TurboTax Tim Geithner gave mixed message on today’s Sunday morning shows, on one hand he said that that he wants to increase taxes upper income Americans, on the other he said he wants private enterprises to increase their investment in business. In other words, he wants to take away more of investors money, then he wants them to invest more in business so they can pay more taxes.
Treasury Secretary Timothy Geithner said the economy has now recovered sufficiently for government to begin to make way for private business investment.
Mr. Geithner’s comments on Sunday, which echo previous sentiments expressed by President Barack Obama, reflect a turning point in the government response to the worst economic downturn since the Great Depression, a period marked by deep federal intervention in the financial, housing, auto and other industries.
“We need to make that transition now to a recovery led by private investment,” Mr. Geithner said Sunday on NBC’s “Meet the Press.”
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“I think the most likely thing is you’ll see an economy that gradually strengthens over the next year or two, you’ll see job growth start to come back, investments expanding … but we’ve got a long way to go still,” Mr. Geithner said.
The Treasury secretary predicted that the Obama administration’s plan to allow Bush-era tax cuts for the richest Americans to expire at year’s end wouldn’t stall the economic recovery. Mr. Obama has expressed desire to keep the tax cuts in place for individuals making less than $200,000 a year and families making less than $250,000.
“I do not believe it will have a negative effect on growth,” Mr. Geithner said of the tax plan, which would require congressional approval.
TurboTax believes that increasing the tax burden of the already over-taxed upper income group will not slow down the economy even more?
After the Bush tax cuts were implemented the New York Times reported that the average family in America with an income of $10 million or more received a half-million-dollar tax cut, while the middle class got “crumbs” (less than $100 shaved off their tax bill). But that doesn’t tell the real story
But Americans did respond to the tax cuts. There was more investment, more hiring by businesses, and a stronger stock market. When we compare the taxes paid under the old system with those paid after the Bush tax cuts, the rich are now actually paying a higher proportion of income taxes. The latest IRS data show an increase of more than $100 billion in tax payments from the wealthy by 2005 alone. The number of tax filers who claimed taxable income of more than $1 million increased from approximately 180,000 in 2003 to over 300,000 in 2005. The total taxes paid by these millionaire households rose by about 80 percent in two years, from $132 billion to $236 billion.
If you look at the chart below compiled with post tax cut 2005 numbers from the Treasury Department, the top 1% of taxpayers pay almost twice their fair share of taxes, representing only 21.2% of income but 39.4% of taxes. In fact the top 5% of tax payers are supplementing the income of the bottom 90% (the 6-10% group are paying about their fair share)
|Share of Individual Income Taxes and Income 2005|
|% of Tax Payers||Share of Individual Income||Share of Taxes Paid||% Fair Share|
|Source: U.S. Department of Treasury, Office of Tax Analysis.|
This of course is only income tax burden, the progressives intend on expanding the tax burden of upper incomes through Obamacare, capital gains and of course the estate tax. Turbo Tax wants the people with money to invest in business, but with the present environment created by Geithner and his boss President Obama, why bother? They are more likely to desire a place to hide their money than search for a place to invest it.