Bush-era tax cuts soon to expire

Tax cuts put into place under former President George W. Bush will expire at the end of this year, and lawmakers must come to an agreement on extending these tax cuts. Failure to extend these tax cuts will result in families at every income level to see an increase in taxes withheld from their paychecks. A typical American family of four with a combined income of $50,000 a year would see a $2,900 increase in taxes in 2011, the same family of four earning $100,000 a year would see an increase of approximately $4,500. Wealthier families would see an even larger tax hike in 2011.

Many argue the tax cuts enacted in 2001 and 2003 actually benefited the wealthy more so than the working poor and middle classes. President Barack Obama wants to extend these cuts, however he only wishes to extend them to individuals earning less than $200,000 a year and joint filers earning less than $250,000 a year in adjusted gross income. According to a recent poll conducted by Associated Press, 39% of Americans surveyed backed the idea of raising taxes on the highest earners and keeping the tax cuts for the poor/middle class, 15% supported raising taxes on everyone by allowing the cuts to expire, and 44% believe we should keep the existing tax cuts in place for everyone, including the highest earners. Under Obama's new plan, the wealthy would actually see a larger increase in taxes than they would if the cuts simply expired.

I believe we should keep the current cuts for the poor and middle classes and either go with Obama's plan to increase the highest earner's taxes, or at least tax them with the rates used before the cuts were put into place. While some may argue that the rich shouldn't be taxed any higher than the poor since it's their money and they earned it, I think that by taxing the super rich higher and the poor/middle classes lower not only would the wealthy not suffer nearly as much of a blow to their pockets, but it would help the less fortunate and the economy significantly. The way I look at it is this; if I took 50% of someone's yearly salary away who only earned $20,000 a year, they would suffer a tremendous blow to both their pocket, and their quality of life/standard of living. However, taking half of someone's salary who earns $8 million a year, while still being a major blow to their earnings, it probably wouldn't effect their quality of life or standard of living in the same degree (if any at all) as it would someone in the poor class. Yes I know it's a bit of an extreme example, but I believe it to be necessary to get the point across.

SOURCE: Expiring Tax Cuts Hit Taxpayers at Every Level