame duck Congress pass a VAT (value added tax) -- they would have nothing to lose. Had enough yet?

Regards,

John Stiegelmeyer

8/10/10

Correction:

In a previous letter "tax debates" I misstated the capital gain and dividend rates. Under President Clinton they were increased to 20% under President Bush they were decreased to 15%. Without Congressional action all tax rates will increase to the President Clinton rates on January 1, 2011. Sorry for the error. Regards, John Stiegelmeyer