The Lie that the Middle Class Won't Pay

Eli,

Another Sunday, another inane NY Times editorial and another day for politicians to propagate the lie that the middle class won't pay for bringing the federal government's fiscal house in order. Of course the middle class will pay. It will pay for a very simple reason: that's where the money is and that's where the spending is.

I've shared this graph before. It's from 2010 IRS data and shows adjusted gross income for various income brackets.

Total AGI for income brackets less than $30,000 totals 11.7% of the total. The millionaires and billionaires, oddly defined by you and Obama as those making over $250,000 isn't available in this IRS breakdown, but those posting AGI greater than $200,000 equals 26.7% of total AGI, and the middle class, those earning between $30,000 and $200,000 is 61.6%.

Obama has proposed between $1.2 and $1.6 trillion of tax increases on millionaires and billionaires earning more than $250,000 per year. Now that's over a 10 year period, so about $120 billion to $160 billion per year. Given the deficit in fiscal 2012 was about $1.2 trillion, you need to raise taxes on millionaires and billionaires a lot more or cut spending or raise taxes on the middle class.

My best guess is the increases in taxes for millionaires and billionaires making more then $250,000 per year proposed by Obama is about the most they are going to propose. So if he really wants to address the deficit, which I doubt he does, he has to cut spending, which overwhelming goes to fund welfare for the middle class via social security and Medicare or raise taxes on the middle class.

The middle class will pay, one way or another.

Bill