The Senate democrats pass a bill today that would extend the Bush Tax cuts for those earning less than $250,000 by a vote of 52-48.
The vote would remove the tax cuts for those earning over that income level, that expires on December 31, 2012, in a mere matter of months. If the Democrats still maintained a majority voting body the bill would have passed and all the debating would be over.
However, it maybe a political stunt, which significantly will impact the majority of Americans if Republicans win a majority in either house again it will be a major stalemate for another four years until 2016.
The two democrats Joe Lieberman, and Jim Webb both an Independent and a Democrat respectively, voted against the bill. Two Republicans Senator Scott Brown (Mass Republican) and Susan Collins (Republican ME) crossed the isle and voted with Democrats, while Democrat Mark Prior of Arkansas voted with the Republicans.
Well now we know where each party stands as far as tax cuts for the rich and a tax break for the middle class. The Republicans actually dropped their usual filibuster to allow the bill to either pass or fail on a majority vote, and it passed by a slim majority.
Both parties are playing chicken with going over the cliff with the end of the Bush tax cuts which will raise payroll taxes.
The bill will of course be turned down when it goes to the House which is held by republicans in the majority, but the move will illustrate who is for the middle class and who is for the wealthy class. Now the Democrats have a good argument against the Republicans in the November election that republicans would not pass or vote for a tax break for the middle class.
The White House issued a statement: “All sides agree on the need to extend the tax cuts for the middle class”, “This legislation reflects the consensus and should not be held hostage while debating the merits of another tax cut for the wealthy”.
The entire problem, arose with the raising of the debt ceiling, and a Super Committee that failed to reach an agreement. Last year at this time, the full faith and credit of the United States was put at risk and caused the subsequent drop in the credit rating for the first time in history by credit agencies.
The tax breaks given to the wealthy, through loopholes that people like Mitt Romney take full advantage of has reported to be worth 32 Trillion dollars hidden from Uncle Sam as reported in a Forbes article.
A group known as the Tax Justice Network concluded that the billionaires and wealthy are hiding 32 Trillion Dollars in offshore accounts held by 92,000 individuals who are not paying their fair share of taxes.
Similar to Mitt Romney, these elite individuals hire, tax lawyers, tax accountants and with the help of banks, avoid paying taxes on their income. It has become a painful class warfare between the 1 percent rich v.s. the 99% who make up the shortfall by getting hit with higher taxes year after year, while the wealthy earn higher returns on their 32 trillion offshore.
Tax Reforms are Needed
One major plan of attack is to establish that if a wealthy billionaire has a residence in the US even a mailbox number, has US earnings but banks offshore, they must pay US taxes, no if’s ands or buts about it. Closing the loopholes may drive some Americans to live abroad permanently including famous celebrities who rake in millions each year.
The residency claims can be verified, if they own just one home within the continental USA, financial accounts can be tracked down within the US banking system to tax these people. More than 10,000 Americans who earn more than $250,000 a year, in 2007 paid no income tax at all.