Posted by: James Atticus Bowden | February 26, 2009

Obama’s Tax and Spend Numbers Don’t Work

President B. Hussein’s Obama’s numbers on increasing revenue and taxes don’t add up.   

(Wall Street Journal, Feb 25, 2009) “Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.”

“Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.”

“But let’s not stop at a 42% top rate; as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.”

“Small- and medium-sized businesses are the nation’s primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively “small business” is defined. These owners will find a way to declare less taxable income.”

Okay, Class, let’s review.  If you take double the taxes of every person who earns over $200k (which is more than Obama says he’ll take – cause he only wants the money over $250k [LOL] and he isn’t talking about doubling) – then… $1.044 trillion < is less than the $trillions in new spending and bailouts.

The U.S. can’t get there, cut deficits, from here – increasing taxes and spending.

Obama’s numbers don’t add up.

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