Income and Federal Tax Debate in D.C.

As many Americans are aware, we have been facing a stand-off and massive challenge with regards to how we are taxed on our income, investments, capital gains, etc. The below blog has been established from information from the Newsweek article entitled 'The Problem with Obama's Tax Math', written by Daniel Stone.

I feel that this article in Newsweek (more specifically on www.thedailybeast.com) is an important read at this moment in time, as each one of us will be facing higher taxes next year after the Bush tax plan expires.

The article talks about Obama's desire, and general plans, to overhaul the tax system. Basically, Obama would like to see the top earners and those that are independently wealthy contribute and pay more in both income, capital gains and investment taxes. This method, in effect, would help to balance out the nations budget and help the middle class gain some financial strength and upward mobility. This in turn, Obama believes, will help bolster the entire US economy and put us on the road to recover.

This plan, however, is flawed, in that the top income earners already do pay the highest taxes of any Americans. Obama neglects to differentiate between earned income and investment income. Currently, investment and capital gains incomes are taxed at a significantly lower rate than other types of income. This in turn is why the wealthy in the US seem to be paying much lower taxes. Most truly wealth Americans have capital gains and investment income, thusly it appears that the wealthy don't pay high taxes. It is, in fact, the low income earners who are taxed the lowest for their income (at a level of approximately 5.7%).

It would appear to the casual observer that our tax system/tax code is due for a complete and major overhaul in order to tax income and investments at appropriate levels. Obama feels that this may be the key to solving the problem, and that part of our current tax code and laws need to be done away with alltogether.

Personally, I chose to blog about this particular article and issue, as a middle class American citizen, because more than likely we will be the ones most greatly affected by the outcome of our current tax war.

Here is the link to the actual article: (I am having a very hard time figuring out how to make a link 'live' or 'embedded' on here. Please bear with me as I slowly come out of the dark ages of computer illiteracy.

http://www.thedailybeast.com/articles/2011/09/20/obama-s-deficit-reduction-tax-math-more-complicated-than-he-s-implied.html

What is your political ideology?

http://www.gotoquiz.com/what_is_your_political_ideology

This is the link I used for the on-line quiz to determine your political ideology.