I see where the failure to communicate here is. I need to define successful entrepreeur...in fact...let's scrap that. Take an individual...ANY individual in the 33% bracket. Since it is a marginal rate, assume that they pay 25% of their income and then the 7% SS. It's still 33%...so the first qaurter all of your profits belong to Uncle Sam. It gets MUCH worse for the higher bracket...then it probably works out to something along the lines of 41 to 42%. It's still WAAAAYYYYYYY too high a percentage IMO. But even still...add state sales taxes, income taxes (in states that have one), car registration...taxes on electric bills...gas taxes...etc etc etc. It's a HUGE percentage of your yearly income. An unfair percentage. What this all leads me to think is that EVERYBODY could use a tax cut.
I see where the failure to communicate here is. I need to define successful entrepreeur...in fact...let's scrap that. Take an individual...ANY individual in the 33% bracket. Since it is a marginal rate, assume that they pay 25% of their income and then the 7% SS. It's still 33%...so the first qaurter all of your profits belong to Uncle Sam. It gets MUCH worse for the higher bracket...then it probably works out to something along the lines of 41 to 42%. I agree that we have high taxes and all -- whether to, how much to, and where to reduce them is debatable. I think it would be nice to have a tax cut, but I personally think the spending cuts have to come first, or we're just racking up debt that's going to hurt us down the road. My main point on the tax issue is that the rate actually doesn't increase as you get into the higher brackets. While the income tax rate goes from around 25% to 38% on the new income, your SS tax goes from 13% to 0%. So you end up at more-or-less the same net rate all the way along. Technically, I believe the highest rate paid is in the upper-middle class area (I think around $80,000 in income). The income tax is progressive, but the SS tax is regressive, so it kind of cancels out. As a side note, this all doesn't include all the various deductions that you can get. These apply to all different classes (poor, middle, rich), so I'm not sure how they affect the net tax rates.
Major-- As usual you make some really good points. I can tell you that before losing my job I was in the middle class. I was in the low end of the 33% bracket. Because I "made too much money," I couldn't deduct any of my student loan interest. I had money taken out at the appropriate level given my life situation (married, no kids). Well guess what? When I filled out my 1040 lo and behold...there was Uncle Sam with his greedy palm out asking for an additional $2,000!!!!! And now they are asking me to pay tax on unemployment benefits. Not a huge deal to me...but what about those who need the money just to eek by because they're single? That's just not the America I was told existed when I was growing up.
Ref, I understand your desire for tax cuts, I personally could benefit as well. But what of the major expenditures do you want to cut --military, homeland security, social security, Medicare, medical (NIH/USDHHH)/scientific (NASA, NSF, others) research, others? In truth you could cut all federal sponsored research (things like cancer research, NASA), the FAA, the EPA, the DoEd, the NEA, the NPS, and not dent the budget by more than a couple of percent, so you really are talking about the other areas I mentioned if you are planning to offset substantial tax cuts with spending cuts. Now you could be arguing a TJish strategy of tax cuts and deficit spending and believe that is a good long term strategy for the economy and our nation, but sorry, despite TJs "classic" work I err on the side of Greenspan’s views on the wisdom of this.
I must quote an old roommate of mine who went to work for the government. "You never will know how much pork is really out there until you've worked for the government." How about starting with responsible spending? Kill the pork...kill the special interests. As it pertains to deficit spending. I believe from my schooling in business and economics that deficit spending is a good thing in the short term. That helps us get out of a recession. The government borrows money...etc etc. Once the recession ends...there will be no more deficit spending because more people are making more money and fewer people need less money from the government for things like unemployment benefits. The notion of building up a huge surplus to sit there in discretionary accounts has always seemed a bit odd to me.
Reading this whole thread from start to finish, Right1's post made a nice capper. Both parties are really selling our environment short. It's just that Bush's energy/business ties are selling it shorter. As a moderate, I could give a rat's ass about party lines, but the Democrats dropped the ball here. Occasional news stories about Bush's policies make me cringe sometimes, and though I don't have any strong affiliation to either party, I'd wish the Democrats would stick their head out and make some stand to keep the Republicans in check. My guess is that's the cause to the low turnout. They had no substantial platform to rile people out of their couches with. 2 years of full "Conservative" control makes me wonder what good could be done...or it could make me as cynical as ever...
Originally posted by Major No, it's really not semantics. First, entrepreneurs pay exactly the same net taxes as any other wage earner - they are not penalized in any way, although it may sound that way since they pay the employer side of the SS tax. Second, no one pays 48% of their money. The tax rates don't work out that way. Pick any total income amount, calculate the taxes owed, and you'll never get near 48%, because SS taxes are only paid on the first $80,000 and the top tax rate isn't reached until well past that. As long as you make the Subchapter-S election for small corporations. In fact, that highest net tax rate (income and SS tax) is paid by middle class wage earners. Maybe for some, I don't think it calculates out that way overall. Why would the graphs look this way? See: Average Federal Tax Rate by Income Group, 2001 (Includes Individual Income, Payroll, and Excise Taxes) on http://www.cato.org/fiscal/2002/factsfigs.html
Want to 'see' why Refman gets upset about taxes (and maybe some of the rest of us?) * Before 1950, the Federal Budget never exceeded 7.3% of the GDP. In 1950, it hit 14.4%, 1960 was 17.8%, and 2000 was 20.8%. It has since dropped to only 18.2% (2003 est). * In per capita dollars (adjusted for inflation), the Federal government's revenues were $151 in 1900, $556 in 1940, $2,150 in 1960, $7,668 in 2000, and dropped down to $6,943 in 2002. All the graphs are at http://www.cato.org/fiscal/2002/factsfigs.html (Want to see individual State rates? Forget that ranch in Montana...11% State Rate http://www.taxfoundation.org/individualincometaxrates.html)
Originally posted by right1 ...Don't worry, it's a good thing. The consumers of oil won't have to spend so much on gasoline. Don't worry, children don't really NEED clean air, food and water. Children don't really NEED to go outside. The lucky ones can just grow up like me, trade stocks and save on gas. Fantasy world? Come with me my friend. I'll show you how the other 3/4ths live. Oh, and Jorge, you can call me a REPUBLICAN if it makes you feel better. I'd be happy to help. Oh, and Jorge, we do differ in what we value as wealth. Your's is monetary. Mine is spiritual. One seems to last longer. Good night. Happy trading . TJ, Condescension can be a b*tch, eh?
Monetary happiness and spiritual happiness are now mutually exclusive? hmm... well I guess if you're poor then you can try to feel better about yourself by saying that.... yawn... Sorry right1 that you don't know much about the oil industry and you can't back up your environmental demagoguery, but to exact revenge by claiming spiritual superiority over me isn't a very Christian thing to do.
Because when you have debt, that's money owed. It gets compounded with interest. That's money that if the budget was balanced could be used for other things including lower taxes. The larger the debt the more intrest. Sometimes like after 9/11 or other emergencies it's definitely necessary to go over budget. However having that as standard practice isn't sound economic policy. Intrest rates go down, helping investors, and the AMerican family. Sure people won't be able to by U.S. savings bonds, but I think that's actually a good thing. The money that people would have spent on those will actually go toward investing in companies so they can grow. Intrest rates for things like College loans, will go down to. Again that gives people more money to spend on the economy. Same with credit card payments, Auto payments, mortgages etc. Debt reduction will lower intrest rates on all of that giving people more money back than the tax cuts, and it will actually be good for the govt. instead of bad. http://www.truthout.org/docs_01/0010_Pelosi.Tax.Cut.htm http://www.pascrell.house.gov/display2.cfm?id=3673&type=News
That is a great politicians answer (who doesn't want to cut "wastefull spending") but it my mind dodges the question. If you want to reduce federal expenditures to go with substantively lower taxes you need to cut those areas I mentioned--defense, social security, medicare, and to a lesser degree health research. Even NASA, NPS, NEA, EPA, foreign aid, farmer subsidies--many of the favorite targets by one group or another, you could cut every cent to them and it is small potatoes in the big picture of our budget. Deficit spending can make sense in the short term, but we have been carrying a huge national debt for what close to 20 years now--that is long term. For the military hawks--ya'll realize we almost could have have put almost twice as much in the military in 1998 if we hadn't been paying interest on the debt due to federal fiscal mismanagement. Over the last 20 years for every dollar and a half paid on debt interest we have put around 1 dollar on things like searching for cures for cancer, AIDS, better treaments for heart disease, and other medical research. In my mind the real, practically substantive, "wasteful spending" is that we do for interest on our debt that could go for something we could tangibly get back. There is also a misnomer about the the "surplus. We have never had a national surplus, we are not close to playing off our national debt. We have had some budget surpluses, even more projected surpluses, but to me that point is moot until the national debt is small. And compare what the government was doing then versus now. Sorry, but this figure isn't likely to go down. Unless someone proposes killing social security and Medicare--maybe Forbes does, and barring some kind of nation wide catastrope due to illness or war--all realistic projections see them escalating in the future. But if we can get the debt down (at most paying a couple of percent of our federal expenditures on debt interest instead of hovering between 14-20+% on our current course) and plan wisely now for the SS/medicare future hits we could lesson the burden for future generations.
Yawn? Wow. I'm all for getting rich, but money can't buy class. Are you seriously contending that the extraction, shipping, refining, and consumption of petroleum products are NOT harmful to the environment? Please go on record with your answer.
I am contending that energy is a vital component of the world's economy. Energy companies pour billions into environmental protection each year. Energy companies far exceed what is required of them when it comes to spending on environmental protection. They get zero credit for this. Pollution is a 'luxury problem' that should be addressed as a secondary concern.
Maybe for some, I don't think it calculates out that way overall. Why would the graphs look this way? See: Average Federal Tax Rate by Income Group, 2001 (Includes Individual Income, Payroll, and Excise Taxes) on http://www.cato.org/fiscal/2002/factsfigs.html Cohen, I don't believe that graph includes SS taxes, although I could be wrong. If I'm right about that, then you need to add ~13% to all the below $80k levels, which would put something around $80k as the highest level. If I'm wrong and that does include SS taxes, then that's the result of the various deductions that are available. I am looking just at the base tax rates because I don't know enough about all the various deductions possible. If that's the case, though, I don't see the problem. Republicans are clamoring for a 17% flat tax, yet all the middle classes pay around 17% right now according to that graph. The fact that the high point is around only 27% though tells me that it probably doesn't include the ~13% SS taxes. I know for sure that it certainly doesn't include the ~6.5% paid by the employer. That definitely needs to be added to be economically sound.
That does not mean that pollution (acid rain, nuclear waste, global warming, contaminated groundwater, etc) is a vital component of the world's economy. Wake up jackass. Uh, yeah. That's because they are one of the largest sectors that cause environmental destruction, not because they are somehow more altruistic than other industries. That is because they spend far more in lobbying to keep regulation down than they do on environmentally friendly policies. Hence the regulation is low and their profit remains high. Typical short term thinking. The fact is that petroleum is a finite resource and the squeeze is coming. By continuing to entrench petroleum dependency the major energy players may make their quarterly numbers, but they slow the transition to more efficient and less environmentally destructive forms of energy generation. Even in the short term, the entrenchment of the petroleum economy by the major energy players subjects our economy (along with the rest of the world) to potentially devastating price shocks whenever some third world despot makes a play in the gulf. The fact that the demise of the industry based on petroleum is INEVITABLE should clue your stupid ass into the picture that transition is better than entrenchment. Hello? Earth to Gordon Gecko. Do you have a brain? That's because they are the major polluters and because they STILL pollute more than they fix. And there would be nothing to fix if they didn't screw it up in the first place. Uh, what does this mean? A 'luxury problem?' If our infrastructure gets wiped out from super hurricanes, if our water is undrinkable, if our crops die from drought, if life in our oceans dies, we will all be worse off, if not dead. How is that a luxury? What is a necessity? Electricity in a toxic environment? That is ridiculous.
HayesStreet, Wow, you sound emotionally distraught. You sound like a defeated man. I wonder how that happened? sigh I've done quite a bit of work in the energy sector. Oil and gas, coal, timber, and other minerals are all areas I've dealt with directly. No one has the intention of destroying the environment. No one wants to do it. The energy players have a very, very difficult task in order to provide *vital* fuel for the world economy and allow for a better standard of living for all. Inherent in this task is environmental danger. You try pulling hydrocarbons out of the ground 10,000 feet beneath the waters of the Gulf of Mexico without some leakage. You seem to act like it is the easiest thing in the world to not cause environmental damage, and that they are making a conscious decision to harm the environment. This simply shows your lack of experience in the industry. Amateur. It is indisputable fact that the energy industry cares deeply about the state of the environment. They pour billions into the cause, in an effort to be a responsible corporate citizen. They certainly don't have to go to these lengths -- but instead they choose to. While members of the environmental lunatic fringe, like yourself, prefer to ignore the billions of dollars directed by the sector towards conservation, I don't. You know as well as I do that a balance must be struck between protecting the environment and providing for the basic economic needs of a world economy. Fortunately, we have a team in Washington now with a mandate to find that acceptable balance -- and I have full confidence that they will do so. love, Trader_Jorge
