The Tax Policy Center study found that Anericans earning less than $200,000 will pay higher taxes despite the President’s 2008 pledge to the middle class unequivocally stating that they would see absolutely no increase in taxation. The result will be less disposable income and a hit to charitable giving.
The tax increases come in three forms: an increase to tobacco taxes, changes in personal exemptions and a recalculation of inflation.
As more low-income earners smoke than higher-earners, the increase in taxes on cigarettes will be necessarily regressive – hitting the poor much more than anyone else. Obama’s budget nearly double the federal tax from $1.01 to $1.95 per pack.
Exemptions will diminish in value each year as a new inflation calculation formula forces middle-income earners into higher tax brackets each year.
Being forced into a higher tax bracket will leave less disposable income for those of moderate incomes. With more money being funneled to an inefficient federal government, middle class families will have fewer dollars to spend how they see fit.
As more earners get pushed into higher tax brackets, the amount they can claim for charitable giving diminishes. Combined with fewer dollars left after taxes, charities are likely to see more funds going to government programs that used to be directed to them by willing citizens.
The President’s budget reflects a core ideal: the government can take care of people better than private charities. As more government programs, like the Obamaphone give-away, are shown to be wasteful, taxpayers should question the redirection of money that would otherwise have likely gone to charities.
This is the second increase in taxes the middle class has seen from the President in recent months. Earlier this year, most Americans saw their paychecks shrink as the President discontinued the Bush tax cuts.
The hardest hit in Obama’s budget are those making more than $200,000. The same group the President targeted in his January tax increase.Wake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!