Now that we Amis have a nice tax cut, how to reduce spending to cover it?

[DAVOUT]

Originally posted by JohnT
"Actually I'm looking at it from a cost\benefit point of view for society as a whole, and you are looking at it as a cost\benefit point of view for individuals."

Given that a society is made of a collection of individuals, I cannot see the reasoning of things that are non-beneficial for the individual are beneficial for society.

Individuals are not directly beneficial from being drafted, but the society needs an army. In the same way, when a portion of my social security charge is used for the benefit of poorer people, I am not happy, although I appreciate living in a society where poor people are not dying in the streets.

[Kidlicious]

Originally posted by JohnT
"Actually I'm looking at it from a cost\benefit point of view for society as a whole, and you are looking at it as a cost\benefit point of view for individuals."

Given that a society is made of a collection of individuals, I cannot see the reasoning of things that are non-beneficial for the individual are beneficial for society.

Sure, but you make an error when you don't count some peoples benefits. For example, there are immediate benefits with transfer payments. If we count transfer payments as an investment we make an error calculating the total benefits because the benefits to an investment are delayed. The delay in benefits is a significant factor here, because with the privatized system the benefits would not be realized for many decades.

[DAVOUT]

[QUOTE]
Year Taxable amount
1978 $17.700
1979 $22,900
1980 $25,900
1981 $29,700
1982 $32,400
1983 $35,700
1984 $37,800
1985 $39,600
1986 $42,000
1987 $43,800
1988 $45,000
1989 $48,000
1990 $51,300
1991 $53,400
1992 $55,500
1993 $57,600
1994 $60,600
1995 $61,200
1996 $62,700
1997 $65,400
1998 $68,400
1999 $72,600
2000 $76,200
2001 $80,400
2002 $84,900
2003 $87.000
[/UNQUOTE]

Does this result from an indexation on inflation ?

[Kidlicious]

Davout,

I'm pretty sure it is.

[DAVOUT]

It shows the two periods :

- before 84 : two digits inflation
- from 84 on, abruptly around 5% and lower

Same profile in Europe. Never been explained convincingly AFAIK.

[HershOstropoler]

More like indexing nominal income growth.

[Kidlicious]

Originally posted by HershOstropoler
More like indexing nominal income growth.

Wouldn't the increases be greater during the 90s then?

[Kidlicious]

Here we go. This is from the handbook.

1301.2 How is the maximum wage amount increased each year?
For the years after 1981, the maximum wage amount is usually increased by Congress. If Congress does not increase the maximum amount, it is automatically increased in multiples of $300 if there is a cost-of-living increase in Social Security benefits. The increased amount is officially published in the Federal Register on or before November 1 of the year before it goes into effect.

[DanS]

And you can double that screwing if you're an African-American.

Quite true. This is a huge economic injustice that I wonder why the black community hasn't pushed in the Democratic Party.

Generally speaking, I support MtG's policy proscription. I would be for an elderly poverty reduction plan, though. Some may make bad mistakes with their investments, so you need to have a safety net of some sort.

Hershell: Only E200/mo? Did you calculate what you would need upon retirement and then figure out the necessary contribution? Or are you saving an arbitrary amount?

[HershOstropoler]

"Did you calculate what you would need upon retirement and then figure out the necessary contribution? Or are you saving an arbitrary amount?"

Starting at age 25 and assuming a 7 % return, that leaves me with 500.000 € at age 65. Simple capital consumption over 15 years would be ~33.000 € / year. It is likely that I'll retire at 68, and increase my contribution to 300 or 400 € over time, so it should look a bit better. In addition, I'll have a house with no debt to live in, and an appartment with no debt to rent out. As planning out to 2036/2039 is ripe with uncertainties, that's as safe as it gets.

[DanS]

I guess that isn't so bad, considering that all of your medical is paid for. A 5% real rate @ E300 overall would be about 500k real by 68.

In the US, drugs aren't paid for upon retirement (partially paid for?). This adds a higher degree of uncertainty to the calculations, which makes me salt away a lot more. Also, 401(k)s and IRAs can be accessed for other activities, such as education and medical care, so it makes more sense to put money into these accounts.

In the end, I'm more arbitrary in my deposits.

[HershOstropoler]

"I guess that isn't so bad, considering that all of your medical is paid for."

Not all, but I have private health care insurance too.

"This adds a higher degree of uncertainty to the calculations, which makes me salt away a lot more."

How much more?

"Also, 401(k)s and IRAs can be accessed for other activities, such as education and medical care, so it makes more sense to put money into these accounts."

Well you have tax reasons to do that, too, or?

[Sava]

Senator plugs child tax credit for low-income families

WASHINGTON (AP) --Sen. Blanche Lincoln, Democrat from Arkansas, said Saturday she will introduce legislation next week to restore child tax credits to low-income families that were stripped out of President Bush's tax cuts at the last minute.

Delivering her party's weekly radio address, Lincoln said low-income families were unfairly squeezed out of the $350 billion tax-cut package that Bush signed Wednesday, which will provide child tax credits for wealthier Americans.

Republicans have touted the landmark tax package as much-needed relief for working families. Under the increased tax credit, which ranges from $600 to $1,000, most families this summer will receive a $400 check in the mail for each child.

But a provision that would have extended that benefit to families with annual incomes between $10,500 and $26,000 was quietly scratched from the final bill by GOP negotiators "to make room for the dividend tax cut and other measures that only benefit the wealthiest taxpayers," Lincoln said.

"That's simply unfair to low- and middle-income taxpayers, who work hard to provide for their families," she said. "After all, buying blue jeans for the kids or tires for the car is just as expensive for a family making $20,000 a year as it is for a family making $100,000."

Lincoln said she will introduce legislation to restore the tax credit for lower-income families next week, with Sen. Olympia Snowe, R-Maine, as a co-sponsor.

"This isn't about partisanship," Lincoln said. "It's about doing what's right for families who may need a little extra help. We should fix this problem immediately."

I'm glad someone decided to report this story. This phony-baloney stimulus is really a "cut taxes for the rich" ploy while lower income families see the elimination of their tax credits. Bush's plan eliminated tax credits for lower income families that would have affected some 12 million kids (according to local radio reports I'm hearing). No child left behind indeed.

[JohnT]

You know, I just wish some people would actually look at the linked IRS chart.

Sava, people who don't pay Federal Income Tax deserve no Income Tax refund. Sorry, but that's just the way it is.

And the idea that the story isn't being reported... uh, do you even look at the news?

[Sava]

Originally posted by JohnT
You know, I just wish some people would actually look at the linked IRS chart.

Sava, people who don't pay Federal Income Tax deserve no Income Tax refund. Sorry, but that's just the way it is.

And the idea that the story isn't being reported... uh, do you even look at the news?

That would be nice JohnT, except for that fact you are wrong. Even when I was working part time in 1997, making minimum wage at Pizza Hut, I paid Federal Income taxes. The fact is, anyone working full-time at a minimum wage job falls under the 20k mark and PAYS INCOME TAXES.

You should really put aside your political bias for a second, look at the facts and realize that Bush's tax cut is really a gift to the rich and an expense to the poor. The middle classes get a little, but a $400 dollar check doesn't mean sh1t when most people's retirements are going down the tubes. Or if they are part of the 2.6 million that have lost jobs.