New York Times reporter Jonathan Weisman helped the Democrats' tax-hike agenda in his front-page story Wednesday, "At Fiscal Cliff, Anti-Tax Vow Gets New Look."
Senate Democrats — holding firm against extending tax cuts for the rich — are proposing a novel way to circumvent the Republican pledge not to vote for any tax increase: Allow all the tax cuts to expire Jan. 1, then vote on a tax cut for the middle class shortly thereafter.
The proposal illustrates the lengths lawmakers are going to in an effort to include new federal revenues in a fix for the “fiscal cliff,” the reckoning in January that would come when all Bush-era tax cuts expire and automatic spending cuts to military and domestic programs kick in.
Weisman played around with the numbers to suggest Obama's tax hikes wouldn't hurt a bit. [Emphasis added.]
Numerically, Republicans and Democrats are not as far apart as the exchanges would suggest. President Obama has proposed allowing tax cuts to lapse on incomes over $250,000, raising the top two income tax brackets, allowing capital gains tax rates for affluent families to rise slightly and letting dividend income be taxed as ordinary income, as it was before 2003. Of the $5 trillion in tax increases that will ensue over 10 years if nothing is done, Mr. Obama’s plan would stave off all but $849 billion.
That tax increase on the rich would amount to 0.38 percent of the economy, considerably smaller than the tax increase secured by President Bill Clinton in 1993, which equaled 0.63 percent of the economy, according to White House calculations.
Since Weisman left off the actual tax rates on actual taxpayers, here are the specifics: Obama wants to increase the top two tax rates from 33 to 36 percent and from 35 to 39.6 percent, a roughly 10% tax hike. And capital gains tax rates for the wealthy would rise from 15% to 20%, a 33% increase.