Under Obama, a $4000 tax on the middle class

Many thanks to my partner for the recent presentation. We cannot reliably calculate future hypothetical scenarios The argument that Obama has raised taxes on the middle class by $4000 has been dropped President Obama’s stated policy does not allow for significant tax hikes on the middle class President Obama did not author the Bush Tax Cuts, and cannot be held responsible for the inclusion of an expiration date Congressional Republicans will need to write the $4000 tax increase into law – not President Obama A recent television ad by the Romney campaign is airing in several key battleground states. The advertisement shows clips of the Governor speaking at the Denver debate, arguing against raising taxes on “anyone” during the recession. As Governor Romney is speaking, the words, “Under President Obama: $4,000 tax hike on middle class families” appear on-screen. Most middle class families are aware by now of how much they have paid in taxes “under Obama.” Since there has been no such $4000 increase, this statement has begun to generate quite a bit of buzz, with many asking for the statement to be clarified. In response, the Romney campaign issued a statement that explains that the $4000 per family figure came originally from a study conducted by the right-wing American Enterprise Institute. The study attempted to lay out possible scenarios by which payments on the Bush-era national debt might be spread across various income groups, with the $4000 figure pertaining to those families earning between $100,000 and $200,000 a year. (Calculated with interest over a decade long payment period.) The problem with the claim, according to fact checkers that have studied the subject, is that the debt payments represent a “cost that must be paid” – and not a tax hike. [1] My partner takes a different tack, which deviates sharply from the Romney campaign. He attempts to demonstrate that middle class families actually will pay around $4000 more in taxes each year as a result of President Obama’s stated policies. His argument, however, includes serious logical problems. I will explain: Logical Problems: The centerpiece of my partner’s argument, as I understand it, is: President Obama must allow the Bush Tax Cuts to expire for the middle class. Therefore, the resulting increase in tax payments will belong to President Obama. However, there is no reason why an Obama supporter necessarily must agree that this president absolutely will allow the Bush tax cuts to expire for the middle class. It is the current policy of this administration that the tax cuts will be extended for the middle class. If speculation as to what might happen in some future hypothetical is allowed, then I can just as easily say that “president Obama will give every middle class family a pony.” In order to offer a compelling reason for certain belief that future middle class tax hikes will occur, we need something more definitive. Considering that future legislation can replace current law, intellectual integrity requires us to obtain better information upon which to base our predictions of the future. Important to this logic is that the legislature will be required by law to author any such tax increases – and this will mean Republican Party support for any such tax hike – an unlikely scenario. Another problem with this argument is that there is no logical way that President Obama can be blamed for a “tax increase” if the Bush tax cuts are allowed to expire – even if a tax increase occurs. I justify this amazing statement thusly: President Obama did not author, or sign into law, or support the Bush tax cuts. It was the former Congress and President Bush that created and passed the Bush tax cuts, and it was they who wrote into the legislation the clause that requires them to expire. Therefore, if the tax cuts do expire, it will have been the ‘fault’ of the Congress and President Bush… the parties who legislated this expiration. Therefore, any resulting ‘tax increases’ would have been authored by this previous Congress and President Bush, not Obama – who simply allows these existing laws to stand. As my partner points out, The Bush Tax Cuts were extended with Obama’s consent. Therefore Obama “matched” the value of these cuts. If the value of these cuts is removed, by allowing them to expire, then tax rates will “zero out,” returning rates to the original value. In order to represent a tax “increase” tax rates will need to be higher – as calculated before the enaction of the Bush Tax Cuts in the first place. The argument that President Obama absolutely must allow these cuts to expire for the middle class is never made. I argue that such evidence is a necessary component of any argument that they will. This requires that the “calculations” section in the previous presentation be disregarded as unlikely to occur without the help of the congress. As this congress is controlled by Republicans who seem passionately opposed to President Obama, I argue that no such tax increase is likely…even if President Obama desperately wanted to enact them. ObamaCare Taxes Claim: Starting January 1, 2013, the Obamacare additional payroll tax will take effect. Rebuttal: No it won’t. This tax is not any part of the Affordable Care Act (ObamaCare), but an “Additional Medicare Tax.” And it will not apply to members of the middle class – only to those making more than $200,000 a year are eligible. [2] Claim: The Individual Mandate Provision of ObamaCare will cost each taxpayer at least $695. Rebuttal: The Individual Mandate, because it is not revenue that is collected by the Congress for public use, is not a tax. The Individual Mandate is a mandated purchase of a product – and the money that goes towards that purchase is paid over to an insurer, not the federal government. The penalty for refusing to obtain health insurance coverage is allowed under Congress’ Constitutional power to regulate all taxation, and is a penalty. This penalty itself is not a “tax,” even though it is made possible by the Congressional authority to levy taxes – and it does not apply to anyone who is covered by an insurer. Furthermore, the cost of the mandated purchase of health insurance is offset by tax cuts. [3] An estimated 19 million Americans will receive tax credits under ObamaCare that average around $5,400. This compares to the average tax penalty, which is likely to impact only 6 million taxpayers, and even then only those who refuse to purchase their own health coverage. The average penalty will amount to about $600. Obamacare gives an average tax deduction of $5,400, and may impose a penalty averaging around $600. I am out of room. In the next round, I will demonstrate how President Obama has actually cut middle class taxes in his first term more than President Bush did in his. For now, my argument as of this round is: It is impossible to reasonably expect Congress to allow any $4000 tax hike on middle class families over Obama's next term. Therefore, this scenario is unlikely to occur. Additionally, tax cuts for the middle class found in the ObamaCare legislation more than overwhelm any penalties for refusing to purchase private health care insurance. In order to demonstrate that President Obama is likely to raise taxes by $4000 in his next term, my partner will have to show why the Republican Congress should be expected to write any such legislation, or to allow it to pass.[1] Politifact – Pants On Fire Ruling: http://www.politifact.com... [2] The Additional Medicare Tax on Income above $200,000 http://www.irs.gov... [3] Article explaining how ObamaCare tax cuts will offset the costs of obtaining insurancehttp://thinkprogress.org...