I didn't know that the wealthy benefitted from job search help and a rebate to middle class families. Even not considering that, Republicans feel that by helping those who are creating the jobs, we help those who then get the jobs. I have never seen a proposal from the right that only cuts taxes for the rich. Usually the lower income brackets receive a higher cut as a percentage of their income. The problem is that if you cut the top 20%'s taxes by 1% and the bottom 50%'s taxes by 20%, the Dems trot out the gross numbers and say that a much larger amount went to the wealthy. Guess what, they make more money, so a small percentage of that money is more than a large percentage of a poor persons income. Democrats don't like it when you tell them that the wealthy few are the ones who are bearing most of the tax burden though.
I didn't know that the wealthy benefitted from job search help and a rebate to middle class families. I didn't know that Democrats criticized those moves either. Of course, that Job Search help costs $3.6 billion. The dividend change costs $600 billion. Comparable. I have never seen a proposal from the right that only cuts taxes for the rich. Usually the lower income brackets receive a higher cut as a percentage of their income. Bush's tax cut plan did no such thing. I believe it cuts everyone's rate about equally in percentage terms (that would be the "fair" thing, right?). Of course, since the lower income classes also have the SS income tax burden, their relative percentage of the tax burden rises. Simplified, here's an example of what will happen by the time the tax cuts are fully implemented: Tax #1: Everyone pays a 5% on your first $50,000 (SS Tax) Tax #2: Everyone pays 10% on their first $50,000; 20% above that (Income Tax) The tax cut reduces tax #2 to 7.5% and 15% respectively. (a 25% reduction on each rate) Person #1 making $20,000 a year used to pay $3000 in taxes(15%). Now pays $2500 (12.5%) Person #2 making $50,000 a year used to pay $7500 in taxes (15%). Now pays $6250 (12.5%) Person #3 making $100,000 a year used to pay $17,500 (17.5%). Now pays $13,750 (13.75%) Person #4 making $1,000,000 a year used to pay $197,500 (19.75%). Now pays $148,750 (14.88%) Person #1 got a net tax rate reduction of 16.7%. Person #2 got a net tax rate reduction of 16.7%. Person #3 got a net tax rate reduction of 21.4% Person #4 got a net tax rate reduction of 24.7%. The rich get a bigger actual and percentage cut in their relative tax rates even though the income tax was cut by 25% across the board for everyone. The end result is that the poor pays a larger portion of the tax burden.
Anyone know why the unemployment plan (a good idea, I think) is targetted for only 1.2 million people? That's roughly 10% of unemployed Americans, I think. With the savings from the dividend plan, couldn't we at least target half of the unemployed folks? What am I missing? Again, I love the idea!
By the way, here are the current and "final" tax rates at the end of the Bush Tax Cut. You tell me who benefits the most: 10% bracket goes to 10% (0% cut) 15% bracket goes to 15% (0% cut) 27% bracket goes to 25% (7.4% cut) 30% bracket goes to 28% (6.6% cut) 35% bracket goes to 33% (5.7% cut) 38.6% bracket goes to 35% (9.3% cut) That's ignoring the SS Taxes on lower-income brackets that also get a 0% cut.
Major, I am all for allowing people to opt out of social security. Of course those for whom it is a burden are also those whom it benefits. There really isn't a reason to bring Social Security into it. Might as well add property tax, luxury taxes, gas taxes (many expensive cars have horrible gas mileage), etc. If we look only at income tax, I have never seen any prroposal for a regressive tax, the worst you are going to get from anyone is a flat tax. I don't think you need to worry about losing the progressive nature of our tax structure. Even counting the Social Security "tax" you can see that the new tax structure still has higher income people paying at a higher rate. Did the 10% and 15% brackets get no cut, or did they already get cut to that level? I would like everyone to receive a cut, biut havve no problem with the lower people going first.
I am all for allowing people to opt out of social security. Of course those for whom it is a burden are also those whom it benefits. There really isn't a reason to bring Social Security into it. The reason I bring SS tax into it (and not property tax, etc) is that, as far as how it affects the average person, this is just a portion of the income tax. Yeah, we can place a different label on it, but the reality is that it is no different than the income tax. You pay a percentage tax (~7% technically, but 13% in reality) on your income. The money goes into the general treasury and is spent just like any other income tax dollar (though there is a separate artificial accounting of SS dollars). The only difference from the income tax is that the SS tax is a regressive tax with a different name -- but it works exactly like the income tax. The portion of your income that you're paying directly to taxes is the income tax + SS tax + Medicare tax. Even counting the Social Security "tax" you can see that the new tax structure still has higher income people paying at a higher rate. Agreed - they are paying a higher rate. But Democrats are absolutely correct when they say that the tax cuts favor the rich -- and it's not just in absolute terms (which should favor the rich and Democrats shouldn't be arguing). The tax cuts also favor the rich in percentage terms, meaning that more of the tax burden shifts towards the poor, which is especially bad for a recession economy. Did the 10% and 15% brackets get no cut, or did they already get cut to that level? I would like everyone to receive a cut, biut havve no problem with the lower people going first. All the rates got cut last year - To be honest, I'm not sure what the numbers were before that. I was under the impression that all the rates got cut about equally, but I'm not sure. These numbers are current vs. at the end of the Bush Tax Cut, so they already incorporate the first year of cuts in there.
If social security taxes were changed to exactly follow the same tax brackets as regular income tax, without a reduction in benefits, would that plan meet with the approval of most democrats (IYO). I don't know if I would necessarily agree wit doing this, but it would sure make any future tax proposals submitted by the Republicans hard to refute with the same old top 1% lines.
If social security taxes were changed to exactly follow the same tax brackets as regular income tax, without a reduction in benefits, would that plan meet with the approval of most democrats (IYO). I don't know if I would necessarily agree wit doing this, but it would sure make any future tax proposals submitted by the Republicans hard to refute with the same old top 1% lines. It would be interesting, certainly. You could cut the rate substantially if you did that - to probably 1-2% or so - and it would just become a part of the income tax. But first you have to eliminate the perception that SS is some kind of "investment system" and convince people that it's just a massive redistribution program (young to old) where everyone pays in and gets money out. Otherwise, people who pay more into the system will expect to get more out of it. Conceptually, though, yeah -- I don't think we should have an "SS tax" of any sort. It should just be a part of the general income tax. It might force more fiscal responsibility with the program as well. BTW, I also have issues with SS in general. In needs to be seriously rebuilt and cut. It's way too big a system that simply doesn't do what it needs to.
In the year 2000, a single mother of two in Austin, Texas paid more state taxes than Pepsi Corporation. Think about that.
It's not class warfare, it's human nature for those with wealth or property to exploit their power to influence laws that make damn sure they get to keep their wealth and power at the expense of their fellow citizens. I'm not saying being rich is wrong or makes someone a bad person. What I'm saying is that actively pursuing policies that make you richer at the expense of people who are living paycheck to paycheck is wretched. I work at Dell computers and I make pretty decent money but this economic stimulus plan does nothing for me. Ask most people who are making less than 50k a year and I'm pretty sure you'll get the same response. I'll restate my prior argument. Trickle down economics does not work! The extra money that the top 10% income class will make from this plan will not show up in the form of new jobs and new oppurtunities for the middle and lower classes. It will show up in the form of new ferraris and new Armani suits for the people who will benefit.
I read it about a year ago on one of those crazy leftwing websites ala michael moore. Can't remember exactly. The source is most likely questionable, as facts and statistics can be bent or interpreted to favor various viewpoints. I'm a 24 year old caucasian male. I pay my taxes. I served in the Army for 4 years to defend the inalienable right of the top 10% of Americans to become wealthier at the expense of people like myself. Have faith they say, the corporations and republicans will save us all. Just ask all of those Enron and Worldcom employees who lost everything while their exectutives dumped their stock and most likely will serve little or no time for swindling their own employees and minority stock holders.
Heretic, Thanks for serving, and lemme say I share some of your views. But Moore admits to distorting facts and footage. I like some of his work, but we can't trust his stats. This Pepsi thing is more than likely bogus. Unless the single mother is incredibly wealthy!
I'm guessing that "stat" is based on some loophole dealing with the words "state taxes". For example, Texas has no state corporate income tax - just a franchise tax. Depending on where Pepsi is HQed and where they pay state taxes, there may simply be no "state tax" that they pay. On the other hand, many of these companies end up paying net-zero taxes (federal & state) many years by taking massive writeoffs and such during those years. 2000 may simply have been a unique year for Pepsi in which they had a massive tax write-off or something like that.
I highly agree with you that Michael Moore can't be trusted as a stand alone opinion on anything. I'll try to be a bit more objective and simply state that the facts and past history point to this new economic plan as not being as beneficial to the middle and lower classes as it is to the upper class.
Guns or butter? _________________ War's Cost May Dwarf Stimulus Effect By Jonathan Weisman Washington Post Staff Writer Wednesday, January 8, 2003; Page A06 Mindful of his pending reelection bid and his father's political mistakes, President Bush is plowing ahead with an ambitious 10-year, $674 billion economic stimulus plan even as U.S troops pour into the Persian Gulf region preparing for war. The president's determination to push more tax cuts as the nation prepares for war has struck some economists as folly, since the economic shock of war is likely to dwarf the impact of Bush's stimulus plan. Moreover, no tax policy at the moment could actually address what many economists believe to be the greatest drag on the nation's economy: the uncertainty of war. "Clearing away the clouds over Iraq would open the paths for expansion, regardless of what the Bush administration is proposing," said Robert DiClemente, a managing director at Salomon Smith Barney who has studied the potential impact of an Iraq war on the U.S. economy. "That is undoubtedly the biggest obstacle to expansion right now." Bush was explicit about his two-track policymaking yesterday, beginning his speech in Chicago by addressing the threats of terrorism, Iraq and North Korea. He then added, "Even as we confront these dangers, you need to know I know we have needs here at home, especially the need for a vigorous and growing economy." But it is becoming increasingly difficult to address those domestic needs without first confronting the problems abroad, economists said. The goal of the president's plan is to inject $102 billion into the economy this year, by accelerating planned income tax cuts, excluding investment dividends from taxation, boosting the child tax credit and speeding tax relief to married couples. The elimination of dividend taxes alone could boost the stock market by 10 percent, according to White House allies. But all of that could be undone by a war in the oil-rich Persian Gulf region, especially if the war were protracted and led to terrorist attacks and the use of weapons of mass destruction. Last month, Yale University economist William D. Nordhaus published an analysis that dramatized the uncertainties the United States faces. The cost to the Treasury of a war with Iraq could be as low as $100 billion over the next decade or as high as $1.6 trillion, he concluded. Most likely, the economy would take a $391 billion hit in the next two years, Nordhaus predicted, which would dwarf the cash infusion the president is offering. "If energy prices spike up, it wouldn't take much to offset all of this stimulus," said William G. Gale, a tax economist at the Brookings Institution. A recent analysis by experts convened by the Center for Strategic and International Studies predicted that any war would knock down stock prices by as much as 25 percent, more than undoing the anticipated benefit of the dividend tax elimination. Recovery would depend on how a war with Iraq unfolded. If the war ended swiftly, stocks and the economy as a whole would recover quickly and grow at a rate faster than they would if there were no war, thanks to the lifting of uncertainty, falling oil prices, higher government spending and rising consumer confidence. In that event, the Bush plan could end up harming the economy by fueling inflation or pushing interest rates higher, said Laurence Meyer, a former Federal Reserve Board governor who convened the CSIS conference. But if the war lasted even six to 12 weeks, stock prices would continue to fall, interest rates would rise and economic growth would slow by 1 3/4 percent, the CSIS analysis said. A worst-case scenario -- in which the war dragged on for 90 to 180 days, oil supplies were significantly disrupted, and serious terrorist attacks ensued -- would push the economy back into recession, regardless of economic policymaking. In that case, the economic response would probably be far different from the one Bush is proposing now, Meyer said. That range of potential outcomes makes policymaking at this point "treacherous," he said. "The best policy right now is to wait, to see what happens ahead, and to plan in the background some contingency plans, just in case we have an adverse outcome," Meyer said. Not everyone is so cautious. DiClemente said the Bush proposal could provide a buffer for the shocks that would come from a war. Bruce Bartlett, a conservative economist with the National Center for Policy Analysis, noted that a war with Iraq could be long over by the time Congress passed a stimulus plan. In that case, he said, Bush might as well get the ball rolling now. But, for the president's critics, the timing and boldness of the Bush plan present an irresistible target. "Whenever the president talks about war, he talks about a spirit of shared sacrifice," Gale said. "But for rich people, shared sacrifice appears to be accepting tax cuts, and for the poor, it seems to be accepting cuts in social spending. There seems to be a disconnect bordering on the dishonest." Fumed Rep. Charles B. Rangel (N.Y.), the ranking Democrat on the tax-writing House Ways and Means Committee, "Never in a time of war have we reduced the tax burden on the most privileged." Even some of Bush's allies in past tax fights expressed exasperation yesterday, given the gathering clouds of war. "I understand you can't just put everything on the back burner and ignore it," said Sen. John Breaux (D-La.), a key ally in the battle over the president's 2001 tax cut. "But what you can do is take modest steps, and $670 billion is more than modest."
