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Increasing taxes on fire fighters, while the rich get richer

A new analysis by an independent think tank confirms what the IAFF has been saying for months:  the tax plan advocated by GOP presidential candidate Mitt Romney would increase taxes on fire fighters and other middle-income Americans.

The study by the Tax Policy Center, a non-partisan research organization founded by the highly-respected Brookings Institution and Urban Institute, found that Romney’s proposal would slash taxes for the wealthiest 5% of Americans but raise taxes for everyone else.

Even when the researchers used Republican economic models that suggest tax cuts will spur economic growth, the result was the same.   Millionaires would get an average tax cut of $87,000, while 95% of the population would see their taxes go up by an average of $500 per year.

Romney’s plan proposes lowering tax rates while eliminating tax deductions and exclusions.  In order to generate sufficient revenue to meet Romney’s revenue target, mortgage interest and employer-provided health benefits would lose their tax exempt status.   Since these tax breaks largely benefit the middle-class, Romney’s plan amounts to increasing taxes on middle-class Americans in order to give huge tax breaks to the super-wealthy.

For fire fighters, taxing health benefits would be especially burdensome because first responders tend to have more expensive health plans.   A fire fighter with a health benefit package costing $20,000 could see their taxes go up by $5,000 a year.

Comments (3) -

  • Jeff Dunn (Loudoun Career)

    8/9/2012 12:25:50 PM |

      I cant belive a tax plan that is going to cut taxes across the board is going to cost me more. Romney's plan is going to extend all the Bush era tax cuts. He is going to repeal the death tax to allow us to pass on what we have earned to our kids tax free. He will repeal all the Obamacare taxes. He will cut taxes 20 percent across the board making the lowest rates between 8 and 12 percent. How will this cost me 2000 dollars? Lower taxes for everyone will help this economy grow and pull us out of this mess Obama has gotten us in.
      I do know that Obama has already caused me to spent more. Health care has gone up, fuel cost are through the roof. This has caused everything we buy to cost more to cover the extra cost of delivering it to the stores. His adminastration has added five trillion dollars to the national debt that our kids and grandkids are going to have to pay. Pretty amazaning when you consider the first 41 presidents took 214 years to build the first five trillion dollars of the debt. The answer is not more taxes on any of us, but less spending by the goverment.
      When is our union going to stop blindly following the democrat party and start questioning some of the lies they tell us. If you want another view of Romney's tax plan go to www.spectator.org and read "No Romney Won't Raise Your Taxes $2000" for yourself.
      I love the brotherhood of my Local, the guys and gals I work with and I'm sure you do too. We need to make our opions know to the union leaders.  

  • The new study that shows how Romney’s plan will raise taxes on the middle-class did not come from a union or partisan source.  In fact, Romney himself cited the non-partisan Tax Policy Center’s impartial research during the primary campaign.

    The reason why lowering rates will cost fire fighters more is fairly simply.  The Romney plan lowers rates but eliminates tax deductions and exclusions, so a larger percentage of income becomes subject to tax.   Think of all the money that you and your employer currently spend on health care and pensions.   Under Romney’s plan, you will be taxed on that money.   Consider a CEO who earns $10 million in salary and has a $20,000 health insurance policy.  Because his health plan represents a small percentage of his total compensation, his total tax bill will plummet since the reduced tax rate will more than offset the increased taxable income.  But a fire fighter earning $50,000 who has the exact same $20,000 health insurance will see their taxes go up since their taxable income will increase by 40%.

    In addition to health insurance and retirement payments that will become taxable income, many tax deductions used by fire fighters to lower their tax bill would  be eliminated under Romney’s plan, including Mortgage Interest, State and Local Taxes, and Charitable Contributions (including contributions to churches).

    Look at it another way:  Romney has promised that his tax plan will be “revenue neutral.”  That means that even though the rates will be lower, the total amount of taxes the federal government collects will stay the same.   Clearly, the wealthy will receive huge cuts, so where will the extra money come from?  The middle-class, of course.  (And please, don’t cite information from the American Spectator web site, which is a partisan source that promotes Governor Romney, that lower rates magically increasing productivity.  That has been disproven so many times that it is no longer a credible argument.  ).

    It’s interesting that the commenter suggests the IAFF is following a party line, but he suggests getting information from spectator.org, which even admits that it is a site for conservative thought.   While there may legitimate arguments in favor of Romney’s tax plan, no impartial analysis can claim that middle-class workers won’t wind up paying a lot more in taxes.

  • Jeff Dunn (Loudoun Career)

    8/12/2012 9:15:01 PM |

    I do believe the IAFF is following a party line. I did say for another view to look at the American Spectator story. I believe we should be able to read both sides and decide what we think will work.  I am not trying to hide the fact I believe the president is doing a poor job or that I am going to vote for Mitt Romney.  I know the IAFF has endorsed some Republicans for congress, but I'm not sure when they last endorsed one for president.
    The tax plan Romney has will be good for our country and will help spur growth that we have not seen under our current president. Lower taxes do increase revenue to the government. It happened in 1920, 1960, and 1980 when marginal tax rates were cut by presidents Coolidge, Kennedy, and Reagan. So I do believe its a credible argument. Its not the governments money it ours.  
      The president wants taxes to go up on people earning more than 250,000.00 a year. This includes many small business. Small business is what runs our country and tax increases will only serve to harm them. We have seen 45 months of unemployment over eight percent under this president. He promised to cut the budget deficit in half by the end of his first term. It didn't happen. In fact he added to deficit spending and ran up our debt.
      I just want members of the union to look at both sides and decide for themselves. This is the greatest country in the history of the world and I am proud to serve my community as a firefighter. I believe in being able to voice differing opinions. I also believe that our government has grown to large and is taking more of our freedoms everyday. I urge all the members to read our US Constitution and Declaration of Independence.  Its our government and our union, lets tell them what we want.  

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