I just read this article:
According to the article (and common sense) there are three ways the U.S. can get its debt under control:
• Cut spending
• Raise taxes
• Some combination of both
The article then went on to explain what would have to be done if the debt were to be paid off strictly from increasing income taxes. One of the ideas is to raise all the brackets by roughly 1/3.
Let’s explore that idea.
Here’s a look at 2009’s brackets (married) and the amount of tax paid on a taxable income of $100,000:
Now, here is what the impact of raising tax rates on the brackets would have on the same taxable income of $100,000:
That’s an increase of roughly $500 per month in federal income tax. For a family with $50,000 in taxable income, the difference would be nearly $200 per month.
It’s also going to impact those at lower income levels because the rates on the lower brackets would increase along with all the other rates. HOWEVER, due to credits and such, the impact wouldn’t be as bad for them.
We have to decrease spending. How? What? I have no idea.
Oh, and for those who think we should just put the entire burden on the “rich,” I’d like you to read this editorial that was in the WSJ recently: The Rich Can’t Pay for ObamaCare. In other words, the rich (including the congressmen and women who voted for this bill) will simply find ways to avoid paying taxes.
UPDATE: I wanted to add that these numbers begin at taxable income which is your income minus deductions and personal exemptions. If any changes occur to these areas, your tax burden could be higher. Also, keep in mind that the brackets are usually adjusted on an annual basis for inflation.