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The president implored citizens to understand that — like a trapped animal — he was forced to go along with those wanting to preserve the tax cuts in order to be the heroic protector to the middle class. The fact is, the agreement was only to continue those same existing tax rates for two more years. No new tax cuts were given to millionaires or billionaires.
The Boston Consulting Group’s Global Wealth 2010 Report stated that the largest percentage of money gain has occurred in the Asia-Pacific region, where wealth soared 22 percent, or $3.1 trillion. In the tiny republic of Singapore, 11.3 percent of its households were millionaires. Compare that with the U.S. population, where the millionaires make up only 4 percent of our millions of households. Switzerland has more than twice as high a percentage of millionaire households as the U.S. So does Kuwait.
There were 1,210 billionaires in the whole world in 2011. According to a Forbes analysis, 75 of them live in liberal New York City, where Obama has sought much of his campaign funds.
According to data from the National Taxpayers Union and the IRS, the top 5 percent of taxpayers pay about 60 percent of the federal income revenues. A taxpayer with a reported Adjusted Gross Income of as low at $160,000—less than a member of Congress makes—falls into this category. The bottom half of American taxpayers fork over less than 3 percent of the taxes collected.
More than 36 percent of Americans pay no federal income taxes, according to the Tax Foundation and IRS figures. That’s why consumer polls show that many people don’t care if taxes are raised. Why should they? They don’t have to pay them.
According to the Census Bureau, the total number of American households is 117,583,000, with a mean income of $67,976. The number of households with household incomes of under $5,000 is 3,747,000.
In the bracket Obama has his sights trained on — the $250,000-and-over earners — there are 2,372,000 of these. But only 319,000 are millionaires. Roughly 70 percent are small business owners reporting business profits on their personal tax returns. We count on these individuals to provide the most jobs in the U.S.
Obama also wants to get rid of what he calls tax loopholes. But you can’t pay off much of the debt even if, for example, you wiped out all the itemized deductions, most of which really aren’t considered loopholes. According to preliminary data from the IRS for 2009, the figure is less than $1.2 trillion. Total deductions for those at the targeted $250,000-plus level were $217 million.
The future prospects for controlling the debt became even darker last month in an under-reported congressional hearing of the House Subcommittee on Domestic Monetary Policy. Economist Lewis Lehrman pointed out that the level of debt service payments could rise by an order of magnitude and consume a part of the federal budget which today is “almost unthinkable.” He said he sees an uncontrolled $800 billion federal spending increase in four or five years.
The Standard & Poor credit rating service, in a stunning decision April 18, moved its outlook on the U.S. debt from a stable to a negative rating, as all financial services reported. Although the administration said it believed the S&P “underestimates the ability of American leaders to come together,” the respected credit service said it fears that the differences in how to avoid a fiscal stalemate could continue until 2014.
So, it is not only the Republicans in Congress who are raising dire warning signs about our debt. Obama must begin to deal with reality.
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