How Obama's tax plans would 'spread the wealth around'
Expect income and estate taxes to be raised on the most wealthy, not "Joe the Plumber."
Barack Obama's message to "Joe the Plumber" that "when you spread the wealth around, it's good for everybody," gave Republicans an opportunity to charge the Illinois senator with wanting to raise taxes and redistribute the extra revenue.Skip to next paragraph
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Recent public opinion polls indicate that, regardless of the charge, Sen. Obama will probably become president next year. So his plans to share the wealth become extra significant.
"I don't mind paying just a little bit more than the waitress that I just met over there [who] ... can barely make the rent," he told Joe Wurzelbacher, the Ohio plumber. "Because my attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody."
If Obama actually does occupy the White House in January, his tax proposals will be subject to the will of Congress. These proposals could remain more intact if Democrats obtain a veto-proof majority of 60 in the Senate. A continued economic slump also will shape the design of any tax changes.
In any case, Obama's tax plans indicate he wants the income tax and estate tax to be progressive, that is, costing the well-to-do proportionately more than the middle class and the poor. Whether his plans are stern enough to end the decades-long drift of income to the very highest rung of the income ladder is debatable. The blows of the present financial crisis to the wealth of many rich people may do that trick for a time.
What Obama proposes is to allow President Bush's income tax cuts of 2003 to expire for married couples with adjusted gross incomes (AGI) above $250,000 and single people with AGI of $200,000.
That change would hit only the most affluent 2.3 percent of American taxpayers, figures Bob McIntyre, director of Citizens for Tax Justice, a liberal think tank in Washington. Obama would extend the Bush income tax cuts and enact several new tax cuts for the remaining 97.7 percent of taxpayers. So Joe the Plumber would get a tax break since he's not one of the 2.3 percent taxpayers.
Should Mr. Wurzelbacher reach his dream of becoming wealthy, his tax burden could become larger under Obama's plan.