New tax cut??? - Tilted Forum Project Discussion Community

fudd · 05-12-2003, 09:34 AM

Haven't been following the news...Does anyone know what Dubya's new tax cut will do (if anything) for the common man?

Thanks.

Liquor Dealer · 05-12-2003, 09:56 AM

It won't do much of anything. All it can do is put money back into circulation which causes people to go out and buy things which causes the seller to have to replace that merchandise with more which puts more money into circulation because the money paid to the manufacturer is gong to be used to pay stockholders and employees and to buy raw materials which are used to make the product that is sold back to the store so someone can buy it and by doing so put money into circulation which is used to create jobs and ................

It probably won't do much more than that.

maximusveritas · 05-12-2003, 10:02 AM

Quote:

Originally posted by fudd
Does anyone know what Dubya's new tax cut will do (if anything) for the common man?

Short answer: practically nothing.

About 60% of the tax cut will go to those with incomes above $250,000. 45% of the cut will go the top 1%.

The common man will get about $270. Rich folks like President Bush will get about $100,000.

Bush promises new jobs. He promised the same thing last time, but we lost 1.5 million of them.

Liquor Dealer · 05-12-2003, 10:14 AM

http://www.pbs.org/newshour/extra/te..._cut_5-07.html

As I understand it, and I am by no means an accountant, one section will do the following:

If Taxable income is $0-$6,000, you save: $0-$300
If Taxable income is $6,000 - $27,950, you save: $0 (no change in taxes)
If Taxable income is $27,950-$67,70, you save: $838.50-$2,031
If Taxable income is $67,700-$141,250, you save: $2031-$4,237.50
If Taxable income is $141,250-$307,050, you save: $4237.50-$9211.50
If Taxable income is $307,050 or higher, you save: $11,053.80 or higher

(I don't know where the quoted figure of $270 came from)
This from a teacher's guide explaining one section:
There are lots of sections.

The following makes interesting reading
http://www.ncpa.org/bothside/krt/krt010600b.html
Bush's Proposed Tax-Cut Will Remove Six-Million Americans From Tax Roles

ALEXANDRIA, VA.

In a town notorious for spectacles, it is something to behold.

Testimonies by the new found believers, the fire-and-brimstone sermons, and the brash choir belting out a high-flying refrain would have brought tears to the eyes of Jimmy Swaggart.

But the "congregation" isn't in church; they are in Washington railing against tax relief because it was "fiscally irresponsible."

Yet, opponents of tax cuts continue to demonstrate that they are still worshipping at the altar of big government, and their claim of having been "saved" is just a different verse from the old hymn book of government knows best.

Instead of donning false frocks of fiscal responsibility, these new acolytes ought to take a page from their predecessors' book.

In 1981, House Speaker Tip O'Neill proposed, in current dollars, a $1.3 trillion five-year tax cut to counter the $1.6 trillion tax cut offered by Ronald Reagan. At well over a trillion dollars, O'Neill's plan was billed as the "responsible" alternative.

In contrast, the Congressional plan President Clinton vetoed last year would return only $792 billion over the next ten years, and it included a mechanism to limit the cuts if the projected surpluses do not materialize.

Based on cautious economic assumptions, the plan currently proposed by Texas Governor George W. Bush would provide roughly $440 billion of tax relief over the next five years.

With stern warnings that a tax cut would fuel the flames of inflation and would overstimulate the economy, these new disciples of austerity argued for saving the money and paying down the debt.

Yet, they were willing to support President Clinton's plan that generated an additional $850 billion in new spending over the next ten years - on top of the $2.5 trillion increase called for under current budget projections.

The Clinton scheme would have raised taxes by almost $95 billion and soaked up $750 billion of the budget surplus over the next ten years. A similar proposal is expected to be submitted this year.

Research by National Taxpayers Union Foundation found that the legislative agendas of tax-cut opponents in the House of Representatives during the last Congress would increase federal spending, on average, by $115.9 billion per year.

While opponents of the tax-cut sing the praises of their new-found faith, they remain filled with joy when the choir belted out that old familiar standard: "only the rich benefit."

By definition, any plan to cut income taxes is likely to help those who do, in fact, have income. Even the IRS's own data show that the top tenth of income earners made 43 percent of the money in 1997 but paid 63 percent of the income taxes. I

Ironically, the income cut-off for this "rich" group of taxpayers began at $79,000 - hardly in league with Donald Trump.

Nonetheless, the Bush plan would still eliminate federal income taxes for a family of four making $35,000 per year, and it would remove over six million lower- and moderate-income families from the tax roll.

Far from being risky or reckless, plans to give money back to taxpayers are modest, measured moves. Unfortunately for these new pastors of the public purse, taxpayers can separate those who have real faith in them from those who are only mouthing the words.

Jeff Dircksen is Director of Congressional Analysis for the National Taxpayers Union, the nation's oldest and largest taxpayers' rights group.

4thTimeLucky · 05-12-2003, 10:21 AM

Good economic lessons by both Liquor Dealer and maximusveritas.

Whilst tax cuts are intended to work as Liquor describes, they often end up being scuppered by the phenomenon maximus eludes to. Give a poor man $100 and he will spend it all. Give a rich man $100 and it will accumulate interest in a bank.

One could equally use Liquor's argument to respond to the question "what do taxes do?"

It won't do much of anything. All it can do is take money out of (rich) people's bank accounts and use it on public spending, which requires the government to employ teachers and doctors, who need to be purchased equipment to work with and buildings to work in, which causes government to go out and buy things which causes the seller to have to replace that merchandise with more which puts more money into circulation because the money paid to the manufacturer is gong to be used to pay stockholders and employees and to buy raw materials which are used to make the product that is sold back to the store so someone can buy it and by doing so put money into circulation which is used to create jobs and ................

maximusveritas · 05-12-2003, 02:01 PM

Couldn't find a source for the $270 figure, but I did find this excellent editorial from Paul Krugman, who goes with $217 :

Quote:

Into the Sunset
By PAUL KRUGMAN

Chutzpah, according to the classic definition, is when you murder your parents, then ask for sympathy because you're an orphan. But what do we call it if after you are placed with foster parents, you try the same thing all over again?

I ask this question in light of the tax-cut package the House is expected to pass today — a package that relies on exactly the same bait-and-switch tactics used to sell the 2001 tax cut. Since the scam involved in the 2001 tax cut remains one of the wonders of modern political economy, it is a measure of our leaders' contempt for the intelligence of the public — or maybe for the press — that they think they can use the same tricks a second time.

Here's the story: in 2001, as now, some swing senators insisted on a budget resolution limiting the size of any tax cut. No problem. House-Senate negotiators pushed through a huge tax cut anyway, "saving" several hundred billion dollars by making the whole thing expire in the 10th year. Among other things, this "sunset clause" implied that heirs to large estates would pay no tax if their parents died in 2010, but would face significant taxes if their parents made it into 2011. At the time I suggested that it be renamed the Throw Momma from the Train Act of 2001.

Needless to say, the bill was silly by design. The administration didn't intend to compromise: it fully expected to get the sunset clause repealed in a future Congress. And President Bush was soon out there ridiculing the way the tax cut was programmed to expire, implying that the expiration date was imposed by scheming liberals, when in fact it was a trick perpetrated by his own Congressional allies.

Now Congress is voting on more tax cuts. This time we're already running a record budget deficit, and the long-run prospect is bleak. Still, the administration claims to be making a concession by agreeing to scale back its $726 billion tax cut to a mere $550 billion.

So how does the House bill, which is broadly similar to the administration's proposal, stay within that $550 billion limit? Sunset clauses! Many of the provisions would supposedly expire in 2005, others in 2012. Otherwise, it's a bigger tax cut than the administration proposed. And the sunset clauses, like those in the 2001 tax cut, are clearly a mere gimmick: as soon as a tax cut becomes law, the administration will begin demanding that the whole thing be made permanent.

The Center on Budget and Policy Priorities estimates that the true cost of the House bill, without the sunset scam, would be $1.1 trillion over the next decade. You know, $550 billion here, $550 billion there, and pretty soon you're talking real money.

The new tax cut plan echoes the 2001 scam in other ways. In 2001 a tax cut that delivered about 40 percent of its benefits to the richest 1 percent of families was marketed as a tax break for ordinary folks. The same is true this time. In fact, the extent to which the House bill favors the rich is breathtaking: the typical family would get a tax break of only $217 next year, but families with incomes above $1 million would get an average of $93,500 each. The center estimates that over the next decade, 27 percent of the tax cut — about the share that goes to the bottom 90 percent of the population — would go to these very high-income families, who comprise a mere 0.13 percent of the population.

Finally, as in 2001, we're being told that this tax cut will create lots of jobs. But why should we believe that? It's hard to find an independent economist who thinks that the Bush proposal would create the 1.4 million jobs claimed by the administration — and as I've explained in this column, even that many jobs would be a poor payoff for a tax cut that big.

And bear in mind that Bush-style tax cuts now have a track record. Of the 2.1 million jobs lost over the past two years, 1.7 million vanished after the passage of the 2001 tax cut.

Nonetheless, the odds are that this scam, like the scam of 2001, will succeed. The tax cut will be passed, and the budget will plunge even deeper into the red. And one day we'll realize that international investors are treating us like a banana republic — that they won't finance our trade deficit unless they are paid very high rates of interest (have I mentioned that the dollar has just fallen to a four-year low against the euro?) — and everyone will wonder why.

http://www.nytimes.com/2003/05/09/opinion/09KRUG.html

The_Dude · 05-12-2003, 05:22 PM

when are they going to figure out that tax cuts arent going to solve all the problems?

crewsor · 05-12-2003, 05:59 PM

I don't know if the proposed tax cut will help middle class Americans or not. Alls I know is instead of a cut, I wish they would just fix the unintelligible, bloated system altogether.

The tax book is what? About a quadzillion pages of gobbledygook.
Its a crying shame it been allowed to evolve into the mess it now is.

It should be scrapped altogether, and start fresh if you ask me.

There has got to be a better system. Be it a National sales tax or a flat tax. The system as is, benefits only the wealthy and corporations who can hire lawyers and accountants to evade the burdon everyone else must bear.

We need to create a fair, simple, system. Fat chance of that in my lifetime, huh?

iccky · 05-14-2003, 11:17 AM

Basically the idea behind cutting taxes on the wealthy is that they will then invest it in the economy, starting businesses, building factories ect. It will increase the capital available, spurring the economy. The problem with that theory is while some more capital will be available because of the tax cuts higher federal deficits mean that the government is borrowing more. When the government borrows it takes money out of the capital pool that could otherwise go to businesses to create jobs ect. (i.e. a mutual fund buys treasury bonds instead of investing in stocks). So in the end, its pretty much a wash. Tax cuts make more capital available, deficits reduce the amount of capital, the economy stays in the shitter while my generation (I'm 20) is stuck wth massive federal debt that will take a lot of taxes in the future to pay off.

Quote:

It won't do much of anything. All it can do is put money back into circulation which causes people to go out and buy things which causes the seller to have to replace that merchandise with more which puts more money into circulation because the money paid to the manufacturer is gong to be used to pay stockholders and employees and to buy raw materials which are used to make the product that is sold back to the store so someone can buy it and by doing so put money into circulation which is used to create jobs and ................

Incidentally, that really isn't true. It's not like the government is sitting on these pils of cash that it doesn't spend. Government spending creates jobs just as surely as private sector spending does. In fact, classical economic theory says that to pull an economy out of a recession the government should spend more to stimulate it. Read Keyenes (can't remember how to spell his name, famous early 20th century economist). Thats how Clinton got us out of the recession of the early 90's. Raised taxes, spent more, balanced the budget, things were golden.

iccky · 05-14-2003, 11:20 AM

Quote:

I don't know if the proposed tax cut will help middle class Americans or not. Alls I know is instead of a cut, I wish they would just fix the unintelligible, bloated system altogether.

I'll drink to that. Much as I think that flat tax was a shitty idea, it would have made the tax system inteligable. Imagine how much money we could save on tax preparers alone. Tax fraud would be easily caught, no more tax lawyers. If he had made it a progressive income tax you could fill out on a post card I might have actually voted for him.

Simple_Min · 05-14-2003, 11:39 AM

Tax cuts and increase in military spending?
I wonder about what program is being cut or shortchanged.

reconmike · 05-14-2003, 03:16 PM

Quote:

Originally posted by Simple_Min
Tax cuts and increase in military spending?
I wonder about what program is being cut or shortchanged.

I hope it is the money for crack whores spitting out puppies like pez despensers.

And the third generation welfare bastards whose daddy's daddy didnt work so they very well are not going to start working.

james t kirk · 05-18-2003, 07:45 AM

Well, as an outside observer, all i can say is this.

You have a record deficit going right now - something like 500 billion dolllars a year.

A few years ago, the us had a record surplus and was the envy of the world.

I don't know about you, but i figure myself that before i go climbing into deeper debt, i should pay off the debt i have unless my revenue goes up, which it is not.

Deficits are killers.

You have to live within your means. Common sense dictates that you should not be having tax cuts in a deficit situation. If you have a budget surplus, hey great, but when you are in the red and there is NO plan to climb out of the red, you are in trouble.

If you want a tax cut, you need to cut gov't spending to a break even level.

You can't have your cake and eat it too.

05-12-2003, 09:34 AM	#1 (permalink)
fudd Upright	New tax cut??? Haven't been following the news...Does anyone know what Dubya's new tax cut will do (if anything) for the common man? Thanks.

05-12-2003, 09:56 AM	#2 (permalink)
Liquor Dealer Super Agitator Location: Just SW of Nowhere!!! In the good old US of A	It won't do much of anything. All it can do is put money back into circulation which causes people to go out and buy things which causes the seller to have to replace that merchandise with more which puts more money into circulation because the money paid to the manufacturer is gong to be used to pay stockholders and employees and to buy raw materials which are used to make the product that is sold back to the store so someone can buy it and by doing so put money into circulation which is used to create jobs and ................ It probably won't do much more than that. __________________ Life isn't always a bowl of cherries, sometimes it's more like a jar of Jalapenos --- what you say or do today might burn your ass tomorrow!!!

05-12-2003, 10:14 AM	#4 (permalink)
Liquor Dealer Super Agitator Location: Just SW of Nowhere!!! In the good old US of A	http://www.pbs.org/newshour/extra/te..._cut_5-07.html As I understand it, and I am by no means an accountant, one section will do the following: If Taxable income is $0-$6,000, you save: $0-$300 If Taxable income is $6,000 - $27,950, you save: $0 (no change in taxes) If Taxable income is $27,950-$67,70, you save: $838.50-$2,031 If Taxable income is $67,700-$141,250, you save: $2031-$4,237.50 If Taxable income is $141,250-$307,050, you save: $4237.50-$9211.50 If Taxable income is $307,050 or higher, you save: $11,053.80 or higher (I don't know where the quoted figure of $270 came from) This from a teacher's guide explaining one section: There are lots of sections. The following makes interesting reading http://www.ncpa.org/bothside/krt/krt010600b.html Bush's Proposed Tax-Cut Will Remove Six-Million Americans From Tax Roles ALEXANDRIA, VA. In a town notorious for spectacles, it is something to behold. Testimonies by the new found believers, the fire-and-brimstone sermons, and the brash choir belting out a high-flying refrain would have brought tears to the eyes of Jimmy Swaggart. But the "congregation" isn't in church; they are in Washington railing against tax relief because it was "fiscally irresponsible." Yet, opponents of tax cuts continue to demonstrate that they are still worshipping at the altar of big government, and their claim of having been "saved" is just a different verse from the old hymn book of government knows best. Instead of donning false frocks of fiscal responsibility, these new acolytes ought to take a page from their predecessors' book. In 1981, House Speaker Tip O'Neill proposed, in current dollars, a $1.3 trillion five-year tax cut to counter the $1.6 trillion tax cut offered by Ronald Reagan. At well over a trillion dollars, O'Neill's plan was billed as the "responsible" alternative. In contrast, the Congressional plan President Clinton vetoed last year would return only $792 billion over the next ten years, and it included a mechanism to limit the cuts if the projected surpluses do not materialize. Based on cautious economic assumptions, the plan currently proposed by Texas Governor George W. Bush would provide roughly $440 billion of tax relief over the next five years. With stern warnings that a tax cut would fuel the flames of inflation and would overstimulate the economy, these new disciples of austerity argued for saving the money and paying down the debt. Yet, they were willing to support President Clinton's plan that generated an additional $850 billion in new spending over the next ten years - on top of the $2.5 trillion increase called for under current budget projections. The Clinton scheme would have raised taxes by almost $95 billion and soaked up $750 billion of the budget surplus over the next ten years. A similar proposal is expected to be submitted this year. Research by National Taxpayers Union Foundation found that the legislative agendas of tax-cut opponents in the House of Representatives during the last Congress would increase federal spending, on average, by $115.9 billion per year. While opponents of the tax-cut sing the praises of their new-found faith, they remain filled with joy when the choir belted out that old familiar standard: "only the rich benefit." By definition, any plan to cut income taxes is likely to help those who do, in fact, have income. Even the IRS's own data show that the top tenth of income earners made 43 percent of the money in 1997 but paid 63 percent of the income taxes. I Ironically, the income cut-off for this "rich" group of taxpayers began at $79,000 - hardly in league with Donald Trump. Nonetheless, the Bush plan would still eliminate federal income taxes for a family of four making $35,000 per year, and it would remove over six million lower- and moderate-income families from the tax roll. Far from being risky or reckless, plans to give money back to taxpayers are modest, measured moves. Unfortunately for these new pastors of the public purse, taxpayers can separate those who have real faith in them from those who are only mouthing the words. Jeff Dircksen is Director of Congressional Analysis for the National Taxpayers Union, the nation's oldest and largest taxpayers' rights group. __________________ Life isn't always a bowl of cherries, sometimes it's more like a jar of Jalapenos --- what you say or do today might burn your ass tomorrow!!! Last edited by Liquor Dealer; 05-12-2003 at 10:20 AM..

05-12-2003, 10:21 AM	#5 (permalink)
4thTimeLucky Psycho Location: 4th has left the building - goodbye folks	Good economic lessons by both Liquor Dealer and maximusveritas. Whilst tax cuts are intended to work as Liquor describes, they often end up being scuppered by the phenomenon maximus eludes to. Give a poor man $100 and he will spend it all. Give a rich man $100 and it will accumulate interest in a bank. One could equally use Liquor's argument to respond to the question "what do taxes do?" It won't do much of anything. All it can do is take money out of (rich) people's bank accounts and use it on public spending, which requires the government to employ teachers and doctors, who need to be purchased equipment to work with and buildings to work in, which causes government to go out and buy things which causes the seller to have to replace that merchandise with more which puts more money into circulation because the money paid to the manufacturer is gong to be used to pay stockholders and employees and to buy raw materials which are used to make the product that is sold back to the store so someone can buy it and by doing so put money into circulation which is used to create jobs and ................ __________________ I've been 4thTimeLucky, you've been great. Goodnight and God bless! Last edited by 4thTimeLucky; 05-12-2003 at 10:24 AM..

05-12-2003, 05:22 PM	#7 (permalink)
The_Dude The GrandDaddy of them all! Location: Austin, TX	when are they going to figure out that tax cuts arent going to solve all the problems? __________________ "Luck is what happens when preparation meets opportunity." - Darrel K Royal

05-12-2003, 05:59 PM	#8 (permalink)
crewsor Women want me. Men fear me. Location: Maryland,USA	I don't know if the proposed tax cut will help middle class Americans or not. Alls I know is instead of a cut, I wish they would just fix the unintelligible, bloated system altogether. The tax book is what? About a quadzillion pages of gobbledygook. Its a crying shame it been allowed to evolve into the mess it now is. It should be scrapped altogether, and start fresh if you ask me. There has got to be a better system. Be it a National sales tax or a flat tax. The system as is, benefits only the wealthy and corporations who can hire lawyers and accountants to evade the burdon everyone else must bear. We need to create a fair, simple, system. Fat chance of that in my lifetime, huh? __________________ We all have wings, some of us just don't know why.

05-14-2003, 11:39 AM	#11 (permalink)
Simple_Min Insane Location: The Local Group	Tax cuts and increase in military spending? I wonder about what program is being cut or shortchanged. __________________ If liberty means anything at all, it means the right to tell people what they do not want to hear.

05-18-2003, 07:45 AM	#13 (permalink)
james t kirk Junkie Location: Toronto	Well, as an outside observer, all i can say is this. You have a record deficit going right now - something like 500 billion dolllars a year. A few years ago, the us had a record surplus and was the envy of the world. I don't know about you, but i figure myself that before i go climbing into deeper debt, i should pay off the debt i have unless my revenue goes up, which it is not. Deficits are killers. You have to live within your means. Common sense dictates that you should not be having tax cuts in a deficit situation. If you have a budget surplus, hey great, but when you are in the red and there is NO plan to climb out of the red, you are in trouble. If you want a tax cut, you need to cut gov't spending to a break even level. You can't have your cake and eat it too. Last edited by james t kirk; 05-18-2003 at 07:56 AM..