WHO IS RIGHT; Comparing the Obama and Romney tax plans?
A couple making $250,000 a year may hardly be able to afford rent in the tonier quarters of San Francisco. But they are among the rich who would pay more under President Obama'srecycled plan to roll back the one part of the Bush tax cuts that Democrats don't like.
They, and people earning more, are the only difference between Obama and Republican rivalMitt Romney when it comes to extending the Bush tax cuts, enacted in 2001 and 2003 to dispose of a budget surplus and boost the economy. Republican leaders want to extend the cuts to earners of all income levels. The tax cuts expire at the end of the year unless Congress acts.
House Minority Leader Nancy Pelosi, D-San Francisco, had proposed raising taxes only on households earning more than $1 million, which is the definition of rich in the Bay Area and closer to Romney's position. When Obama announced his plan Monday, Pelosi fell in line behind the White House.
"Democrats and the president have always fought for an extension of the tax cuts for middle-income families to offer greater relief and economic certainty to all working Americans," Pelosi said.
About 27,000 San Franciscans earn more than $200,000, according to the state Franchise Tax Board's 2009 data, the latest available. That's the income threshold Obama would apply to single-earner households; for couples, it's $250,000.
That means 3.3 percent of San Francisco's population of about 811,000 would pay more. Tax rates would rise from 33 percent to 36 percent for those earning up to $388,350, and from 35 percent to 39.6 percent for those earning more.
In Santa Clara County, more than 65,000 people met the $200,000 cutoff in 2009, about 3.6 percent of the county's 1.8 million people.
By comparison, in Fresno County, about 6,000 people out of 943,000, or 0.63 percent, earned $200,000 or more. Statewide, about 2.3 percent of Californians would pay more under the Obama plan, according to Citizens for Tax Justice, a Washington think tank focusing on taxes for middle- and low-income families,
Little impact on deficit
But even if this sliver of the population winds up paying more, it will only skim the top of the Bush tax cuts, and the deficit will still greatly increase.
"The debate has a very high importance politically, but it's only one-fifth of those tax cuts," said Donald Marron, director of the nonpartisan Tax Policy Center, a joint project of theBrookings Institution and the Urban Institute.
Despite the fight in Washington, the parties agree on 80 percent of the Bush-era cuts. "Everybody except maybe me wants to extend most of the Bush tax cuts," said Bob McIntyre, director of Citizens for Tax Justice.
Democrats, repeating arguments of the last four years, say the rich should pay more. Republicans say that would raise taxes on small businesses. While many high-income earners receive business income, few small-business owners reach the top income brackets.
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