McLaughlin Assignment 9 DUE 11/17/10
Based on our discussions in class and the resources listed, respond to the following questions in no less than 150 words:
A critical issue must be decided by the US Congress before the end of the year: what to do about the Bush era tax cuts. In 2000, President Bush lowered the Federal income tax brackets to the levels indicated below. These tax rates were renewed in Bush’s second term and are set to expire December 31 of this year. Without any changes the brackets will go up to the levels indicated below. Basically, Congress faces one of three options: 1) Extend the tax cuts for all brackets; 2) Extend the tax cuts for certain brackets; or 3) End the tax cuts for all brackets.
President Obama has stated his intention was to increase only the last two brackets (33% and 35%) and leave the other brackets at the Bush Era levels. http://ac360.blogs.cnn.com/2010/11/12/obama-says-hes-not-caving-on-tax-cuts/?iref=allsearch
| Income Bracket (Single) | Current Tax Rate | New Tax Rate | % of Total Taxpayers in Bracket (as of 2008) |
| $0-$8,375 | 10% | 15% | 25% |
| $8,376-$34,000 | 15% | 15% | 46% |
| $34,001-$82,400 | 25% | 28% | 22% |
| $82,401-$171,850 | 28% | 31% | 4% |
| $171,851-$373,650 | 33% | 36% | 2% |
| $373,651+ | 35% | 36.7% | 1% |
Read the follow article (a great guide to the tax cut debate):
http://www.brookings.edu/opinions/2010/0914_bush_tax_cuts_gale_harris.aspx
If you were a senator or representative in Congress, what would you do about the Bush Tax Cuts? Would you extend them all? Would you extend some but not others? Would you extend none of them? Why? How would you defend your position to angry voters whose taxes you may be raising?