Upper-class Warfare

[TulsaRufnex]

David Frum: Upper-Class Warfare
by David Frum Oct 8, 2012 5:05 PM EDT
How Romney would screw the ordinary rich.

http://www.thedailybeast.com/newsweek/2012/10/07/david-frum-on-how-romney-would-screw-the-ordinary-rich.html

Romney adviser Martin Feldstein, one of America's most distinguished tax economists, recently crunched the numbers of the Romney tax plan in The Wall Street Journal. Against those who claim that Romney's tax plan is arithmetically impossible, Feldstein argues it could be done. All it would take is a 30 percent -reduction in the tax deductions available to everybody reporting taxable income of more than $100,000.

In other words, a big tax cut of greatest value to those earning more than $500,000 a year (the people who pay the top rate on the majority of their income) will be offset by a tax increase that will fall most heavily on those who earn between $100,000 and $300,000 of taxable income.

People in the $100,000–$300,000 group are likely to think of themselves as "middle class." They're wrong about that: $100,000 of adjusted gross income puts you into the top 20 percent of taxpayers; at $300,000, you are richer than 98 percent of your fellow Americans. You might call people in the $100,000–$300,000 range the "lower upper class."

When Mitt Romney talks of capping itemized deductions at $17,000 to finance a cut in the top rate of federal income tax to 28 percent, he is talking about paying for a tax cut for the Porsche customer with a tax increase on the Porsche salesman. Both may be "rich" from the point of view of the typical American worker. But they are not rich in anything like the same way.

[nathanm]

Feldstein has been proven wrong, by the way. Unless Romney really intends to have one's tax bill jump very dramatically between $99,999 of income and $100,000 of income, that is.