President Obama wants to
raise taxes on the “millionaires and billionaires” he railed against in his
campaign. So he targets those people who
earn more than $200,000 a year in the income-tax revamp he proposes, thereby
conflating those “fat cats” with the millionaires and billionaires of his
wrath. A lot of people in New York City
and Los Angeles (ironically, two of the bluest cities in America) must be
wondering what their idol is smoking.
If you are a single filer in
New York who is earning $200,000 a year, you probably don’t feel like a fat
cat. After paying State, City, and
Federal taxes, there’s not much left.
$200,000 may be a comfortable wage in Wyoming, but it almost qualifies
you for food stamps in Manhattan. (Hey, here’s
an idea that some legislators could embrace: Make income tax rates depend on
where you live.)
There’s another problem: Once inflation starts to roll, $200,000 will
not seem like so much. In fact, the median income could quickly rise to six
figures, and the tax meant to nail fat cats (like the Alternative Minimum Tax)
will start hitting Joe Six-Pack.
Attempts to avoid the “fiscal
cliff” may force Obama to swallow a higher break point – say $500,000. New York legislators, worried that legions of
executives will flee the Big Apple, may join Republicans in pleading the case
for the $200,000 billionaires. After
all, New York is Obama country. In
Wyoming, he got only 28 percent of the vote.
