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  • Chart of the Week: Avoiding Taxmageddon Is Not a Tax Cut

    On January 1, 2013 nearly $500 billion in tax hikes will go into effect.

    In other words, “Taxmageddon.

    Separating truth from fiction in politics, however, is not as clear, as The Heritage Foundation’s Curtis Dubay and Romina Boccia point out in last week’s analysis of the vice presidential debate:

    About 120,000 high-income families would get an additional $500 billion tax cut over 10 years.

    Biden: “120,000 families by continuing that tax cut will get an additional $500 billion in tax relief in the next 10 years.”

    False. This is not a tax cut. It is the absence of a tax hike. Not raising taxes on high earners, who actually happen to be job creators, is not the same as cutting their taxes. President Obama and Vice President Biden have a troubling habit of arguing their case in this way. It is troubling because to take that stand is to presuppose that the money we all earn is actually the government’s in the first place. Hopefully they don’t really believe that to be the case.

    Only when the government presupposes–as Dubay and Boccia write–that the money earned by those 120,000 families rightfully belongs to the government and not the families themselves does avoiding a tax hike become a tax cut.

    From Dubay’s July 2012 issue brief on Taxmageddon:

    Taxmageddon is causing widespread uncertainty that is slowing the economy right now,[6] and, if it hits on January 1, 2013, the blow it would deliver to the already staggering economy would be severe.

    Congress should not delay stopping Taxmageddon by engaging in unnecessary attempts to pay for phantom revenue losses. Congress should evaluate stopping Taxmageddon against a current policy baseline, which would clearly show that stopping Taxmageddon is not a tax cut and does not raise the deficit and that therefore Congress does not need to pay for stopping it. The sooner it realizes this and votes to stop Taxmageddon, the better.

    Here’s a look at Taxmageddon’s tax hikes, and how Taxmageddon would affect you:

    Heritage Foundation calculations based on data from the Congressional Budget Office and Office of Management and Budget.

    Posted in Featured, Scribe [slideshow_deploy]

    4 Responses to Chart of the Week: Avoiding Taxmageddon Is Not a Tax Cut

    1. EBecker says:

      It is very unsettling to realize that out leaders in Washington actually think that our income,our working profits belongs to them to spend as they arbitrarily decide how to "share" . What happened to protect and support for out individual freedoms and choices.

    2. Larry Walters says:

      The FairTax HR-25m S 13 plan is simple.
      Abolish the income tax completely and the IRS. Repeal the 16th Amendment so income cannot be taxed. Replace the income tax revenue with an equal amount using a national sales tax. It is the same tax dollars, a different point of collection.
      It is what the above actions affect that can become a little complex.

      Because the FairTax removes the tax and compliance costs from business, they have certainty in their future enabling them to grow as consumer demand calls for more products or services. The reduced costs make our exports competitive with the foreign competition increasing demand for the “Made in America” label. This will cause more job growth here. Elimination of the tax on business will mean we become the business haven of the world bringing back a good portion of the $11-$13 trillion hidden from the income tax as well as money from foreign investors.

      The costs of everything we produce will be lower before the FairTax is added and every wage earner will take home a paycheck without any federal deductions. The average person in the 15% bracket sees a 29% increase in take home dollars.
      part 2 follows

    3. Larry Walters says:

      Part 2
      The FairTax is established to be administered equally to all. No favors, loop holes or exemptions. It is transparent and every purchase has the tax paid on the receipt. No one files a federal tax return. The business taxes that are now passed through the supply chain and paid by the consumer go away. There are no taxes on anything in the supply chain. Only items sold to the end user are taxed. The only exceptions are used goods and education. Nothing is taxed more than once. Appliances, cars, clothes, homes, boats, etc are not taxed if they were used.

      The tax rate is 23 cents of each dollar but the effective tax rate for most people above the poverty threshold will be about 11%. No tax is be paid on basic essentials. To keep loop holes out, tax is paid at the register but all qualified people can receive the prebate compensating them in advance each month for the tax paid on essentials.
      Part 3 follows

    4. James Tudor says:

      As you can see from your article, politicans explain policy in a way that hides the inconvienent truths, or more clearly lies can be a form of truth. The upshot is we the people have to rely on ourselves to discern the truth, then tell the poliicians what we want. For instance, I know that I have no control over how politicians spend. But I do have control over how the bill is paid. I vote to change the tax system so that neither I nor my childrens children, are liable for the interest payments through our labor. I would much rather be liable through my spending. That I have control over. I vote fairtax.org as a replacement for the inefficent idea that someone else should pay my share of social costs. This makes much more sense.

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