As the Tax Cut Tussle was breaking out yesterday, I saw an email from the Sharron Angle campaign attacking Harry Reid’s position and excoriating his alleged “opposition to extending tax cuts for every American.”
But that actually isn’t true. The Dem position does give a tax break to every American. And I hope some Democrats will start pointing this out.If you understand how marginal tax rates work, it’s really pretty straightforward. The Democrats are saying they want to extend the 2001 tax cuts for all income up to $250,000 per year. That does apply to everyone. Let’s be clear: that does apply to everyone. Bill Gates gets a tax cut with that; so does Jay-Z. Everybody in the country gets a cut in their tax rates for all the money they make up to $250,000 of taxable income. (Of course, none of this applies to people who don’t make enough to even pay income taxes and only pay payroll taxes. But none of the public debate seems to take account of these people. So we’ll get to that in a separate post.)
Again, it applies to everyone. So the language of ‘tax cuts for the middle class’ and ‘tax cuts for the rich’ is actually sort of misleading. What the Republicans want is even more tax cuts for people who make amounts of money that 99% of the population doesn’t even make.
Obviously, at a certain point you get into spin and framing. But the reality is that Dems shouldn’t be conceding that some people get tax cuts and others don’t. Because the simple tax computation reality is that everyone who pays income taxes gets a tax break under the Democratic proposal.