President Obama has made it absolutely clear that he's going to allow the Bush tax cuts to expire, which means that those households earning over $250 000 annually would see increases in their income taxes.
Which of course has lead the Right Wing Reactionaries and their MSM lackies to begin incessantly wailing and gnashing their teeth, proclaiming that these are the end times for upper-middle class families and small businesses because ZOMG OBAMA WILL SEND YOU TO THE POOR HOUSE.
There are lies, and there are damned lies, and then there's horseshit.
Here's a cute little article from a source that usually sucks at getting things right, the Associated Press:
Republicans and other critics, knowing they will get little mileage from defending the rich, instead are casting the plan as a tax hit on people who run industrious little companies driving job growth.
That's not likely, according to one in-depth analysis, which found that more than 95 percent of small business owners would be off the hook.
But - but - but - what about small business owners who file their business income as personal rather than corporate?
As well, many small businesses with employees don't earn enough to put their owners over the threshold for the higher tax rates.
Indeed, most of them — like Joe the Plumber of presidential campaign fame — would probably get Obama's tax break for the middle class.
That's fine I guess, but what about those of us who do earn over $250,000 per annum ... wouldn't the expiration of the Bush tax cuts mean that someone who earns $251,000 might actually take home less than someone who makes $249,000? That's what all our trusted newspeople are telling us, right? THOUSANDS IN EXTRA TAXES!!!
Well, it's true. But only if you're doing your math wrong
The way that the US system works is that there's a base rate of taxes. You pay the base rate on all of your income up to a threshold. When you cross that threshold, the tax rate on the part of your income above that threshold is increased. The Obama proposal is to add a new threshold: the tax rate on the part of your income above $250,000 would be increased - not the tax rate on the entire thing.
To go back to our example, imagine that $250,000 was the only threshold, and that the base tax rate was 20%, but that the rate on income above $250,000 was 30%.
If your income was $249,000, then your tax bill would be the same - $49,800, for a take-home of $199,200. If your income was $251,000, then you'd pay 20% on the first $250,000, and 30% on the $1,000 above $250,000. So your tax bill would be $50,000 + $300 = $50,300 - for a take-home of $200,700. Of your extra $2,000 in income, you'd take home $1,500 - or 75%.
Since the media clearly has no interest in things like facts and figures, it's up to you to tell your rich friends they have nothing to fear. They can even continue to rub your nose in their decadence, if that's their thing. So long as this ZOMG TAXES meme goes to sleep for now.
Now what to do about ZOMG SOCIALISM?