The New York Times reliably provided more positive spin for Obama's proposed tax hikes on "the rich" on the front of Friday's Business Day. Economics reporters Catherine Rampell and Binyamin Appelbaum, "Obama's Tax Plan Still Spares Large Portion of Nation's Affluent."
President Obama’s insistence that marginal tax rates rise for families making more than $250,000 has convinced millions of affluent Americans that they are likely to be writing larger checks to the government next year.
But many of those families have no reason to fret.
A close look at the president’s plan shows that a large majority of families making up to $300,000 -- as well as hundreds of thousands of families with even larger incomes -- would not pay taxes at a higher marginal rate.
Because the complexity of the tax code makes it difficult to draw clean lines, they are the beneficiaries of choices the administration has made to ensure that families earning less than $250,000 do not pay higher rates.
They softly admitted:
Some of those affluent households would pay higher taxes next year under other parts of the president’s tax plan and increases imposed by the Affordable Care Act, but not under the centerpiece, the part most frequently promoted by the president and most bitterly opposed by Congressional Republicans.
John Boudreau, the president of a Connecticut construction firm who expects to make about $300,000 this year, said that was a welcome surprise. He voted for Mr. Obama and said he was ready to pay taxes at a higher rate. But he would rather not.
“I’m willing to, but if it works that I’m not, so be it,” he said. “I will not be a person that’s going to stick an extra check in my tax bill as my donation to my country.”
The number that now divides the parties was introduced by Mr. Obama in 2007, in the early days of the presidential campaign, when he promised to extend the Bush tax cuts for families that made less than that amount. “I can make a firm pledge,” Mr. Obama said in September 2008. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
When policy makers talk about income, however, they do not mean the amount of money a family earns; they mean the portion subject to taxes. For those who itemize their tax deductions, the government does not tax interest payments on mortgages or charitable donations, among other things, up to certain limits. As a result, two families with the same incomes will most likely have different taxable incomes.
A point missing from the tax discussion: how little such hikes would actually impact the national debt, even if they didn't suppress economic growth, a fear of conservatives.