D.M.C. FAQ
PROPOSAL: The (soon to be) newly elected Democratic majority congress along with a like-minded Democratic President need to provide meaningful and permanent economic relief, promised during the campaign, to the working middle class families by raising the household standard deduction (married filing jointly) of the Federal Income Tax to the median household income.
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For simpicity the details of this proposal has been arranged in Q&A format:
Why change the income tax?
Our country faces a host of complex problems among them global warming, poverty, teen pregancy, war, gang violence. But none of these problems can be solved by simply ammending a single number in an existing law. With gas and food prices soaring in this country, the working man needs real help now! Democrat politicians have long promised tax the rich and protect the working man, the shift of power this election will allow them to finally deliver on that promise.
Why change the standard deduction?
According to the US Government Printing Office, The text of “Title 26 of the United States Code” (Federal Tax Code) was 16,845 pages long in 2006. (gpo.gov) Every time politicians attempt to “fix” the tax code it grows longer and longer - adding more and more loopholes for the rich, big corporations, and special interest groups to slip through while working stiffs like you and I can’t even file our own taxes any more. It used be that paying taxes involved a single page 1040 form, a pencil and a calculator. Then it took a $30-50 software package to figure out your taxes. Those that are self employed (common for subcontractors and an increasing number of other industries) often pay an accountant $1000+ to navigate the complexities of small business deductions, payroll taxes, licensing fees, quarterly withholding payments, and random excise taxes - tax complexities for all self employed even those well below the median income level.
A change to the standard deduction is simple - so everyone knows exactly how much they were helped by the change. This simplicity also means that the middle class voters will know IF the politicians actually did what they promised. No more political news conferences about how much the working man has been helped while our taxes get worse each April 15th.
What is the standard deduction currently?
The standard deduction for a married filing jointly (household unit) in 2007 was $10,700. In 2008 this will raise to $10,900. Which means if you make $11k as a household, the government considers you a high income generator. (hrblock.com)
Why the median household income level?
It is difficult to define the rich - especially in a way that will still be true a generation from now. The census gathers economic data every 10 years and establishes the median American income. The median is the point at which exactly 50% of American households is above and below that line. While defining the rich may be difficult - it is hard to argue that the bottom half of the country in income is not lower and middle-class America. And because this number is established through proven data gathering method’s it establishes a “fair” number that will adjust over time and be just as good a number in 10 years or 50 years as it is today.
What is the median household income?
In 2006, the median annual household income was $48,201.00 (census.gov)
What is the poverty threshold for comparison?
The poverty level varies widely based on the size of the family unit and the age of the members of the family unity. In 2007, the poverty threshold ranged from $9,994 to $46,143. (census.gov)
Shouldn’t the middle class pay taxes?
Yes and they do! Harding working blue collar Americans pay lots of taxes. They pay sales taxes, payroll taxes, property taxes, wheel taxes, emission taxes, liquor taxes, gas taxes, tabbacoo taxes, toll road taxes, excise taxes, license taxes, permit taxes… and more!
Payroll taxes alone take 7.65% of the working man’s pay check before it gets handed to him and combine that with as much as another 10% sales tax at the cash register. Which means for every $1000 earned, a worker only gets to spend $831.15 and that’s just these two taxes!
What we object to is taxing the INCOME of lower income people for no other reason than their INCOME. Sure taxing the rich because of their income makes sense - they can afford it. But telling a family that makes $23,000/yr working two minimum wage jobs that they’re income is high enough to justify taxing it?!?! Shouldn’t we be helping such a family afford $4 gas? Robin Hood didn’t help the poor by stealing from the poor.
What about individuals or couples that don’t file their taxes as married filing jointly?
First of all, it should be noted that it speaks volumes about our convoluted tax code that the taxes paid can vary greatly if a couple files separately or together. The D.M.C. supports the proportional increase of all the standard deductions. The married filing jointly deduction was selected due to its parallel to the commonly available median household income census data. (see why the median household income)
How does this help the IRS?
Imagine if you will an updated 1040-EZ form. Line 1: list your income. Line 2: is your income less than $48,201? Line 3: if yes sign and return your form. if no go please use an accountant or tax software.
This is a funny example but seriously, this would cut the tax forms the IRS had to check in half. Which means the IRS would need fewer agents (cost savings we could use elsewhere in government) and/or more time can be spent checking the rich’s tax forms for cheaters!
Why now?
As the November election approaches all indications are that it will be a landslide victory for Democrats. Experts predict the Democrats will obtain a super majority in the Senate (60+ seats), gains in the house and, of course, a historic first, as President! With gas and food prices soaring in this country, the working man needs real help now! Democrat politicians have long promised to tax the rich and protect the working man, the shift of power this election will allow them to finally deliver on that promise.
What is the D.M.C.?
The Democrats for the Middle Class is a nonprofit organization that was founded to bring real economic assistance to hard-working Americans. No one time stimulus packages that are a simple band aid. No complex, buffered, tri-level tax credit solution that requires a CPA to even know if you’re getting any real benefit. A simple solution to reduce the tax burden for blue collar workers both for the economic relief and the moral victory. Sorry to all the fat cats out there and their government lackeys - but we feel taxing low income families on the basis that their income is too high is flat wrong.