Get the Gist of the Tax Plan Debate
All you hear on the news today is party talk—the Republican Party, the Democratic Party, and now infamous the Tea Party, but we want to talk about the one party we will all most likely agree on: the cocktail party! (And yes, this is still an article about taxes.) So, what on earth do taxes and cocktails have in common? Well, for the purposes of this piece, we’re going with a scenario you may well find yourself in this weekend…
Picture this: You’re at a cocktail party, and the super-heated subject of the current tax debate comes up. The most gorgeous person you’ve seen in ages turns to you and asks your opinion of the situation (Yes this is reality—are you prepared?). Well, if you don’t already have a grasp on the issues, here are the basics of what you need to know to hold your own!
What’s All the Fuss?
The heated debate between parties centers around the Bush Tax Cuts that were put in place in 2001, and are due to expire on Dec 31st. The meat of the argument has boiled down to this: Will the tax cuts be renewed for everyone, or for everyone except the richest 2% of Americans? And which scenario has the best shot at aiding our ailing economy?
Who Are the Richest 2%, Anyway?
If you live in a major city, your view of ‘super rich’ might well be skewed. You might be thinking the richest two percent are those making over—what—ten million? Surprise! It’s actually $200,000 for individuals and $250,000 for couples. If it turns out that your gorgeous party companion is in the top 2%, his or her taxes will actually go up under the Obama plan. So instead of paying the 35% income tax that he pays now, his or her taxes will increase to 39.6%.
Here’s Where the Parties Agree
Well, if there is one silver lining to the economy being in the dumps, it’s that both parties can actually agree—they don’t want to raise taxes on the vast majority of Americans! In general, both sides agree that renewing the Bush Tax Cuts for Americans earning under $200,000 a year is a good idea. Chances are, you probably fall into this group, thus your personal taxes won’t go up.
To read more about the tax cuts (and better arm yourself for that next cocktail party), read the entire article HERE, at Fabulous And Frugal.