I can't resist one more attempt, but I generally agree with you DC, this is pointless. The brilliance of the following explanation will be lost.
First, I will assume that DC and Mr. Tia agree that rich (and powerful) people have more options than poor people. Poor people are generally locked into our income tax code, as opposed to wealthy people who have the options available with the Corporate tax code, foreign investment tax code, capital gains tax code, estate/trust tax codes, etc, etc. So, lets look at a poor person as tax cuts may relate to "trickle down".
Let's say we have a single working mother with two minor children and she made $14,900 in 2006. In her case she would have a standard deduction of $7,500 as head of household, she would $9,900 in excemptions (3 people times $3300 each), she would then have a taxable income of $0. She would qualify for two child tax credits or $2,000 and she would qualify for the earned income tax credit, in her case, $4,522 dollars. She would get a tax refund based on those credits of $6,522. So her after tax income is $21,422.
Now let's say she got a better job and earned $39,000, everything else is the same. She would still have a standard deduction of $7,500, and $9,900 in exemptions. Now her (line 27 - 1040A) taxable income is $21,600. And her tax would be $2,706. She still gets the child tax credit of $2,000. However, her earned income tax credit is now $0. Now her after tax income is $38,294.
Her employment income went up by 162%, and her after tax income went up by 78%. Her tax impact was $7,228, on an additional earned working income of $24,100. That is equal to a marginal tax rate of 30%. As a working poor person she gets screwed by the tax code if she tries to improve her life. For every extra dollar she earns the federal government (not talking state, FICA, Medicare) the government takes $.30. What if she had that money for clothing, food, savings, college for her kids, an IRA, would that be good for the economy? Would that be good for her?
These are real numbers using IRS Publication 17 from 2006. Using tax credits or not these numbers have real impacts on real people. Anyone in a 30% marginal tax bracket is getting screwed by the government in my opinion, and to think that the government will do a better job spending the money is to be a fool. Spending in Washington is out of control, tax cuts are not the problem.
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"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."
Last edited by aceventura3; 10-03-2007 at 04:57 PM..
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