Tax Cut - Who Gets It

[Wonk]

New Thread:

I argue that why should our tax cut be limited only to INCOME taxes. If Bush says "those that pay the tax
hould get the tax cut," then we should cut the regressive payroll taxes (13% of income) as well.

Isn't that fair?


We're not talking about "Saving Social Security" in this thread. The argument that we can't cut that tax because it's SSI money is fallicious because it all goes into the same budget (and has since the 1960s). It's all revenue, it's all on-budget, and if we have to save some money for future needs, then that should come out of the tax cut EVERYONE gets, as described above.

[drisley]

I'm for that, but here's the difference: you would view that as an excuse to refute Bush's tax cut. That's where I lose you.

ALL taxes should be cut, which I'm sure you would agree with. The reason that payroll taxes has not been cut is purely political. For one, most of the people who are most subjected to payroll taxes are not the type of people who would bother to vote. They just don't care what goes on in Washington because they don't think it matters. So, the politicians don't have to worry about the votes and therefore don't worry about them. This is on BOTH sides of the aisle, not just GOP. Also, the politicians were worried about jeopardizing Social Security. they all love to talk abotu social security because the retired community is usually more politically active. The fact is that the payroll taxes IS a taxes for social security and medicare, so if you cut it, it could harm the system.

But, regardless of what you make, you DO pay income taxes. Usually you pay more in income taxes than you do in payroll taxes, regardless of income. It can be argued that if you factor in inherent costs of the employer covering 1/2 the full tax that the employee is indeed paying more. But, this is also refuted by the incredibly regressive nature of the Social Security payments. For lower-income workers, the social security benefits that will be made far outweigh the payments that were put in. So, you can't view the system as purely payroll taxes. You have to look at it form a total viewpoint, with the future benefits weighed in.

Payroll taxes is a pay-in to the entitlement program known as Social Security. And it is supposed to be self-contained.

Cutting income taxes is a cut to true taxes, not pay-ins. Everyone pays it, and those who make more money pay in a much larger percentage. So, Bush is offsetting his cut by giving low-income workers a larger percentage cut than those on the higher end of the income.

I'm getting a bit long-winded, but in short, I don't see why'd you have any problem with Bush's plan.

[bob]

I pay tax on food at Mc Donnalds. What ever happened to the luxary taxes. Oh I am paying them when I get my Big Mac.

[drisley]

Hehehe....

I'm for the flat tax. Simple, and nobody can play politics with it. Everybody pays the exact same percentage. No spin artist could refute it, but it'd be fun trying to watch them try. That, and doing some federal house cleaning. At least 50% of the gov't programs from Washington are total shit: there to suck up to some political group or perform countless "investigations" into problems they'll never solve.

[bob]

Flat income tax. Flat SS and Medicare tax for the feds.
Flat sales tax (have that now except food) for the state
Flat utility tax for the city (or better yet cities get funds from the state based on taxpayer population)
Flat polution tax - pay to polute
Only exemptions for charity and home or new business loan

That is fair.

[Edited by bob on 02-15-2001 at 08:29 PM]

[Wonk]

I'm not using it as an excuse to refute the tax cut. I'm saying that if we're going to cut all taxes based on the concept of who pays the tax gets the tax cut, then we should add the payroll tax into the formula.

Oh, and the people who are affected by the payroll tax
DO vote. It's just that their votes don't get counted. :)

<< The fact is that the payroll taxes IS a taxes for social security and medicare, so if you cut it, it could harm the system. >>

None of those taxes go for SSI, and we all know it. They all go into the budget. If we're worried about the future, then that should be part of our overall tax cut strategy, and it shouldn't mean that a payroll tax cut is off limits- it must may mean the payroll tax and income tax cuts can't be 15% each, that's all.

<< Usually you pay more in income taxes than you do in payroll taxes, regardless of income. >>

Not true. They don't break even until you reach income about $62,0000 (married, one dependent).

<< You have to look at it form a total viewpoint, with the
future benefits weighed in. >>

Oh, but Mr. Limbaugh and Mr. Snow and Mr. Hannity all say we'll never see the benefits. Are you saying they're lying to me?

<< So, Bush is offsetting his cut by giving low-income workers a larger percentage cut than those on the higher end of the income. >>

No, I've run the numbers and it's pretty much a "who pays the taxes gets the tax cut," but for income taxes only. There is NO slant towards lower income.

<< I don't see why'd you have any problem with Bush's plan.>>

Those who pay ALL the taxes aren't getting the tax cut, which is what he ways he wants. An easy modification of the plan would fulfill his promise.

__________________

[troysvihl]

taxation is theft. abolish them all and replace them with user fees.

[bob]

troysvihl, please send Drisley 1 dollar for your last post.

The tax cut that gives me 200 bucks from a 50,000 income does not cover the natural gas increases I pay in Calif because Texas companies are raping the Golden state.

Trickle down means pissed upon.

If the trickel down theory is correct all poor people should give all their money to the rich so they can spend it better and trickle it back like a used beer.

[drisley]

Votes not being counted....thats a subject for another thread. But, I'm right. A good portion of those lower-income guys don't vote. Remember, 50% of the people in this country didn't vote in the last election. Statistically, I would bet most of them fall into this low-income bracket.

What numbers are you using in your number-crunching? I've read the Bush proposal and it certainly does provide the largest percent reduction to the lower income folks. In fact, some of these lower income guys would end up paying NO income taxes.

In my view, Bush can't win either way. If he doesn't cut the payroll taxes, you guys say he doesn't care about the poor. If he did, the Dems would be screaming that he was tampering with social security. So, if these low-income guys are gonna get more from the system than they pay in anyway, why bother cutting the payroll taxes? The way the system is designed, it works out to the benefit of the poorer folks.

Anyway, it seems to me that you agree that bush's plan cuts the taxes for anyone paying taxes. Even if it only concentrates on income tax, it will benefit everyone based on the percentage tax bracket they are in. so, it seems to me you should be for the plan.

[drisley]

And bob, "trickle-down" theory is a correct assumption. The only way it would NOT be true is if the rich just sat on their money and didn't spend anything.

The "evil" rich are the ones who generally employ the working folks all the politicians love to care about. they also spend money that, in turn, requires working personnel to product the goods or perform the labor. So, if the rich havbe money, they spend it, and it benefits everyone.

It might not be politically correct, but its valid.

[troysvihl]

>>troysvihl, please send Drisley 1 dollar for your last post.<<

what do you mean?

and what does trickle down have to do with my post? and what does a tax cut have to do with increased gas prices?(assuming you bring it up in relation to my previous post)

I didn't say anything about only taxing the poor. i want all compulsory taxes eliminated.

[Edited by troysvihl on 02-16-2001 at 12:48 AM]

[drisley]

Sometimes bob strays off to where no man has gone before. ;) Sometimes I wonder where he gets this stuff...

[troysvihl]

drisley, any tax cuts to the wealthy are considered to be "trickle down" by the left. these are the same people that think "progressive" taxation is a good thing. these are also the same people that believe a flat tax is a regressive tax, even though by definition, a regressive tax has different rates for different amounts of wealth, while a flat tax by definition has an equal rate for all income brackets.

[bob]

I do not get it. Posted agreement for flat tax - all flat taxes not just income.

troysvihl, do you want to cut the military spending as you remove the taxes. The government owning resources and charging user fees - just how would that work. I am amazed.
Start with the user fee for the military - when do we get charged. Female logic.


drisley, where do I get my stuff? Well it is not cut-and-paste. Trickle down implies a rigid class system. I will go buy that Big Mac so my money will trickle down to the employee that served me the cold burger.

Do you write off the cost of a Big Mac on your taxes. Trust me, after write offs the tax rate on the rich is not as high as reported.

BTW $300,000 per year is still just the upper working class, not rich.



A big tax cut geared to the rich will trickle into the pockets of the politicans.


[Edited by bob on 02-16-2001 at 02:14 AM]

[troysvihl]

>>troysvihl, do you want to cut the military spending as you remove the taxes.<<

yes. i believe that a private system of defense is not only feasible, it's preferable.

>>The government owning resources and charging user fees - just how would that work.<<

a user fee could most easily be applied through a sales tax. although, if I had my 'druthers, the government wouldn't own any resources. all resources would belong to the private sector.



>>Start with the user fee for the military - when do we get charged. Female logic.<<

female logic? well, that's the first time i've ever been accussed of that. lol. a user fee for the military could be assessed much the same way that you or I are assessed insurance premiums.



>>BTW $300,000 per year is still just the upper working class, not rich.<<

I know this is wrong. You are considered "rich" by the IRS when you hit something like 80 or 90k a year.








>>A big tax cut geared to the rich will trickle into the pockets of the politicans.<<

I don't know about that. The last big tax cut to the "rich" back in '82 led to the longest period of sustained growth this country has ever seen. almost 20 years straight and counting. the increased economic activity also wound up creating more tax revenue, just as promised back in '82.

besides, if your worried about the current tax plan, i wouldn't exactly call it "big." it's acctually pretty small.

[Wonk]

I don't think it's true that poor people vote less than the rich. Dick Cheney didn't vote in the last several elections. Rush Limabaugh never voted for Reagan. I know a lot of upper-middle-class people who are "too busy" to vote.

<<you agree that bush's plan cuts the taxes for anyone paying taxes. Even if it only concentrates on income tax,>>

Those statements are in conflict- that's my point.

RE: User fees- note that most states that depend mostly on sales taxes are in big trouble right now, and have a hard time budgeting from year to year (TN, AL).

<<he last big tax cut to the "rich" back in '82 led to the longest period of sustained growth this country has ever seen.>>

(1)It gave us two recessions.

(2) GDP growth under Reagan/Bush was lower than that under Clinton, and is considered at or below the average of the post-war period. You can verify this yourself with government GDP data on the web.

Note also that the tax cut caused a FALL in income tax revenues that were not made up for several years. It is a myth that cutting taxes raised revenues (the only reason revenues didn't fall is that Reagan hiked the regressive payroll tax).

Go ahead. Dare me to provide detailed data. My nickname isn't Wonk for nothing. :)

[drisley]

Wonk, I am 100% positive that I am right in the voting patterns. And it goes right to education. If you don't understand gov't, you typically don't care to take part it in because its confusing. Well, those who don't get educated typically end up being low-income workers. Sure, you can find exceptions in people with money not voting, but I promise that, in general, you would find I'm right.

Also, I'm sure you could find examples of states not being able to pay the bills on sales tax alone. But, that doesn't mean you start a state income tax. It means you cut back on the useless gov't programs. Doesn't it seem financialy niave to keep on starting new programs and then shrug in frustration because you can't pay for it? Any fair-minded head of household knows damn well they can't do that, so why does our gov't?

Also, you're straying. I want to know you response to the Bush cut and what I said.

Troy, I have to point this out: a "private" military is not smart, and, in fact, the US Constitition specifially provides that the Federal Gov't is supposed to provide for defense. That is one of the few things the Fed is REALLY supposed to do, as opposed to the myriad of gov't programs that are unconstitutional. They'll try to fit anything and everything undr the two words "general welfare".

[Wonk]

<< Wonk, I am 100% positive that I am right in the voting patterns.>>

Then you should have no problem finding data to back it up, right? Don't give me your gut feelings, give me proof.

It's not relevant anyway- you were arguing that if people don't vote, they don't deserve a tax cut? Isn't that equivalent to paying people to vote?

RE: State taxes- the problem isn't that there isn't enough money or too much government, the problem is that the revenues fluctuate wildly, making it difficult to plan and run the organization.

[drisley]

That's not what I was arguing at all. I said that that was true in the politician's viewpoint, not mine. I explained, politically, why neither the Dems nor the Repubs really give a shit about it. They'll give it lip service all day long, but nothing'll ever happen on it.

And I'd still kinda like a response to my info on the Bush plan. :D

[troysvihl]

wonk and drisley - i live in TN, and the budgetary problems here are not b/c of fluctuations in revenue. revenue has been growing by a pretty decent pace of five or six percent a year. the problem is that spending rates increase at three or four times that each year. the state is doing all sorts of things that just shouldn't be done by goverment. namely providing health care and funding the university system. (there are other spending items it shouldn't be doing, but those are the biggest by far).

When I said a sales tax was a form of user fees, it is, but only a rudimentary form. I would prefer a system that kept the mechanisms to raise revenue close to the the spending programs that revenue is to support, and a general sales tax doesnt' do that. In other words, I don't think there should be a general fund. If a government wants to spend money on roads, then institute a gas tax or a toll system, but the money raised in such a way should go to only roads, not anything else. Wanna support a public schools system? then institute tuition rather than disguising it in the forms of property and income taxes. In this way, there is no comingelling of funds, and people can more easily decide what services they want from their government. It would eliinate compulsory taxes, which as I've stated before, I believe to be the equivalent of theft.



drisley - yes, i know that the production of defense is one of the few things the fed gov does that is acctually constitutional. i wasn't claiming it to be unconstitutional. As far as it being smart or not, i think reasonable people can disagree. most people believe that government is necessary to provide defense, but i believe that insurance companies could do it, and do it better. i believe that governments, even a constitutional republic, do not prevent aggression, but promotes it. And judging by the track records of governments, I think there is a bunch of supporting evidence. Governments have a vested interest in increasing their sphere of "protection" (and I use that term loosley) by any means possible.

[drisley]

On taxes, thats a good point. The biggest common denominator is that gov't is getting way too big, and it is allowed to happen by a dumbed down public who has come to expect the gov't to be the daddy they never had.

On the military, i believe that if our gov't followed the Constituion to the letter, there would be no risk of the Fed becoming over-powerful or using the military to expand protection. The problem is, now-days, that our politicians find the Constitution a barrier rather than a guide.

[jessho]

Texas does not have an income tax. It is solvent and has had surpluses in the last few years.


"...RE: User fees- note that most states that depend mostly on sales taxes are in big trouble right now, and have a hard time budgeting from year to year (TN, AL).

<
Go ahead. Dare me to provide detailed data. My nickname isn't Wonk for nothing....."

Please provide some sources that reinforce your comments. Include the revenues and budgets.

[Wonk]

<P>After Reagan's income tax cuts took effect in 1982, real income tax collections
took a long fall, despite the fact our economy continued to grow. For the
moment, let's ignore the fact that tax collections could have been expected
to grow after 1981. Let's simply use 1981 as a baseline, multiplying it
8 times, and compare that to what was really collected over the next 8 years.</P>

<PRE>Individual Income Tax Collections (millions) (1)
<B>Year Current Constant (87 dollars)</B>
-------------------------------------------
1981 $285,917 $367,692
1982 297,744 356,366
1983 288,938 332,033
1984 298,415 328,470
1985 334,531 354,677
1986 348,959 359,307
1987 392,557 392,557
1988 401,181 387,128
1989 445,690 411,533
-----------------------------
82-89 total: 2,922,691
1981 (times 8) -2,941,536
-----------------------------
Net 8-year loss -18,845

Corporate Income Taxes (millions)
<B>Year Current Constant (87 dollars)</B>
-------------------------------------------
1981 $61,137 $78,623
1982 49,207 58,991
1983 37,022 42,544
1984 56,893 62,623
1985 61,331 65,024
1986 63,143 65,015
1987 83,926 83,926
1988 94,508 91,224
1989 103,291 98,092
------------------------------
82-89 total: 567,439
1981 (times 8) -628,984
------------------------------
Net 8-year loss -69,545</PRE>

<P>Combined individual and corporate income tax loss: $88 billion. <BR>
<BR>
Keep in mind that this does not count the lost revenues that could be expected
from a <I>growing</I> economy. When you consider that fact, the fall or revenues
is more along the lines of $400B to $600B.

The "Reagan Miracle" is a myth.

[drisley]

What was the point in that? What are you trying to prove?

and this is "loss revenue" from who's point of view?

[Wonk]

Just proving that Rush, Hannity, O'Reilly, and all those other robots on Fox are total liars when they talk about how Reagan's tax cuts raised revenues.

I don't want to start a discussion about bigger government (so don't try). That's a matter of opinion. I am simply trying to balance big whopping lies with facts.

[drisley]

Well, if you're talking about gov't revenues, who the hell cares?! They get enough revenue as it is.

Anyway, my last question to you was about the Bush tax cut, and you're off smashing Fox. Whatcha think of my posts on the Bush tax cut?

[Wonk]

<< They get enough revenue as it is. >>

You obviously can't read. I said that wasn't my point.

<< Whatcha think of my posts on the Bush tax cut?>>

I thought I answered this:

Wonk: "Those who pay ALL the taxes aren't getting the tax cut, which is what he ways he wants. An easy modification of the plan would fulfill his promise. "

Am I missing something?

[jessho]

http://www.mnsfld.edu/depts/lib/census.html#data

Here you go. Real data.

[drisley]

Yeah, wonk, there was more to my arguement and I think you conveniently ignored it.

[Wonk]

I don't conveniently ignore anything. Why don't you TELL ME what I'm missing, so I can respond to it???????????

(Does anybody else know what he's talking about???)

[Wonk]

OK, I see a link to the U.S. Census. What are we looking for that relates to tax cuts and revenues?

I'm glad no one can argue with my proof that tax cuts don't raise revenues (e.g., supply side is a LIE).

Thank you, thank you... (applause)

[drisley]

Nice of you to show up and get this thread going again. I was beginning to wonder... =)

I'll have to refresh my memory here, but what does that arguement have to do with the benefits of Bush's tax cut? You can claim a cow has four legs and than claim victory if you want, but my arguements for the tax cut went undisputed by you. You went off on payroll taxes and stuff like that, but you gave no solid reasoning for why to say "no" to the cut.

[troysvihl]

wonk, all your numbers show me is that tax cuts aren't the problem when it comes to the budget. Your table shows a deficiet of a couple of hundred billion, yet the real deficiet is much higher.

That table is also a bit deceptive in that it only shows the data for income taxes and not any other source of federal income, such as the resulting increase in trade duties or the increase in SSN and medicare taxes that go along with the increased economic activity. The fact of the matter is, over that period of years the federal deficiet wasn't an income problem, but a spending problem.

The reason that we have had almost two decades of stagering economic growth is the tax cuts of 1982.

[Wonk]

I don't think I every said we shouldn't have a tax cut. I simply said that if we're going to have one, let's cut the taxes based on who pays the taxes. Would you not agree? Bush's proposal doesn't do that.

(I can't respond to 'why to say "no" to the cut' when you put those words in my mouth, you know)



<< That table is also a bit deceptive in that it only shows the data for income taxes>>

Because that's what we cut. The supply-side argument is that if you cut income taxes, revenues will rise. The only reason they rose (and slowly at that) is that we hiked payroll taxes. Trade duties would not have made a drop in the bucket.

<< The reason that we have had almost two decades of stagering economic growth is the tax cuts of 1982.>>

Staggering? Growth in the 1980s, when averaged out, matched the HISTORICAL post-WW2 average of 2.7%. The Clinton era beat that, primarily because his tax hike cut the deficit and relaxed capital markets. The only thing "staggering" is George W. Bush after a bender.

Capital markets, you say? Let's say you want to start a business. Well unless you inherited a few million dollars, you have to go to a bank or other lender, present a business plan, and get a loan. The profit from your first several years in business has to go towards paying that loan. Same thing applies if you have a business and you need to expand. Interest rates are a big portion of that payment. Thus, interest rates can be key to how many new businesses start up and at what rates businesses expand. Business profit and loan payments are often very close to each other. If starting a business, making a profit, and paying down a loan was TOO easy, everybody would be doing it The system naturally expands to a point, and that point is limited by (1) the market opportunities and (2) the interest rate. When interest rates fall, it's easy to start/expand business.

Now, the lump of money available for lending isn't unlimited. That's what we call the "capital marketplace." The more people that want to borrow, the higher interest rates (the cost of borrowing that money) go. That's that 'supply and demand' think you've probably heard about. Now, when Big Government walks in and needs to borrow $290 BILLION a year, that creates more demand, and raises costs/interest rates. The opportunity for new businesses falls. When BigGovernment gets its act together, as it did in 1993, and stops borrowing money (and even returns it), interest rates drop, and new businesses can flourish.

[troysvihl]

i think you overestimate the power of monetary policy and underestimate the power of fiscal policy. I do not agree that the primary reason for the growth of the 90's was due to Clinton's tax hike.

[bob]

Supply siders beleive that cash in the hands of the upper 10% of the income earners creates more business than lower interest rates. They would set a dollar limit per person on taxes if they could. They really beleive that money in the hands of people that already have money is better spent.

[troysvihl]

yup, that's pretty much what supply-siders believe bob.

[drisley]

Originally posted by Wonk

I simply said that if we're going to have one, let's cut the taxes based on who pays the taxes. Would you not agree? Bush's proposal doesn't do that.
Bullshit. Where'd you get that idea? His tax plan DOES cut taxes for everyone who pays it. If you're complaining about not cutting the payroll taxes, well hell, it was your Liberal Democrat freinds who took it upon themsleves to start using that money to fund other programs and then vote to raise the tax in order to fund their entitlement programs. Believe me, if it were up to me, I'd alleviate the payroll taxes altogether. But, I don't see how you can bitch and moan about Bush not cutting it when it was the Democrats who put it there to begin with (which I'm sure you'd support again).

Sorry, Wonk, but every excuse the DNC can generate is idiotic, and I think that made itself apparent in the lame Democratic response to the speech the other night. Same old crap, same old tactics. The tax-and-spend party doesn't want to let Americans keep their own damn money and its obvious as hell. I expect the Democratic party to suffer polically if they don't support it to at least some degree because, quite frankly, the Bushie is running circles around the Democrats right now.

[bob]

Social security and medicare should be combined with the general tax rate. Then the tax cut would be fair