The Democratic Party believes in cutting taxes for the middle and lower classes and raising them for the upper class. Democratic views on taxes also include the belief that an overhaul to the tax code and system are necessary. They vehemently oppose tax cuts such as those made by George W. Bush that provide relief to the wealthy in addition to the middle and lower classes, stating that the United States needs “a tax code that rewards work and creates wealth for more people, not a tax code that hoards wealth for those who already have it. With the middle class under assault like never before, we simply cannot afford the massive Bush tax cuts for the very wealthiest.” Democrats believe that, seeing as the 1990s were a prosperous time for America, tax code should be brought back to its state during this era.
Democrats and Taxing The Upper Class
Democrats believe in setting the income level at which Americans are taxed more heavily at $200,000 a year, stating that this is “the same level as in the late 1990s, a period of great prosperity when the wealthiest Americans thrived without special treatment.” They believe that not doing so leaves the country in a condition where “it would let the richest one percent of Americans afford a new sports car and middle class Americans afford a warm soda.” They believe that this will pave the way for cutting the taxes for the rest of Americans. With the money that is produced by increasing taxes for the wealthy, the Democratic Party hopes to “cut taxes for 98 percent of Americans and help families meet the economic challenges of their everyday lives. And we will oppose tax increases on middle class families, including those living abroad.” They believe that the tax breaks proposed by the current administration would generate $2 trillion for the government. They would also like to cap tax breaks for the wealthy at 28 percent, which would generate over $584 billion over the next decade. This would limit the upper class’ breaks for mortgage interest, charitable contributions, municipal bond interest, and employer provided health insurance. The top capital gain tax would be raised to 23.8, and unearned income tax would be given a 3.8 percent tax.
Dividends and Estates
Democrats also hope to raise dividends and estate taxes. The current administration plans to take dividends from their current 15 percent up to 43.4 percent. They wish to drop the estate tax exemption to $7 million (it is currently at $10.24 million). However, Obama has faced challenges from the rest of the party on this issue. Senate Democrats didn’t include the estate-tax language in the bill they passed back in 2012. Instead, they set the top rate on dividends at 23.8 percent.
Democrats vs. Republicans on Taxes
While Democrats discuss raising taxes on the wealthy and lowering them for other classes, their game plans often lack detail. This fact has gained them a good deal of criticism. English, a lobbyist at Arent Fox LLP, states, “the Democrats have been extremely disciplined in framing tax questions in purely political terms without the need for precision. So what you have is a debate that is a caricature of the reality but is very poorly challenged.” Many worry that this practice hurts Democrats in elections as well. “The American people want to hear not just what you’re against, but what you’re for,” explains Wyden, a member of the Senate Finance Committee. He believes that, when making arguments for tax policies, Democrats need to move away from general terms such as “raise” and “lower” and focus on exact numbers.
Obama on Taxes
President Obama has made substantial changes to tax policies during his time in office. His party stands firmly behind these changes, stating, “President Obama and Democrats in Congress cut taxes for every working family, putting more money in the pockets of Americans who need it most. A typical family has saved $3,600 during his first term. Now he’s fighting to stop middle class families and those aspiring to join the middle class from seeing their taxes go up and to extend key tax relief for working families and those paying for college, while asking the wealthiest and corporations to pay their fair share.” Obama and his administration believe that the Republican alternative of cutting taxes across the board would be extremely harmful to the country’s economy. The 2012 Democratic Party Platform states, “we will always vigorously oppose the type of tax reform supported by Mitt Romney, which independent experts have found would require raising taxes on typical families with children by at least $2,000 if it were paid for. At the same time, Mitt Romney’s plan would cut taxes for those making over $3 million by an average of $250,000 and would create incentives that will lead to hundreds of thousands of jobs going overseas at the expense of American workers.” Obama expressed his belief that this will help the economy as a whole, stating “here’s the kicker: We created a lot of millionaires, too. The economy, when you look back on American history, always works best when the middle class is doing well.”
Hillary Clinton on Taxes
Clinton stands behind her party’s views on raising and lowering taxes. During her election campaign in 2008 Clinton stated, “I will let the taxes on people making more than $250,000 a year go back to the rates that they were paying in the 1990s.” When asked if this statement would hold true even in a weak economy, she answered, “Yes. And here’s why: #1, I do not believe that it will detrimentally affect the economy by doing that. We used that tool during the 1990s to very good effect and I think we can do so again I am absolutely committed to not raising a single tax on middle class Americans, people making less than $250,000 a year. In fact, I have a very specific plan of $100 billion in tax cuts.” Clinton has also stated that she would not increase taxes on the middle class in any way, shape, or form.
- Democrats Keep Tax-Raising Focus on Top 2% of Households – Bloomberg Business
- Democratic Party on Tax Reform – On The Issues
- Hillary Clinton on Tax Reform – On The Issues
- Hillary Clinton’s Position on Taxes and the Middle Class – About.com
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