Getting It Right on the Obama Tax Plan

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Dan Amira makes a point today about President Obama’s new tax proposal, and I’m trying to figure out if I think it’s mostly a pedantic complaint or one with real substance. You be the judge.

Basically, every news outlet in the country is reporting that Obama wants to extend the Bush tax cuts for those making under $250,000 per year. In fact, even Obama himself describes his own plan that way. But it’s not true.

What Obama is actually proposing is to retain the Bush rates on all income under $250,000. If you’re a middle-class wage slave, this applies to all your income. If you’re a Wall Street lawyer pulling down half a million per year, it applies to half your income. Everyone would have lower taxes than they did in the 90s. The table on the right shows how this would work. (The tax brackets are approximate and apply to married couples filing jointly.)

So the question is: what’s the best way to describe this? The Obama way (“keep the tax cuts for anyone making less than $250,000”) is more populist and a lot easier to understand. The technically correct way is more complicated, but it reduces the alleged class warfare angle a bit. Obama isn’t taking away all the tax cuts the rich got from Bush, just some of them.

So which is better? More populist or more centrist-y? Decisions, decisions…..

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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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