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February 4, 2023

US Gov’t wants to tax the rich in order to help decreasing the deficit

Obama and Merkel say euro crisis needs concerted action.

United States of America’s President, Barak Obama said he planned to increase tax rates on the wealthy, to ensure they “pay their fair share, just like everybody else.” Republicans called Obama’s ideas “class warfare” and suggested that they would hurt the economy by leaving small-business owners with less money to spend, Washington Post informs. Obama said on Monday that raising taxes on the wealthy is not class warfare, it’s math. He calls for USD 1.5 trillion in new revenue as part of a plan to find more than USD 3 trillion in budget savings over a decade.

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data, Chicago Tribune informs. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above USD 1 million yet paid no federal income tax, according to the Internal Revenue Service. That, however, was less than 1 percent of the nearly 237,000 returns with incomes above USD 1 million.

This year, households making more than USD 1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes and payroll taxes, according to the Tax Policy Center, a Washington think tank. Households making between USD 50,000 and USD 75,000 will pay 15 percent of their income in federal taxes.

Lower-income households will pay less. For example, households making between USD 40,000 and USD 50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between USD 20,000 and USD 30,000 will pay 5.7 percent.

Moreover, in a statement late Monday night, the White House said Obama and German Chancellor Angela Merkel agreed that “concerted action” would be needed in the coming months to address the difficult situation in the euro zone, Irish Times informs.

Concerns increased when Italy’s credit rating was cut and so the country’s outlook remains “negative”. Italy has Europe’s second highest debt load. The conversation between Obama and Merkel, which reflects growing global concern about the debacle, came only three days after US treasury secretary Timothy Geithner urged European finance ministers to avert “catastrophe” by stepping up the battle against the debt crisis.

As global leaders gather in New York this week for the United Nations general assembly, Obama is also scheduled to hold talks on the debt debacle and the global economy with French president Nicolas Sarkozy and British Prime Minister David Cameron.

A highly-anticipated teleconference between the EU-IMF “troika” and the Greek government on the release of a crucial EUR 8 billion loan ended inconclusively last night. Further talks were scheduled for last evening.

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