Earlier today, I caught the Fox Business Channel discussing the Bush tax cuts and the prospect of higher rates for the rich. One of the anchors made the statement that the vast majority of the wealthy families impacted by Obama's gambit wouldn't be billionaires or millionaires, but regular folks making between $250,000 and $500,000 a year.
If I'd been in the studio, I would have made two points.
First, $300,000 a year might not sound like much to some people watching or owning the Fox Business Channel, but it is really quite a lot of money. It means you make more money than 98 percent of the families in the richest country on earth. If you choose to live in a city where $300,000 doesn't go as far as it sounds like it should -- like Manhattan or the suburbs of Chicago -- that is your God-given and Constitution-protected right. But going ahead and spending $300,000 a year, or otherwise feeling poor around your neighbors, isn't the same as scraping by.
Second, and more importantly, the Obama tax increases won't have an enormous impact on the $250K-$500K crowd, because at least half of their money will be taxed at the same rate it is today. On average, these families will pay about $400 more under the Democratic plan in 2011. Check out this graph, from the Post:
I would support a full extension of the Bush tax cuts for two years or so, because two years of tax cuts for the rich won't deprive Treasury of much money. But it's hard for me to get worked up about a $400 tax increase killing the economy.