The 'Tax Cut, For or Against' thread

[Sava]

Originally posted by Shi Huangdi
Bush's tax cut as is is pretty small, doesn't reduce the marginal tax rate by that much, seems like he is just trying to give the economy a small push to boost the recovery

[Kuciwalker]

The middle class pays the most in taxes COLLECTIVELY. That's because there are MORE of them. No duh. Individually, the upper class pay a far higher amount, as a straight number and as a percentage, than middle class.

[MichaeltheGreat]

Originally posted by skywalker
The tax cuts don't benefit the poor because for the most part the poor DON'T PAY TAXES IN THE FIRST PLACE!

The working poor and lower middle classes get screwed by FICA taxes and state sales taxes on the majority of items they must purchase for day to day living. The dollar amount of federal income taxes don't exceed those two items until you get to a fairly healthy income level, especially if you consider the employer's matching payment of FICA (assuming that went down, you'd have some combination of increased wages or cash available to the employer for other purposes).

Also, Bush doesn't have the political power to cut spending the way it should be. Thus, running up a deficit is the only way to force Congress to cut spending. Yes, it's twisted logic, but that's politics.

Bush doesn't have the power to cut taxes either, that takes the same votes from the same Congress that cutting spending takes. Bush has a Republican Congress, so if they're such corporate whores they won't fall into line, then I guess we know who really runs the country.

[Sava]

Individually, the upper class pay a far higher amount, as a straight number and as a percentage, than middle class.

The fallacy of progressive taxing in this country is that corporate tax credits aren't taken into consideration. In fact, Bush is a good example of this. He made a lot of money on a no-interest loan that was forgiven (i.e. never paid back). And with the emergence of multi-national corporations and other entities changing their addresses to Bermuda and other tax havens. The collective upper 1% pay far less of a percentage of taxes than the middle class.

Also, look at the value of the taxes to people. The $30,000 that a family of 4 making $75,000 might pay is a lot more valuable than the millions some rich corporate exec might pay.

[chequita guevara]

With the Administration projecting deficits for 50 years, even without the taxcut, I can't see how this is in any way, an intelligent idea. It's simply passing the taxes on to your chiildren and grandchildren.

[Sava]

Also, Social Security taxes are capped at $60,000 I believe. Progressive indeed.

[MichaeltheGreat]

Originally posted by skywalker
The middle class pays the most in taxes COLLECTIVELY. That's because there are MORE of them. No duh. Individually, the upper class pay a far higher amount, as a straight number and as a percentage, than middle class.

From an economics and policy perspective, which is the point of the thread, nobody gives a **** about individuals, it is ONLY the gross effect on budget numbers and economic stimulus that are meaningful.

[RGBVideo]

'Tax Cut, For or Against'

In the EU area? Why yes, sure.
In the United States? I wouldn't think that it would be pretty wise, with such deficits.

[MichaeltheGreat]

Originally posted by Sava
Also, Social Security taxes are capped at $60,000 I believe. Progressive indeed.

Around $86,000 or so this year - it gets indexed for inflation every year, so I haven't looked up the 2003 number yet.

The medicare portion caps much higher, around the $150-160k range. However, benefits, such as they are, also cap, so the progressive/regressive label is meaningless if you assume that payees into the system will in fact receive benefits from the system.

The problems with SS are structural, i.e. a lot of people either outlive the assumptions of the benefit formula, and draw more than they ever put in, while other people, and especially survivors, get screwed.

Of course, I'd be surprised if you were in favor of privatization, which is the only real long-term solution.

[Sava]

Originally posted by MichaeltheGreat
Around $86,000 or so this year - it gets indexed for inflation every year, so I haven't looked up the 2003 number yet.

The medicare portion caps much higher, around the $150-160k range. However, benefits, such as they are, also cap, so the progressive/regressive label is meaningless if you assume that payees into the system will in fact receive benefits from the system.

The problems with SS are structural, i.e. a lot of people either outlive the assumptions of the benefit formula, and draw more than they ever put in, while other people, and especially survivors, get screwed.

Of course, I'd be surprised if you were in favor of privatization, which is the only real long-term solution.

Ah yes, I knew it was in the 5 figure range. Surely this is fair for someone making a 7 to 9 figure salary. Anyone making over 8.6 million is paying less than 1% to social security.

And yes, there' privatization. I'm surprised somebody as educated as yourself would believe it's claims. Maybe you don't have any 401k's. Ask anyone with a 401k if they want to trust their retirement money to private investments.

[Spiffor]

Can anyone tell me what a 401k is ?

[Kuciwalker]

A type of retirement plan.

[Sava]

Originally posted by Spiffor
Can anyone tell me what a 401k is ?

A retirement plan that is basically linked to a company's stock. In the past few decades, companies have stopped giving guaranteed pensions to anyone who isn't a corporate exec or CEO. In the place of the pension, the 401k stands. In reality, it really just gives more of other people's money to Wall Street people to play around with.

[Jaguar]

Poor people benefit most from the tax cut in terms of "what am I paying now vs what will I be paying." The richest quarter of the population has their taxes reduced very little percentage-wise, but it comes out to a lot because they pay the most. (The richest 1% pays about 26% of all taxes.) I think the wealthiest go from 39% income taxes to 36, and the poorest go from 15% to 10.

So IMO the "benifits only the wealthy" stuff is bull****. However the fact that Bush isn't cutting spending is what bothers me. The National Debt isn't a problem right now, but it will be if Republicans continue cutting taxes while keeping spending the same, and Democrats continue raising spending while keeping taxes the same.

However, the government is giving me money. I'll take it.

[Sava]

So Jaguar, does that explain how Democrats brought surpluses? And how a projected 4.6 trillion dollar surplus turned into a 5 trillion dollar deficit?