Obama says Republicans blocking middle-class tax cuts

Obama said in his address that he stands ready to work with Republicans on a plan that spurs economic growth, creates jobs and reduces the national deficit.

Then drop the upper individual tax-hike rate Mr. President or since you insist on it and then change and modify it to exempt all "pass through" entities to satisfy your class warfare rhetoric to make your base happy and score your political victory. The times really have changed. Small Business owners are in fact the ones that are going to end up getting clobbered here, they will be cutting back on hiring and hurting economic growth and not your depiction of that these folks your after are just the fat cats of society. The Republicans are right on this, its really is going to hurt jobs and job creators and that is the last thing we need.

From the Tax Policy Institute, non-partisan and established in 1937:

To understand the impact of higher tax rates on business income, it is instructive to look at the tremendous growth in taxpayers reporting business income over the past three decades as sole proprietors, S corporations, limited liability corporations (LLCs), and partnerships. These non-corporate firm types are often referred to as “pass-through” entities because the firm’s profits are passed directly through to the owners and taxed on the owner’s individual tax return. In the four years after the 2003 tax cuts, the net income of pass-through businesses grew by nearly 60 percent, after adjusting for inflation. In 2008, pass-through business income exceeded C corp receipts by 56 percent. It is often assumed that a tax increase on high-income individuals will have little impact on business activity because only 2 or 3 percent of taxpayers with business income are taxed at the highest rates. While this statistic is true, the more economically meaningful statistic is how much overall business income will be taxed at the highest rates. For example, Treasury data for 2007 indicates that 50 percent of all pass-through income is earned by taxpayers subject to the top two tax brackets of 33 percent and 35 percent A recent Treasury report analyzed IRS data from 2007 and found that roughly 4.2 million pass-through business returns—out of 34.7 million overall—were employers. As lawmakers consider policies to improve the competitiveness of American businesses, they should not forget that individual income tax rates are just as important to business activity as the corporate rate. The various proposals to raise income taxes on high-income earners, either by increasing the top marginal rate, closing “loopholes,” limiting deductions, or implementing a minimum tax, would fall very heavily on America’s non-corporate businesses. These flow-through businesses account for a large percentage of business income and employment in the United States. Raising taxes on them at this time could curtail their hiring and other investment plans, further delaying economic recovery.

Those nasty Republicans! I cannot understand why Americans voted so many of them into the House of Representatives - they'll only give President Obama a headache.

Apologies,

Just for clarity the above information are excerpts that I had taken from the Tax Policy Institute fact sheet, I do not want to give the impression that this was the full fact sheet they had compiled.

Full fact sheet report for those interested can be found here.

http://taxfoundation.org/article/individual-tax-rates-also-impact-business-activity-due-high-number-pass-throughs

"The Republicans are always the bad guys" I am so sick of hearing this that I can't stand it anymore. Go to factcheck.org and find out from an objective standpoint. Use your heads people and make an informed decision.

To all four of you, this has come down to the richest 2% paying just 4.5 % more taxes. 4.5% ! And on top of that, the 4.5% rate applies only to their income above $250,000.

paulinusaDec. 09, 2012 - 11:41AM JST : To all four of you, this has come down to the richest 2% paying just 4.5 % more taxes. 4.5% ! And on top of that, the 4.5% rate applies only to their income above $250,000.

That include taxes on dividends earned too.

Obama is making this into the Republicans not wanting to tax the rich when he is not making a lot of spending cuts at the same time.

Raising taxes and not cutting spending means the country will still be in the hole.

skipbeatDec. 09, 2012 - 11:53AM JST

paulinusaDec. 09, 2012 - 11:41AM JST : To all four of you, this has come down to the richest 2% paying just 4.5 % more taxes. 4.5% ! And on top of that, the 4.5% rate applies only to their income above $250,000.

That include taxes on dividends earned too.

Unless you have a naked capital investment. All dividends in retirement fund is excluded.

globalwatcherDec. 09, 2012 - 12:16PM JST : Unless you have a naked capital investment. All dividends in retirement fund is excluded.

That may be true now. That won't be the case under Obama raising taxes on the people making $250,000.

Would Raising Taxes On Investment Income Hurt The Economy? @ http://www.npr.org/blogs/itsallpolitics/2012/11/29/166180020/would-raising-taxes-on-investment-income-hurt-the-economy

If Obama gets what he wants in the fiscal cliff negotiations, capital gains would go from being taxed at 15 percent to more than 20 percent for high-income Americans. And dividends would go from that same 15 percent rate to more than 39 percent.

I have not seen how it is written, but the way it is explained is that if your earned income is more than $250,000, then the capital gains would go from 15% to 20%. The article is not mentioning anything about the capital investment in retirement Roth IRA, IRA and 401k. It may be referring to the naked investment includes income property, naked capital investments profit and dividents, saving, bond transactions and so forth. I cannot say for sure as I have not seen the actual proposals in writing.

Obama's tax increase will, at best, only reduce the yearly deficit by 15%. So, instead of having to borrow a trillion dollars a year to finance the government, the US would only have to borrow 850 billion. That's not much of a plan.

As Rubio said, the problem is in government overspending, not undertaxing. The US government overspends by $3 billion every DAY of the year. Something like 1/3 of the money spent by the government comes from borrowing. That is simply not sustainable. Also, it is immoral. It is akin to parents taking out a credit card in their childrens' name, and then maxing the card because their own cards are already maxed out.

Shame on the President for having so little a grasp of basic economics.

by $3 billion every DAY of the year

On two wars. Hopefully, we can pull whole troops from Afghan soon.

globalwatcher - Obama has had 4 years to pull the troops from Afghanistan. What gives?

Global watcher; Sorry, but you are wrong.

Even the most liberal publications put the costs of the wars at about $700 million per day at their height. Now that they are winding down, the cost is lower. So, that accounts for only 1/4 of the daily overspending. According to the President's 2011 budget, about 160 billion was needed for both wars. Again that is less than 20% of the federal deficit.

The President is responsible for the rest of the overspending.

" I have not seen how it is written, but the way it is explained is…"

The Devil is in the Details. If you recall how Social Security was foisted on the gullible masses as well as the "temporary" income tax in times past, is there really any reason to take the duplicious duper at any word?

Obama's tax increase will, at best, only reduce the yearly deficit by 15%. So, instead of having to borrow a trillion dollars a year to finance the government, the US would only have to borrow 850 billion. That's not much of a plan.

The mathematics just don't add up, not to mention that Obama refuses to cut spending, so I'm not even sure if 15% cutting the deficit is correct, I could be wrong though.

Shame on the President for having so little a grasp of basic economics

I've been saying that for the last 4 years.

On two wars.

I sure hope you are NOT starting with that again. I think people are regaling getting tired of that argument.