The December Surprise
By Peter Ferrara
The American Spectator.org
“I can make a firm pledge. 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.”
That was the central pledge on which Barack Obama was elected President. He pledged to extend the Bush tax cuts for everyone making less than $250,000 per year, but to let them expire and raise tax rates for “the rich,” which he defined as those making more than $250,000 per year.
President Obama and the Democrats have had two years to make good on this pledge. And now they have failed. Last week, House and Senate Democrats decided not to hold a vote on extending the Bush tax cuts before the election in November. As a result, a tax increase of $4 trillion is now scheduled to go into effect on January 1, the largest tax increase in world history. And most of that is on the middle class and lower income workers.
The bottom tax rate of 10% would increase by 50% to 15%. The other tax brackets would rise by similar amounts as well. The child tax credit would shrink by one-half. The marriage penalty, taxing a couple more than if they had remained single, would go back into effect. For a family of four earning $50,000 in income, the income tax burden would rise by nearly $3,000 in 2011 alone, according to a study by the tax accounting firm Deloitte Tax LLP. For a small business owner earning $100,000 a year, the income tax burden would rise by $4,500 per year.