The Tax Dilemma

Most recently there has been a lot of debate about proposed tax raises and tax cuts. Just this Saturday the Senate rejected President Obama’s proposal to raise taxes for the highest-income Americans. Obama’s plan would have extended the lower rates on income up to $250,000 a year for couples and $200,000 for individuals. Obama’s plan was approved by the House but it did not have the 60 votes required to get passed by the Senate. The White House and Congressional leaders are now discussing a deal to extend the reduced tax rates at all income levels, at least temporarily, perhaps for two years. But as the Democrats in the Senate and the White House are split on their views, and many do not want to continue Bush’s economic policies, compromise seems difficult. If Congress does not act, the tax rates expire for everyone on Dec. 31. This means the rate in the lowest bracket would rise to 15 percent from 10 percent and in the highest bracket to 39.6 percent from 35 percent.

I think that the consequences of the absence of a decision make agreeing on these tax rates all the more important. If there is no agreement then there will be a raise for everyone no matter what their income is. I think that whatever action is taken, whether it is a tax cut or a tax raise, the income tax should remain graduated as the government should understand that some for some people, they need all the money they have and for others with a lot of money, they don’t need all of it that much. I’m unsure of how much taxes benefit the economy, but I think that since most of middle and lower class America is suffering heavily from the economy than their taxes definitely shouldn’t be raised. I think that of the different propositions and ideas I would agree with the raising taxes for one million dollar incomes and above since people with that much money are not nearly as affected and damaged by the economy as lower and middle class America.