Tax Cut???

While President Obama has referred to retaining part of the Bush tax cuts for middle class Americans while allowing the cuts to expire for the top tax bracket, it should be point out that even those in the top tax bracket would benefit. Consider the fact that the top tax bracket only applies to that income that exceeds a certain amount. In the case of a single taxpayer, the top rate of 39.5% only applied to AGI (adjusted gross income) over $288,350. For AGI less than $288,350, the difference between before and after Bush cuts is $4,764.00. In other words, the top 1% would still get a tax cut of $4,764.00 which would be more tax savings than any other taxpayers. Everyone with an AGI of $288,349.00 or less would also get a tax cut but their cut would be less than $4,764.00. On the other hand, the pre-Bush tax on a single person with $50,000 AGI would have been $10,587.50 or an effective tax rate of 21.175%. The result of the Bush tax cuts on a single person with $50,000 AGI result in a tax of $10.035.00 or an effective tax rate of 20.07% and a tax reduction of $552.50. Compare the savings of $552.50 to $4,764.00 and by all measures, the wealthy still would benefit from rolling back all but the top tax bracket. In fact the $4,764.00 would only be offset by the increased 4.5% in the top tax rate after an additional $105,867 of AGI over $288,350. There is a saying that pigs get fat but hogs get slaughtered and those at the top are beginning to sound like hogs!