Avoiding the Fiscal Cliff
It is hell to be poor.
During this election season, much debate centers on whether or not the wealthiest Americans should pay more taxes to shore up our deficit. But nearly all Americans face an imminent federal tax increase as a result of the upcoming expiration of tax cuts implemented by former President George W. Bush and the expiration of President Barack Obama’s payroll tax holiday.
According to the nonpartisan Tax Policy Center, if Congress does permit a federal tax increase, “taxes would go up by a collective $536 billion next year or about $3,500 per household, reducing after-tax income by about 6.2 percent.”
Such a federal tax increase would range from a loss of $412 worth of annual income for the lowest wage-earners to $120,000 for the wealthiest Americans, according to the Washington Post.
The study also shows that middle-class earners ($40,000-$60,000 per year) would see a reduction in income of approximately $2,000 per year.
No matter what one’s socioeconomic status is, very few if any, Americans can lose that type of income, especially lower to middle-class Americans who bust their behinds daily just to make ends meet and put food in their children’s stomachs.
Often, we hear politicians, on the left and the right, emphasize how Americans would have more money to spend if they paid fewer taxes, which would consequently improve the economy and create more jobs.
While this is true, not keeping taxes low for all Americans and taking more money out of their paychecks could mean the difference between eating and not eating.
Many politicians on the right believe that those at the bottom of the socioeconomic totem pole are there because they want to be there and they do not have the desire to make a better life for themselves and their offspring.
However, anyone who has ever lived at the bottom would probably not want to be there very long.
Taking an extra $412 out of their pockets because of a new federal tax increase could be the difference between being able to pay the rent on their apartment that month and having to take their children to a homeless shelter until their next paycheck.
Less money in their bank account because of a federal tax increase could mean the difference between them taking that final three hour college course that they need to finish their undergraduate college degree and them giving up on life and their future. The federal tax increase would ultimately lower the college tuition tax credit from $2,500 to $1,800, according to the Washington Post.
American college students have a hard enough time obtaining white-collar jobs after finishing their degree. America does not need to make it more difficult for those young Americans to enter the middle-class or even possibly the upper-class.
Furthermore, avoiding the fiscal cliff (“the precipice of tax hikes and spending cuts” according to the Washington Post) would benefit all Americans because upper-class business owners might be more inclined to add jobs for those less fortunate than them financially if they had an extra $120,000 in their wallet every year.
Unfortunately, we are in dire straits economically in this country and taking more money out of people’s pockets is not the answer to solve our fiscal woes.
For the wealthy it may only make heaven somewhat less of a paradise, but for the poor and middle-class it can eventually make life a miserable hell.
Smith is publisher of Regal Magazine, a publication dedicated to the African American community.