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Category: Money

New Option: Tax the REALLY Rich

Written on October 14, 2010 by Japhet Writ

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Many politicians aim to extend the tax cut for households that makes up to $1 million. But not President Obama. Will there be any way to achieve a consensus that can go on permanently?

has drawn a line on the Bush tax to $250,000 that is set to expire by the end of the year. The president favors to let them expire permanently for households making below $250,000 and individuals making less that $200,000. argues that the economic recovery won’t be harmed by an increase on tax on the wealthiest. However, many Democrats worry that it might and suggest a higher income threshold.

President Obama, in his many recent speeches, pointed out that the country can’t afford to borrow $700 billion “to give a worth an average of $100,000 to millionaires and billionaires”. According to Sean West, an US policy analyst in Eurasia Group, raising the income threshold to $1 million is a deal that can cover both sides. Obama can still raise the tax on the richest of the rich, and many small businesses hitting the $250,000 threshold could ride on-board.

Roberton Williams, a senior at the Tax Policy Center, offered an estimate that letting the tax cut expire for those making over $500,000 would drop the number of households paying more tax to 50 percent. However, West believes that whatever compromise is struck , the word “permanent” will not be a part of it.

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