The summer before the 2012 DNC in Charlotte, the Democratic Party platform was released with points under the categories of Moving America Forward, America works when everyone plays by the same rules, Greater Together, and Stronger in the world.
Under the category of Moving America Forward and rebuilding middle class security, point 3 is cutting waste, reducing the deficit, and asking all to pay their fair share. According to Democrats.org the following is in the explanation of this point.
“We are committed to defeating efforts that would return us to the failed economic policies of the past, in which tax relief for the wealthy explodes the deficit and asks the middle class to shoulder that burden. To help spur economic growth, President Obama and the Democratic Party cut taxes for every working family, providing $3,600 in tax relief to the typical family over the President's first term in office, and we are committed to extending the middle class tax cuts for the 98 percent of American families who make less than $250,000 a year, and we will not raise taxes on them. The President has asked for the wealthiest taxpayers to pay their fair share.”
In addition to point 3 under Moving America Forward, point 2 is The Middle Class Bargain. Within this point are the topics of middle class tax cuts, health care, stabilizing the housing market, Social Security and Medicare, and an economy that out-educates the world and offers greater access to higher education and technical training.
In the Middle Class Bargain details presented by Democrats.org the following statements were presented. On the topic of taxes, “Now he's fighting to stop middle class families and those aspiring to join the middle class from seeing their taxes go up and to extend key tax relief for working families and those paying for college, while asking the wealthiest and corporations to pay their fair share.” On the topic of Social Security, “During their working years, Americans contribute to Social Security in exchange for a promise that they will receive an income in retirement. We reject approaches that insist that cutting benefits is the only answer.” On the topic of Medicare, “Democrats believe that Medicare is a sacred compact with our seniors. Nearly 50 million older Americans and Americans with disabilities rely on Medicare each year. We will build on reforms, not eliminate Medicare's guarantees.”
In a vote late Tuesday, the house voted on a deal that would avert the fiscal cliff. Many of the points negotiated in the deal were large points that the President presented in the section of Moving America Forward in the Democratic Party platform.
Included in this deal are tax cuts for individuals earning less than $400,000 a year and couples earning less than $450,000. While this does follow the tax themes presented in the category of Moving America Forward, it’s not at the income level of $250,000 that was presented, although in the deal there are some deduction caps for individuals making over $250,000.
In the topic of asking the wealthiest to pay their fair share, it has been started in the deal by raising taxes a little more than 4%, from 35% to 39.6%, on the income levels above the $400k/$450k. In keeping with the platform detail of having the wealthy pay their fair share, estate taxes have been raised to a top rate of 40% up from 35% on the first $5 million, and capital gains and dividend income would increase from 15% to 20%.
Another platform point under the category of Moving America Forward under Putting Americans Back to Work, said it wanted to continue to fight for relief for the long-term unemployed. In the deal instead of an automatic cut that would have taken effect this week, there is an extension on unemployment.
A specific section in the platform is dedicated to keeping Medicare strong. The fiscal cliff deal blocks a 27% cut in Medicare payments to doctors for one year.
Even with all of the platform points that talk about strengthening the middle class, this deal did not address the increase in payroll taxes, which funds Social Security. Starting January 1st a 2% tax increase took effect on the first $113,700 in wages. This wasn’t so much of an increase as it was a return back from 4.2% to 6.2% from its temporary cut that has been in effect for the last two years. By the temporary cut expiring, there will be additional funding collected for Social Security and the platform point of not making cuts to benefits has been reinforced. According to Census Bureau figures, the median US household income in 2011 was $50,054. This means that the average American household is going to lose roughly $83 a month out of their check, regardless of what was negotiated about other tax issues in the fiscal cliff deal.
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