I just got a huge raise! It turns out I'm making $250,000 a year! So are you! Woo hoo!

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
  - Presidential candidate Barack Obama, 9/12/08


"If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime.”
  - President Barack Obama, addressing a joint session of Congress 2/24/09

When Barack Obama was running for President, I was extremely excited, because I thought that he represented something new: a politician who was pragmatic but idealistic, who would create consensus solutions, who would restore the constitutional powers for each branch of government and end the excesses and crimes of the previous administration.

He was honest; he would keep the promises he made and keep taxes at their current levels. After all, he made a far stronger statement than, "Read my lips. No new taxes."

Starting January 1, 2011, however, taxes will increase significantly. Since I am not fond of admitting that I am wrong or that the candidate that I supported (with my checkbook, my feet, and my vote) is breaking a firm pledge (without, to my knowledge, even admitting that he's doing so), I have decided that I must have gotten a raise. I now make more than $250,000, because my taxes are increasing quite a lot in about six months. I wish that the $250,001 salary were printed on my paycheck as $250,001, because the number that's printed is a fraction of that, and I'm not bringing anywhere close to the correct amount home, so the payroll department has some serious explaining to do.

Here are some of the tax increases and how they will impact me, personally (They come from a list of expiring federal tax provisions: http://www.jct.gov/publications.html?func=startdown&id=3646 .)

I'm not sure which tax bracket I'm in, but tax rates are increasing for every taxpayer, so I'm covered wherever I land:
- The rate for today's 10% bracket increases to 15% next year
- 25% increases to 28%
- 28% increases to 31%
- 33% increases to 36%
- 35% increases to 39.6%

In other words, everybody gets a raise! Two hundred fifty thousand dollars for every American! Talk about providing a living wage!

Some more new taxes:

From what I understand, a lot of small businesses in the 35% bracket will see an increase to 39.6%, which is just great for businesse…Wait…Um, no, I don't think that's true, actually, so I'm not going to finish that...um... Oh well, a little more unemployment won't hurt anybody, right?

The child tax credit cuts in half, from $1,000 to $500 per child. I have eight children, so that's $4,000 in additional taxes that I'll be paying next year. I love how I make so much more than $250,000 per year that I get to pay an extra $4,000 on top of the additional tax I'll be paying from my marginal rate increase.

Remember the marriage penalty tax? That's back. Sweet. Maybe my wife and I should have just cohabited for the rest of our lives. It would have been cheaper.

My Flexible Spending Account maxes out at $2,500 starting in January, and I can't buy over-the-counter drugs with it anymore. I guess I'll be spending more money on healthcare on top of my extra income taxes. My employer isn't giving me any auxiliary healthcare spending account money anymore either (another tax-code-driven change for next year). All in all, that's another few thousand I won't be getting anymore. Oh well, austerity breeds character! My daughter's dentist is probably just jawing when she talks about how we need to get her braces pretty soon, so I'm not going to worry about not being able to do that. What's really nice about these additional costs is how, in the long run, they'll be offset by more expensive health insurance with fewer benefits. Um, no, wait. That's not what offset means, is it?

If I stand to inherit any money after 2010, it might be taxed at a pretty high rate, maybe as high as 55%. That's not too likely though, so I won't worry about it. Yeah, it's not my problem.

Anyway, who can actually save enough after taxes to amass enough of a fortune to pay 55% to the government before the estate is split up and distributed? A million dollars is a lot of money! All that that shows is that we weren't taxing them enough to begin with. Right? Who's with me? It takes hard work to save and invest a million dollars! They could have been helping their fellow man with that money instead of hoarding it (Sure, call it getting returns back from investments; whatever-- it's hoarding). Let's give at least half back to society before we split it up between the ten or twenty descendants in the will. If you give them more than, what $25,000 a piece, that's pretty much like making tons of new Vanderbilt fortunes. Split it up! That's the American thing to...um... Hang on a sec, I'm having a hard time finishing that thought. It doesn't seem quite right. I may need to edit this section later.

Here's another one: Earned Income Credit doesn't affect me, but EIC payouts are being cut. And the ceiling for married people in the 10% bracket is doubling (and by 10%, I mean the new 15% bracket, of course). Since we'll all be making over $250,000, however, poverty will be a thing of the past, so it's not like the President is screwing poor people or anything. Seriously, Barack Obama is doing more to ameliorate poverty than anybody since Bobby Kennedy!

On the other side of the income spectrum, the Alternative Minimum Tax is going to catch more people (28 million families, compared to 4 million this year); it was originally created in 1969 to catch 155 families who had high incomes but weren't paying much income tax, but the dollar cut-off is not indexed for inflation, so a very large number of households pay according to its structure, which is higher than regular income tax.

Now, if I had enough extra money to invest anywhere, I'd be screwed by higher capital gains taxes (increasing from 15% to 20%) and dividend tax (from 15% to 39.6%). Guess I won't waste my money investing in anything beyond my 401(K). From what I understand, the market is doing so well that it will be just fine if a lot of people stop investing or invest less, so that's cool. No worries.

Thanks for keeping such an important pledge, Mr. President! Between this, health care, the way that we've been treating Israel for the last two years (It's about time somebody put them in their place), and your masterful handling of the oil spill, you have secured my continued support*.

Sincerely, etc
GG

*This sentence assumes that Barack Obama is the only candidate in the 2012 election, that I am legally compelled to vote, and that there is only one check box on the form.