What are Tax Day Tea Parties protesting?

[jundp 191]

What Are Tax Day Tea Parties Protesting?

About these tax-day tea parties: It's obviously fine if citizens want to exercise their first amendment rights and hold protests. Admirable, even. And if these protests are underwritten by corporate backers or supported by various media organizations (there seems to be some debate about this), that's OK too. First Amendment rights all round!

But what I don't understand is why these rallies are being held to protest, among other things, "higher taxes." (Higher spending is another matter.) There is a widespread perception that Obama is raising taxes willy nilly, so maybe this is worth clearing up.

As far as I know, there are five individual tax provisions in the president's budget that could be described as a tax increase. So yes, there will be some higher taxes. What's confusing to me is that the vast majority of these taxes affect only those households with an annual income of greater than $250,000. And the vast majority of these increases would have happened anyway if the Bush tax cuts were allowed to expire on schedule.

But let's go through them one by one. The five tax increases that I see are:

1. Eliminating the Advance Earned Income Tax Credit. This isn't a proposal to eliminate the EITC -- it's just a proposal to eliminate a particular way of claiming the EITC that is extremely complicated, that almost no one uses, and that leads to a high level of tax error. As far as I know, eliminating this is not controversial.

2. Letting the top two income tax rates revert from 33 to 35% and from 36 to 39.6%, respectively. This is obviously a tax increase. But it is also (1) Something that would happen anyway were the Bush tax cuts to expire on schedule; (2) Something that isn't happening till 2011; (3) Something that Obama repeatedly said he would do; and (4) Something that will affect only those households with annual income over $250,000.

3. Eliminating the phaseout of personal exemptions and itemized deductions for high-income taxpayers. (This is complicated because it involves ... a phaseout of a phaseout of a complicated law. Explanation here.) But the end result will affect the exemptions and deductions of only those households that earn more than $250,000 a year.

4. Limiting the top charitable deduction rate to 28%. I've written about this many times elsewhere and I think it's a tempest in a teapot.

5. Increasing the top capital gains and dividends tax rate to 20%. Again, this (1) will start in 2011; (2) would have happened were the Bush tax cuts allowed to expire on schedule; and (3) affects only those families with annual income above $250,000.

So are the majority of the protesters worried about taxes that won't affect them? Perhaps when the tax-day protesters worry about higher taxes, they mean to protest anticipated future taxes that will result from higher present debt. (I'm certainly concerned about that!) But I'm not sure a protest in favor of the abstract notion of Ricardian equivalence has the same drama as a protest against higher taxes. Or am I missing something?

Source

[one...two...tree 2,762]

Thanks for the post, Jen.

It's worth noting that Reagan, the godfather of the GOP, loved loved loved the EITC.

[w¡n9Nµ7 §£@¥€r 123]

Obama raised my taxes oh nooooooooooooooooooooooooooo i'm dying will someone please help i'm being crushed under all these pathetic loser poor people and eitc oh noooooooooooooooooooooo save me from tyranny somebody please!

[one...two...tree 2,762]

Obama raised my taxes oh nooooooooooooooooooooooooooo i'm dying will someone please help i'm being crushed under all these pathetic loser poor people and eitc oh noooooooooooooooooooooo save me from tyranny somebody please!

I wanted to ask my brother if his taxes went up (I'm willing to bet my left lung they actually went down), but I didn't dare because he has a short fuse.

[w¡n9Nµ7 §£@¥€r 123]

I wanted to ask my brother if his taxes went up (I'm willing to bet my left lung they actually went down), but I didn't dare because he has a short fuse.

Ask most people that question and the answer will be based on whether they paid more or less, not based on whether their effective taxation rate went up or down.

[Ban Hammer 13,364]

yup, cigs went up $12 a carton and it's apparently not a big deal - to some.

hello! that's a tax on me as i smoke!

[w¡n9Nµ7 §£@¥€r 123]

yup, cigs went up $12 a carton and it's apparently not a big deal - to some.

hello! that's a tax on me as i smoke!

Go tell someone who cares. Where's Len?

[w¡n9Nµ7 §£@¥€r 123]

The Tax Poem

Tax his land,

Tax his bed,

Tax the table

At which he's fed.

Tax his tractor,

Tax his mule,

Teach him taxes

Are the rule.

Tax his work,

Tax his pay,

He works for peanuts

Anyway!

Tax his cow,

Tax his goat,

Tax his pants,

Tax his coat.

Tax his ties,

Tax his shirt,

Tax his work,

Tax his dirt.

Tax his tobacco,

Tax his drink,

Tax him if he

Tries to think.

Tax his cigars,

Tax his beers,

If he cries

Tax his tears.

Tax his car,

Tax his gas,

Find other ways

To tax his a s s.

Tax all he has

Then let him know

That you won't be done

Till he has no dough.

When he screams and hollers;

Then tax him some more,

Tax him till

He's good and sore.

Then tax his coffin,

Tax his grave,

Tax the sod in

Which he's laid.

Put these words

Upon his tomb,

Taxes drove me

to my doom...'

When he's gone,

Do not relax,

Its time to apply

The inheritance tax.

Edited April 17, 2009 by Randomizer

[Ban Hammer 13,364]

yup, cigs went up $12 a carton and it's apparently not a big deal - to some.

hello! that's a tax on me as i smoke!

Go tell someone who cares. Where's Len?

you like living dangerously, don't you?

[jundp 191]

yup, cigs went up $12 a carton and it's apparently not a big deal - to some.

hello! that's a tax on me as i smoke!

Poor baby. That's so sad. It will now cost you even more to kill yourself and all those around you.

Former smokers are the worst....

[w¡n9Nµ7 §£@¥€r 123]

yup, cigs went up $12 a carton and it's apparently not a big deal - to some.

hello! that's a tax on me as i smoke!

Go tell someone who cares. Where's Len?

you like living dangerously, don't you?

[one...two...tree 2,762]

I wanted to ask my brother if his taxes went up (I'm willing to bet my left lung they actually went down), but I didn't dare because he has a short fuse.

Ask most people that question and the answer will be based on whether they paid more or less, not based on whether their effective taxation rate went up or down.

Do you see the same old Republican playbook tactics going on with this? They either think that the American people have very short memories or they believe Americans are too stupid to notice. Either way is patronizing the American people.

[w¡n9Nµ7 §£@¥€r 123]

I wanted to ask my brother if his taxes went up (I'm willing to bet my left lung they actually went down), but I didn't dare because he has a short fuse.

Ask most people that question and the answer will be based on whether they paid more or less, not based on whether their effective taxation rate went up or down.

Do you see the same old Republican playbook tactics going on with this? They either think that the American people have very short memories or they believe Americans are too stupid to notice. Either way is patronizing the American people.

Remembering the bottom line number (number of dollars paid to the IRS) is going to be the obvious number most people pay attention to. And most people made more this year than last, so their taxes go up. It may be cynical but I do think it works.

[one...two...tree 2,762]

I wanted to ask my brother if his taxes went up (I'm willing to bet my left lung they actually went down), but I didn't dare because he has a short fuse.

Ask most people that question and the answer will be based on whether they paid more or less, not based on whether their effective taxation rate went up or down.

Do you see the same old Republican playbook tactics going on with this? They either think that the American people have very short memories or they believe Americans are too stupid to notice. Either way is patronizing the American people.

Remembering the bottom line number (number of dollars paid to the IRS) is going to be the obvious number most people pay attention to. And most people made more this year than last, so their taxes go up. It may be cynical but I do think it works.

[w¡n9Nµ7 §£@¥€r 123]

Steven,

Honor system now. Without looking or thinking about it more than a few seconds, which do you remember? The total number of dollars you paid in Federal income taxes in 2008 or the effective rate?