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Practically Speaking

Kyle and her husband moved to Brookfield in 1986. She became active in local politics and started blogging in 2004. Her focus is primarily on local issues but often includes state and national topics, too. Kyle looks at things from the taxpayers' perspective in a creative, yet down to earth way, addressing them from a practical point of view.

Tax the richRestriction on donations has even Dems balking

Charity, Legislation, President Obama, TAXES, THE ECONOMY, Unintended consequences

From moveon.orgThis is ridiculous. The media has been obsessing about President Obama's plan to roll back the Bush tax cuts for the wealthiest Americans—from 35% to 39.6%—even asking if that makes him a socialist.1

But do you know what tax rate the wealthiest Americans paid on the top portion of their earnings at the end of Ronald Reagan's first term? 50%. 

Under Richard Nixon? 70%. Under Dwight Eisenhower? 91%!

..ME, what was the upper tax level back then. If the same as now, $250,000, that was a huge amount of money back then, think Uncle Wallie with his impressive $250000. Adjusted for inflation, those upper levels would be ????.

Sources:

1. "A socialist? Obama calls back to insist no," The International Herald Tribune, March 8, 2009
http://www.iht.com/articles/2009/03/08/america/barack.php

2. "Tax Cuts," The New York Times, February 26, 2009
http://www.nytimes.com/2009/02/27/washington/27web-tax.html

3. "Soaking the Rich (Redux)," The Washington Monthly, March 8, 2009
http://www.moveon.org/r?r=51234&id=15734-10147491-F2L36Qx&t=2

 

ME: and Kennedy lowered taxes in response to Eisenhower? Eisenhower was paying off a huge amount of debt from ww2 Reagan I think lowered taxes as a result too. check that


 http://apnews.myway.com/article/20090304/D96NGOTO0.html

 Obama tax hike meets Democratic resistance

WASHINGTON (AP) - President Barack Obama's proposal to limit itemized tax deductions for high earners is running into opposition from key Democrats in Congress who worry that charities and the housing market would be hurt.

Senate Finance Committee Chairman Max Baucus questioned Wednesday whether the proposal was viable, a day after his House counterpart also expressed reservations.

Treasury Secretary Timothy Geithner said tax increases on families making more than $250,000 a year are necessary to make a down payment on health care reform and to limit future budget deficits. But, he said, he was willing to work with lawmakers on proposals they objected to.

"We recognize there are other ways to do this," Geithner told the Finance Committee.

Baucus, a Montana Democrat, said he thought the administration would be flexible on the proposal. "They want health care reform as much as I do," he told reporters.

Geithner and White House budget director Peter Orszag returned to Capitol Hill on Wednesday for a second day of hearings on Obama's $3.6 trillion tax and spending proposal. Both faced tough questions about the tax package.

Obama's budget calls for setting aside $634 billion over the next 10 years as a down payment on health care reform. Half the money would come from tax increases on upper-income earners; the other half from cuts to Medicare and Medicaid.

Obama's budget calls for two tax increases on couples making more than $250,000 and individuals making more than $200,000. He wants to increase the top tax rates from 35 percent to 39.6 percent by allowing a tax cut enacted under President George W. Bush to expire in 2011.

He also wants to limit the deductions those families can claim for charitable donations, mortgage interest and state and local taxes.

Without the new limits, a taxpayer in the proposed 39.6 percent tax bracket could save $396 in taxes from a $1,000 reduction in taxable income. Obama wants to limit deductions to the 28 percent bracket, starting in 2011, meaning the same taxpayer would save only $280.

The higher tax rates are a good bet to become law because Obama campaigned on the change and Congress would not have to do anything to enact them. Once the Bush tax cuts expire at the end of 2010, the higher rates would take effect.

But some key Democrats are wary of limiting deductions.

"I don't want to prejudge anything, but it is certainly one that I am having difficulties with," said Sen. Robert Menendez, D-N.J.

On Tuesday, Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said he, too, had reservations about the proposal.

"I would never want to adversely affect anything that is charitable or good," the New York Democrat said.

Republicans have been even more critical of the proposal, saying it would reduce charitable donations at a time when many charities are struggling.

"There are people with the means to help. Why would you make it harder for them to do it?" said Rep. Thaddeus McCotter, chairman of the Republican Policy Committee.

Geithner said the change would merely restore the same deduction limits that were in place when President Ronald Reagan left office.

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