Bush's Regressive Tax Plan

Again, I could not believe my ears when I heard Bush propose his tax reform plan. He advocates a regressive tax where the middle class and the poor will be penalized for not being able to afford investment income.

Bush stated that he wants to protect investment income from taxes. If all passive income is protected from income tax, the tax burden will shift to those of us who bust our asses for every buck we get.

When that happens, we will be paying a higher percentage of our incomes to taxes than those who sit on their fat lazy asses. Not a good plan.

Look at this plan in a pragmatic light. I earn just over the national median income. I have much more debt than income at this point (thank goodness they cannot repossess my brain, because it's worth almost $100K in debt service payments). My net worth is negative and looks to be negative for at least another decade, thanks to Bush's economic policies.

I do not have the means to invest in my future, beyond the consideration of my debt service as investment. So, if Bush's tax plan is implemented, I will be paying approximately 12% for income tax (this is an estimate, so do not use this number to poke holes in my analysis, you'd be arguing the wrong point).

That disclaimer aside, I would like to look at someone who makes 10 times as much as me, and speculate about where that income comes from. For $300K, suppose that $100K is paid work and $200K comes from investments. Now, a look at a flat tax applied to income from work only: If I pay $3600 on $30K, that's 12%. If my imaginary $300K earner pays $12K (12% on the paycheck), that's 4%. Bush will protect the other $200K from taxes.

At that point, my tax burden becomes three times that of someone who earns ten times as much as I do. This cannot become our reality.