Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Toad on January 23, 2002, 12:05:38 AM
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From CNN:
"Daschle, D-South Dakota, said he wants to bring up an economic stimulus bill with four provisions:
-- An extension of the 26-week unemployment benefit by another 13 weeks.
-- Payroll tax rebates for those who do not pay income tax and therefore did not receive a check last year.
-- Tax breaks for businesses by allowing them to accelerate tax deductions for equipment.
-- Money to help states, most of which are running budget deficits. "
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Now THAT'S funny!
How do you get a tax rebate if you paid no taxes?
Hey, if some folks truly NEED money, let's help them.. but let's not BS about what it is... it's Welfare, plain and simple.
This is the kind of "DC Doublespeak" we would all be better off without.
The rest of it?
Extend unemployment? Sure, why not. The fargin' Congress has been sittin' with it's collective thumb up it's a** so long that this recession is going to last a while longer.
Tax breaks to business for equipment? Sure... as long as the Exec's don't give themselves big fargin' bonuses for buying it and they buy it from US manufacturers (US tax money, US jobs.. no offense meant to the rest of the world ;)), why not?
Help the states? Yeah, help them do things that matter and will last, like help them pay for infrastructure [roads, bridges, schools, etc.]
My .02. Write your favorite Dipsh*t in Congress and tell him what you think. Let 'em know you're watching. They love to hear from us. :D
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Tax breaks to business for equipment?
Define equipment....
Like the new Caddy for the boss?
The company jet or holiday home?
Viva la revolucione!;)
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C'mon, Seeker. Sure, businesses could possibly abuse the system and attempt to misuse tax credit for frivolous items- but it isn't that easy.
Tax rebates to those who paid no taxes? That's a handout pure and simple, and thinly veiled at that. He either thinks we're too stupid to understand or there's enough people in the category to care.
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They want stimulus?
Try this... FLAT TAX. No excemptions, no exclusions, no IRS.
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Originally posted by Sandman_SBM
They want stimulus?
Try this... FLAT TAX. No excemptions, no exclusions, no IRS.
A good liberal does not want a flat tax Sandman.
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Originally posted by Sandman_SBM
They want stimulus?
Try this... FLAT TAX. No excemptions, no exclusions, no IRS.
Boy that would be nice 10-15% across the board. That or a national sales tax would be the best option for us. I prefer the national sales tax because you get all the black market money too.
But I don't thinke the democrats will allow those kinds of tax structures. They are too fair and there would be no need for the IRS. Maybe one day, but I doubt it. You don't even hear republicans pushing either of these anymore :(
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Originally posted by Ripsnort
A good liberal does not want a flat tax Sandman.
LOL!
I don't feel like a bad liberal. Funny, I don't feel like a good conservative either.
Oh gawd! I've been disenfranchised!
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There there Sandman.....the correct path to get home is on the left.
A flat tax puts a significantly harder hit on people with a lower income. A national sales tax would be detrimental to the economy as it would by definition be inflationary. (raising prices without raising value).
:cool:
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Tahgut, at the risk of going slightly off topic, why do they call Santa Monica "The peoples Republic of Santa Monica"....I've heard that referenced more than once in both writing and radio (no, not Rush, he's entertainment, not to be taken seriously, IMO)
I'm assuming because of the cities tendancy to swing slightly towards communism, but what exactly are they doing down there that directs comments like this? Honestly, I don't know the history of Santa Monica .
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Originally posted by midnight Target
A flat tax puts a significantly harder hit on people with a lower income. A national sales tax would be detrimental to the economy as it would by definition be inflationary. (raising prices without raising value).
:cool:
I have to disagree :)
If a flat tax was based on the level of the lowest tax payers they would not pay more. Sure they wouldn't pay less, but it would be a fair system. This is the main reason I don't support it, I know realisticly that not enough Democrats in congress would ever vote for this to pass it into law, a real shame too.
A national sales tax would increase prices without increasing value, you are correct sir. But what you're not taking into account is all the extra money people would have from not paying an income tax. This would be a HUGE[/i][/u] ammount of cash money, about $5,000 to $7,000 each year for me alone. In my dad's case he would save about $40,000 a year!!!!!! and he is by no means a rich man, though he would be alot closer if the government didn't rape him each year. With that money my dad would invest and earn much more than that, which would mean more money to spend. :) People would spend more if they have more, that's a truth proven by history and common knowledge (ie. the old saying "the more you make the more you spend) You'd have whole segments of our population who don't pay taxes having to pay, ie the drug dealers, people who get alot of cash tips, people who don't pay income tax (weazel). The coffers would increase (ok that part is hypothisis but it seems pretty common sensicle to me)
But you know beyond that, I wouldn't mind paying income tax if they would just spend the money wisely.
-- Payroll tax rebates for those who do not pay income tax and therefore did not receive a check last year. [/i]
What the hell is that? We're at war and Dashel comes out with pure bread wealth distrobution? The economy is in reccession and needs some relief from the government and this is what he comes up with? How about not giving people who didn't pay taxes a rebate and giving it to the people who actually earned it? Why is that such and evil concept? I'm not trying to be sarcastic either. I know both sides play political games, but to be honest I don't see any republicans doing this right now. I'm not saying they aren't I'm just saying I haven't seen it. We need tax relief now, not in 2 or 3 or 5 or 5 years like the "tax cut" they past last year, but on our next paychecks. I had to stop putting into my 401k because I need money and I didn't get a raise this year (yet hopefuly) because of the slow economy. That hurts me in the long run.
Look at history, Kenedy proved it in the 60's, Raygun :D proved it in the 80's. If you lower tax burdon, tax revenues will go up. Call it trickle down, call it Reaganomics, call it what ever you want the fact remains that it works, and has been proven in history. AHHHHHHHHHHHHHHHHHHHHH ARRRRRRRRGGGGGGGGGGG I'm forgetting about pork barrel legislation, never mind it will never work. Our government has no self control :(
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Well, actually I was focusing more on the "doublespeak" which both sides engage in regularly. I see the thread has turned more towards a "how to tax" vein, though.
How about a "combo" flat tax and national sales tax?
You can exempt the lower income folks from the flat Income tax in the same way we do now. Pick a level of income and those below that don't pay at all. Would sort of ameliorate the hit on the truly needy right?
You could theoretically keep the flat tax on the rest in the reasonable range by using a national sales tax. The benefit here is that you DO get a piece of the action on the "black market money". When the drug lords buy a new Benz they have to chip in. Again, you can exempt items, like food and prescription drugs, etc. to lessen the hit on the truly needy. Put the National Sales Tax on the "luxury" or "convenience" items, not the necessities. Vacation to Disneyland? Pay up.
The real obstacle would be the total destruction of the "H & R Block" part of our society and all those IRS guys sitting around twiddling their pencils. Don't think the Congress will go for those. ;)
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I moved to Texas, from California, about 11 years ago. My main reason for doing so, was that it was cheaper to live here. What is interesting about this, is that Texas has no state income tax at all. Don't try to tell me a sales tax wont work. I have lived it.
Also, a sales tax is a flat tax, of sorts. We all pay the same for a gallon of gas. And there is a tax man standing beside every pump. That tax hurts the poor far more then the wealthy. The government should stop taxing energy in all its forms (food,fuel, electricity) all together. Other than that, a sales tax would work.
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You guys are missing the reasons why it's a good idea to offer payroll tax rebates to those who don't pay income tax. Toad, this goes back to when I stated in an earlier thread that the federal government can control aggregate demand through interest rates and taxes. You mistook that to mean raising taxes, but it also means lowering taxes.
Those in the lowest income bracket live paycheck-to-paycheck. They tend to spend whatever money they earn immediately on necessities -- bills, mortgage or rent, food, etc with little or nothing left over. When you cut their payroll taxes and effectively provide them with more money to spend, they will spend it. If you cut payroll taxes for the wealthiest individuals, there is no guarantee they'll spend the money rather than put it into savings. The result of cutting payroll taxes on the poor is that we expect aggregate demand for goods and services to increase almost immediately. The secondary effect of this is that businesses will need to employ more people in order to meet this heightened demand. That means more jobs, lower unemployment, and a stronger economy.
If I'm not mistaken, a number of economists as well as former Treasury Secretaries have come out in favor of reducing payroll taxes on those earning the least income for exactly these reasons. It's not "witty," nor is it a handout as Kieren suggests. What it is, believe it or not, is good fiscal policy from a suppy/demand perspective.
-- Todd/Leviathn
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At this rate I would be happy with any tax structure that does not by its complexity wastefully create an entire sector of th economy that does nothing except try to interpret that structure.
Talk about wasteful....
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There is a Beast which moves about our great land...a Beast which will not stand for a flat tax or a national sales tax.
That Beast is comprised of Tax Lawyers and CPA's.
Our little family owned business here in KC, which I work for, has a net worth of over 180 million dollars....we cannot exist without several tax attorney's and CPA's due to the U.S. Tax Code.
It will never happen.
Midnight....
and our current tax system is not inflationary? That was a good one:)
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-- An extension of the 26-week unemployment benefit by another 13 weeks.
-- Payroll tax rebates for those who do not pay income tax and therefore did not receive a check last year.
He wants these two past as 85% if not 95% of those who would benefit from them are probably registered democrats, uh, if they are registered at all ....
They want a poor economy for about 9 more months, with as many out of work as possible so they have a platform to run on.
"Bush and da Republicans Put Ya Outa Work (or kept you unemployed - which is probably the case :) ) With dat Tax Cut for da RICH!"
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Yeah Rude, it's stuck and it's exceedingly depressing. Also a little disturbing, I'd bet you $1000 there is not a single person in congress that even knows the entire tax code.
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Originally posted by Eagler
He wants these two past as 85% if not 95% of those who would benefit from them are probably registered democrats, uh, if they are registered at all ....
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So? And policies supported by Republicans benefit those who are probably 85% to 95% Republican. It's a bit disingenuous to complain about one and not the other.
They want a poor economy for about 9 more months, with as many out of work as possible so they have a platform to run on.
[/B]
Then why support a policy that increases demand and, as a consequence, decreases unemployment. Explain to me how a payroll tax cut creates unemployment. Explain how a tax cut on the wealthiest reduces unemployment. Economic theory just does not support your position.
-- Todd/Leviathn
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It's a handout. I am not saying you aren't right about how it might be used, but it's a handout. Calling it a tax rebate, when in fact you never paid taxes? Rebate means you get back something you've already given.
Nobody likes that ugly word, so we dress it up.
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Originally posted by Dead Man Flying
You guys are missing the reasons why it's a good idea to offer payroll tax rebates to those who don't pay income tax-- Todd/Leviathn
I must assume here that you are talking about "immediately refunding withholding" or simply not withholding from their pay.
Otherwise, I don't see what you are driving at.
After all, anyone who does not pay income tax obviously has all pay previously withheld refunded to them after they file April 15, correct?
This isn't what I get from Daschle's statement, however. Do you have clarification on what Daschle said then?
Originally posted by Dead Man Flying
. You mistook that to mean raising taxes, but it also means lowering taxes.
Well, we were discussing it in the Democratic context too. So far, I havent' seen ANY calls for a reduction in taxes across the board from Senator Daschle and his compatriots.
If we're talking about immediately refunding taxes... that have already been withheld.... from people who will pay no income tax anyway and thus have these monies refunded after they file... I agree. No problem there.
If you want to stop withholding on folks that are obviously or most likely not going to pay any Income Tax, I have no problem there either. After all, that situation is just a paper shuffle waste of time, isn't it? However, proper (well, OK.. improper :D) use of the W-4 form can essentially eliminate withholding (but not filing) anyhow.
If however, we are talking about redistributing income from higher earning taxpayers that pay the vast majority of all Income Tax to those who pay no tax... well, that's not at tax rebate or a return of withholding. That's a transfer-of-weatlh Welfare payment. As such, it should be called for what it is.
Note once again that I support the idea of helping people who do need help. Let's just call it for what it is.
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both line items I listed are Handouts, what dumcrats are best at ..
keep em dumb & happy, they'll vote dumbocrat everytime...
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Rip,
Santa Monica was going to pass a law that required a "living wage" be paid to all employees working within the city limits. This is just an illustration of the city's politics. I think the minimum wage in SM would be $10.50 per hour. I don't know if it ever passed. I live about 80 miles from there and culturally 1000 miles from there.
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Originally posted by Toad
If however, we are talking about redistributing income from higher earning taxpayers that pay the vast majority of all Income Tax to those who pay no tax... well, that's not at tax rebate or a return of withholding. That's a transfer-of-weatlh Welfare payment. As such, it should be called for what it is.
[/B]
I only know what you've shown me about the specifics of Daschle's plan. I would have figured that the payroll tax cuts would come from money invested into SS. Here's a good website discussing this sort of stuff: http://www.house.gov/jec/fiscal/tx-grwth/payroll/payroll.htm .
Note once again that I support the idea of helping people who do need help. Let's just call it for what it is.
What's funny is that I don't see this as "helping people" or even redistributive. If you look at it in a macro-economic sense, it's an effort to increase demand and, subsequently, increase employment to meet that demand. The other side of this coin would be interest rate cuts, which are meant as disincentives to middle and upper class individuals to horde money in the bank and as incentives for them to either spend the money or invest it. As low aggregate demand currently plagues our economy, efforts to increase it by different means surface. The Daschle proposal struck me as less helping those in dire need and more about stimulating demand.
Edit: Fixed the link.
-- Todd/Leviathn
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Originally posted by Eagler
both line items I listed are Handouts, what dumcrats are best at ..
keep em dumb & happy, they'll vote dumbocrat everytime...
I see you didn't respond to any of my previous points. Care to actually respond intelligently, or will I have to accept such witticisms as the best you can offer?
-- Todd/Leviathn
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Originally posted by Dead Man Flying
. I would have figured that the payroll tax cuts would come from money invested into SS.
-- Todd/Leviathn
Apparently you are correct.
My inability to speak "Washingtonese" is clearly highlighted.
I thought Daschle was talking about refunding Income Tax. I was wrong, apparently.
http://WWW.CENSUS.GOV has this to say about "payroll taxes":
"Payroll taxes are payments for social security old age, survivors, and disability insurance, and for hospital insurance (medicare)."
So, I must assume Daschle is talking about rebating Social Security tax and Medicare withholding to those who don't pay Income Tax.
This is a totally different proposal than what I had thought, obviously.
I'll think about this a while; no Social Security or Medicare tax obligations... yet full benefits no doubt... for those who do not pay income tax. Free Social Security and Medicare.
Clearly a different spin on these two programs than what we're used to seeing.
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Originally posted by Dead Man Flying
Then why support a policy that increases demand and, as a consequence, decreases unemployment. Explain to me how a payroll tax cut creates unemployment. Explain how a tax cut on the wealthiest reduces unemployment. Economic theory just does not support your position.
-- Todd/Leviathn [/B]
point is todd, I was suggesting most of the unemployed vote democrat
why does someone who pays ZERO taxes deserve a "TAX" refund of MY money???
hand outs, pure and simple, as soon as they blow the couple hundred bucks (MY $$$) on booze and smokes, they'll be standing around looking for the next dumcrat hand out, instead of looking for a job and carryin their own weight.. all the while diggin into the pockets of those who could produce the jobs needed for the very ones who are standin around waiting for the next freebie ... is that clear enough for ya?
If you think Dashole (thanks Udie) makes sense, there's no sense in talkin to ya
edit: ok it seems he wants MY SS to pay for theirs, sheesh its a freakin shell game... make em carry their own weight, like the rest of us. Period.
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Originally posted by Toad
I'll think about this a while; no Social Security or Medicare tax obligations... yet full benefits no doubt... for those who do not pay income tax. Free Social Security and Medicare.
[/B]
If you check out the link I sent, you'll see where it mentions that SS was designed this way; lower income contributors receive a disproportionate return, with much of the burden borne by middle and upper class individuals. Social Security was designed this way because, as I mentioned, lower income families tend to live paycheck-to-paycheck without savings. Redistributive to be sure, but this predates Daschle by almost 70 years. Cutting the payroll tax rate on lower income families doesn't shift the burden more to middle or upper class families unless their payroll tax rates increase proportionately; as it stands right now, the proposal simply decreases the money going into the SS fund overall without shifting the tax burden upward.
In other words, I can see where middle and upper class individuals are angry because the proposal doesn't include them, but to argue that it benefits the lower class at the expense of the others isn't true.
And no problem on the net burp. :)
-- Todd/Leviathn
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Originally posted by Eagler
point is todd, I was suggesting most of the unemployed vote democrat
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You'd be right. There's a strong relationship between income and partisan affiliation.
why does someone who pays ZERO taxes deserve a "TAX" refund of MY money???
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This is where you're wrong. See my post to Toad above -- a payroll tax cut would involve slashing the SS contribution rate of lower income individuals. Unless this coincides with an increase in your payroll tax, it's not your money being refunded.
hand outs, pure and simple, as soon as they blow the couple hundred bucks (MY $$$) on booze and smokes, they'll be standing around looking for the next dumcrat hand out, instead of looking for a job and carryin their own weight.. all the while diggin into the pockets of those who could produce the jobs needed for the very ones who are standin around waiting for the next freebie ... is that clear enough for ya?
[/B]
Think hard about this now. You're wrong on a number of counts.
First, the payroll tax cut only benefits those who already hold jobs. By its very definition, a payroll tax is a tax on the payroll. If you're not on a payroll, you don't pay it. If you're not on a payroll, you don't receive the benefits of a payroll tax cut. How does this in any way encourage joblessness?
Second, jobs don't appear out of thin air. Even if you provide money to wealthy individuals or firms in the form of tax breaks, they won't produce items or increase employment unless aggregate demand increases. If the public demands 20,000 cars, how would producing 25,000 cars benefit the economy? All it will do is drive down prices and earnings, and it would result in layoffs to meet the equilibrium supply and demand level. If, on the other hand, you increase demand to 25,000 cars, corporations will hire the people necessary to produce that many.
Third, even if lower income workers spend all of the extra money on smokes and booze... good! This increases the demand for smokes and booze, and it creates new jobs in the tobacco and alcoholic beverage industries to meet the increased demand. Result: The economy improves.
If you think Dashole (thanks Udie) makes sense, there's no sense in talkin to ya
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His proposal is economically sound, even if it's more motivated by politics than fiscal responsibility. I've heard this proposal batted around in the last few months, and numerous economists and former Treasury Secretaries support it. I think that, coupled with corporate tax relief and low interest rates, it would go a long toward helping the economy.
edit: ok it seems he wants MY SS to pay for theirs, sheesh its a freakin shell game... make em carry their own weight, like the rest of us. Period.
Your SS won't pay for theirs unless their payroll tax cut is offset by a proportionate increase in your payroll taxes.
-- Todd/Leviathn
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I'm sure there are better things that could be done, but it's undeniable that Daschle's provisions WOULD stimulate the economy.
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Give it up DMF.
Ain't nobody is gonna change thier mind about anything, regardless how good of an argument you present.
Everyone knows that democrats are for poor/unemployed/blacks/immigrants/crinibnals while Republicans are for "good folks"
So based on last election, about half of this country is some really f____d up people....
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Originally posted by funkedup
I'm sure there are better things that could be done, but it's undeniable that Daschle's provisions WOULD stimulate the economy.
Well I don't hate it as much if it is the payroll vs income tax thing. But is it stimulating the right part of the economy? Who spends more, the poor or the middle class? And if they aren't paying in to SS or MC but recieving full benifits that is a handout, albeit one that I don't mind so much as it's not cash in hand perse. I guess he's getting on the right track, though I reserve the right to reverse that statement..... In reality they play us for fools. I doubt if what we've said here ever seriously gets debated up in DC.
Boggles my mind to think how somebody goes to Washington with little money and 15 yrs later they retire a millionare. I think they have a secret scam that puts our tax dollars directly into their pockets. Boy let somebody ever find out that is true, the country might actually yawn. :mad:
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Could somebody do me the favor and tell me if Fdski's post added anything relivant to this conversation or was it more smart bellybutton remarks? I have a fealing he painted us conservatives with that same old used up brush he's been using....
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Originally posted by Udie at Work
Well I don't hate it as much if it is the payroll vs income tax thing. But is it stimulating the right part of the economy? Who spends more, the poor or the middle class? And if they aren't paying in to SS or MC but recieving full benifits that is a handout, albeit one that I don't mind so much as it's not cash in hand perse. I guess he's getting on the right track, though I reserve the right to reverse that statement..... In reality they play us for fools. I doubt if what we've said here ever seriously gets debated up in DC.
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The problem with targetting the middle class instead of the poor with a payroll tax cut is that there's no guarantee that the middle class will spend it. During tight economic times where people fear for their jobs, those who can save money usually do save money. Money saved is money unspent -- if it sits in the bank earning interest, demand hasn't increased at all. Cutting payroll taxes for the middle and upper classes presents a possible double whammy for the federal government: decreased SS intake with no benefit to the economy. What we do know for sure is that those in the lower income levels tend to spend all of their paychecks to meet life's necessities -- food, rent, clothing, etc. Whatever money they receive from a payroll tax cut will most likely be spent on these necessities rather than saved. Increased money + the need to spend it = increased demand for goods and services. Increased demand means increased production to meet it, and corporations will hire as many new employees as necessary to increase output to meet the higher demand.
Could somebody do me the favor and tell me if Fdski's post added anything relivant to this conversation or was it more smart bellybutton remarks? I have a fealing he painted us conservatives with that same old used up brush he's been using....
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I guess you'll need to unsquelch him to find out. ;)
-- Todd/Leviathn
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I did read the link. A "supply sider"; I'm a bit surprised. ;)
Todd: Cutting the payroll tax rate on lower income families doesn't shift the burden more to middle or upper class families unless their payroll tax rates increase proportionately; as it stands right now, the proposal simply decreases the money going into the SS fund overall without shifting the tax burden upward.
So tell me... if the bottom income earners stop paying in and no one else contributes more... what happens then? Social Security in a "lockbox"? Social Security "protected"?
We simply get to the point where the SS Trust Fund cannot meet its obligations that much sooner, right? In fact, probably MUCH sooner.
Would this be Daschle calling for more "deficit spending?" Wasn't he just bashing the Reps for this? ;)
Secondly, let's remember that ORIGINALLY if you didn't pay into SS, you could not recieve SS payments. For a while, my pilot group did not participate.. and thus were not elegible for SS.
What we're doing here is setting a precedent, is it not? Won't this be the first time that folks who stopped paying in while employed will still receive benefits?
This is a MAJOR revision to SS policy, isn't it? I'm not sure this is an entirely good idea. Seems like one more sneaky step into the "welfare state". If we're going to go that way, let's get it out on the table without the camoflage.
BTW, I'm pretty sure I don't agree with your hypothesis that you can't trust the middle class to spend the money. ;)
I'll wager the records of the credit card companies and banks/mutual funds/stock brokers would show that the "middle class" is heavily in debt and continues to spend while their savings and investments are a paltry percent of thier income.
In short, the "middies" are spenders, not savers.
Guess it depends on how you define middle class. Seems like to Daschle anyone making $50,000+ is excessively rich. ;)
BTW, for those of you who thirst for knowledge and find this SS debate interesting, I suggest:
Brief History of Social Security (http://www.ssa.gov/history/briefhistory3.html)
It starts with the Greeks (but it does move fast) and it pretty clearly shows how far we've drifted from the original intent of SS as first enacted.
"As President Roosevelt conceived of the Act, Title I was to be a temporary "relief" program that would eventually disappear as more people were able to obtain retirement income through the contributory system."
Oops... not quite Franklin. :D
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DMF
thanks for keeping your cool and the rational explanation.
I get alittle excited at times :)
it still sounds like another robin hood move to me, robbing peter to pay paul, while paul is your voter...
seriously, I think the gov needs to stay out of it - both parties. they are already up to their necks. I think the economy will get along just fine the farther they step back.
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LOL D'oh! I just realized that I'd posted the wrong link. I bet a lot of you guys were scratching your heads about what I was referring to in that link when, in fact, it wasn't even there.
http://www.house.gov/jec/fiscal/tx-grwth/payroll/payroll.htm
That's the one I meant to post. I thought I'd set it to copy, but it pasted an older link I'd copied instead. Mea culpa. :) This should help everyone make more sense of my argument. I'll go back and fix it in the original post as well.
-- Todd/Leviathn
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Originally posted by Toad
I did read the link. A "supply sider"; I'm a bit surprised. ;)
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Hehe, that's not the link I intended. I sent to that someone on ICQ earlier to explain a bit of supply and demand to them. Not sure why the link I meant to send didn't paste properly. In any event, it's fixed now. :)
So tell me... if the bottom income earners stop paying in and no one else contributes more... what happens then? Social Security in a "lockbox"? Social Security "protected"?
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I think it's a short term versus a long term strategy toward Social Security. If you have a lot of unemployed people, the SS fund receives substantially less money than if there are lots of employed people. After all, if you're not on a payroll, you're not paying payroll taxes. The idea behind cutting payroll taxes on the segment of the population whose spending patterns will most impact the overall economy is that, in the long run, it creates more employment. More employment, in turn, means more money for SS via payroll taxes. The best thing for SS in the long run is a strong economy, so short-term payroll tax cuts or rebates help the bigger picture.
We simply get to the point where the SS Trust Fund cannot meet its obligations that much sooner, right? In fact, probably MUCH sooner.
Would this be Daschle calling for more "deficit spending?" Wasn't he just bashing the Reps for this? ;)
[/B]
A strong economy is the single best thing for increasing the longevity of SS. The more people who are working, the more people who are paying payroll taxes. It's doubtful that SS would go bankrupt in the interim period between slashing payroll taxes for the poor and the economic stimulus this creates, and in the long term it more than pays for itself.
What we're doing here is setting a precedent, is it not? Won't this be the first time that folks who stopped paying in while employed will still receive benefits?
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My understanding is that it wouldn't be an elimination of payroll taxes for those who didn't pay income tax, merely retroactive rebates for the difference between the new tax rate and the old one. Correct me if I'm wrong.
This is a MAJOR revision to SS policy, isn't it? I'm not sure this is an entirely good idea. Seems like one more sneaky step into the "welfare state". If we're going to go that way, let's get it out on the table without the camoflage.
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I'm pretty certain steps like this have been taken before -- not an elimination of payroll taxes, but certain reductions in them at all levels. Like I stated before, taxes can be used to adjust levels of aggregate demand, so increases and decreases in all sorts of taxes aren't entirely uncommon throughout the years.
BTW, I'm pretty sure I don't agree with your hypothesis that you can't trust the middle class to spend the money. ;)
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It's not that we can't trust them... it's just that overall spending generally declines with economic downturns for a variety of reasons except for those who have no choice but to spend their money. Lower classes are more of a sure thing when it comes to economic stimulus because their income goes toward maintaining a minimum standard of living.
I'll wager the records of the credit card companies and banks/mutual funds/stock brokers would show that the "middle class" is heavily in debt and continues to spend while their savings and investments are a paltry percent of thier income.
In short, the "middies" are spenders, not savers.
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I'm not denying that they're spenders, but general levels of spending do decrease among the middle class during economic downturns. The Federal Reserve lowers interest rates in the hopes that it will decrease the cost of borrowing money (i.e. spending), decrease the incentive to save money, and increase the incentive to invest in stocks. In other words, there's far greater variability in levels of spending for the middle and upper classes than in the lower class. For this reason, in the macro-economic sense it's a good idea to target payroll tax rebates at the lower class for the short term.
Guess it depends on how you define middle class. Seems like to Daschle anyone making $50,000+ is excessively rich. ;)
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I'd go by what the Census determines are lower/upper/middle class by income percentiles. :)
Thanks for the SS links! I'll check those out.
-- Todd/Leviathn
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Overall, I see what you're saying but I'm still not sure I agree with the methodology. The part that particularly bugs me is the participating/non-participating distinction.
SS was (initially) clearly instituted as a benefit for those who chose to particpate. Now we're moving to full benefits for those who DO NOT participate. I'm not going to be comfortable with that.
Perhaps there's another way to put cash into the hands of the lower income group.
As to the census divisions, somehow I think the Census, the Republicans and the Democrats all use different definitions for defining a group by income level. :)
BTW, what the heck do you do for a living? You are a little too familiar with all this stuff to be the average AH joe! :)
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Most eeeeenteresting...
Nothing to add, but I'm enjoying this discussion :). Good stuff in here.
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Just reading and learning. Carry on. :cool:
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Originally posted by Toad
Overall, I see what you're saying but I'm still not sure I agree with the methodology. The part that particularly bugs me is the participating/non-participating distinction.
SS was (initially) clearly instituted as a benefit for those who chose to particpate. Now we're moving to full benefits for those who DO NOT participate. I'm not going to be comfortable with that.
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Well now this is another matter entirely that deals with the fairness of SS in general rather than the efficacy of a targetted payroll tax cut. Regardless of whether I agree or disagree with the redistributive and progressive nature of SS participation, the fact remains that a payroll tax cut for the lower class within this institutional framework is a good idea.
Perhaps there's another way to put cash into the hands of the lower income group.
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Possibly, but I haven't seen anything from Democrats or Republicans that's a better idea thus far.
As to the census divisions, somehow I think the Census, the Republicans and the Democrats all use different definitions for defining a group by income level. :)
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hehe This is probably true. The White House and Congress both use different budget projections, so who knows when it comes to defining income levels. I'd guess that there has to be some standard for tax purposes.
BTW, what the heck do you do for a living? You are a little too familiar with all this stuff to be the average AH joe! :)
I'm a graduate student in Political Science at UNC with a major in American Politics and minor in Methodology. My area of interest is interinstitutional relations, particularly between Congress and the Executive Branch, though I've also done some work on state politics and state interest group systems. Lately I've been focusing on presidential persuasion.
Economics was a love of mine undergraduate, but I never majored in it because I couldn't stand the Calculus. My wife's an Econ major though. :)
-- Todd/Leviathn
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the fact remains that a payroll tax cut for the lower class within this institutional framework is a good idea.
Disagree.
There are other ways and I really don't like the precedent being set within the SS institutional framework.
For example, you could expand the Food Stamp program into the "lower class" (lower income) group. It's still a direct transfer of wealth but it occurs within a framework that clearly marks it as welfare. Since it provides "same as cash" monetary assistance for a basic need (food) it would then free up cash for other "disposable income" items.
Problem here for Daschle, I think, is that the transfer of wealth from SS would be "off budget" would it not? It would be a "raid on the SS Trust Fund!" (Lions and Tigers and Bears! Oh My!.. nobody has ever done anything like THAT before!) Thus he and his party would not be seen a contributing to "Bush's deficit".
OTOH, an increase in Food Stamp funding is more likely (admitting I don't know) to be a bugetary item. Thus, it DOES have to be funded sort of "in public" and they won't be able to point the finger where they want too.
Comments?
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Increasing the food stamps range would cause the "welfare state" type of ourcry, among with the complaints about how abused the system is ( ie: people buying a 30 cent candy for 5$ stamp and getting cash back for beer... )
HI UDIE !!! :D
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and reading "ignored" posts ;)
Originally posted by fd ski
Increasing the food stamps range would cause the "welfare state" type of ourcry, among with the complaints about how abused the system is ( ie: people buying a 30 cent candy for 5$ stamp and getting cash back for beer... )
HI UDIE !!! :D
But damnit you said something I agree with you on. Though I would add that the complaints would be true. Before I went to college I worked at 7-11 in Killeen, Tx. During the training week they warned us over and over and over to watch out for people wanting to buy gum w/ a $10 food stamp and want cash change in return, it was illegal BTW ;) That and selling booze to minors were there two biggest worries.
When I started behind the counter I couldn't believe the ammount of people that tried that. They wouldn't take no for an answer either. They'd tell me they were going to call my boss and have me fired, one threated to kick my ass. The best was the time that one lady w/ her boy friend called me racist and actually called the cops on me. I wish you could have seen the look on her face when the cop explained to her that what she wanted me to do was against the law.
Thanks for stickin to the debate ;)
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WRT the "welfare state outcry" that's simply a smokescreen of political expediency.
As Todd said:
What we do know for sure is that those in the lower income levels tend to spend all of their paychecks to meet life's necessities -- food, rent, clothing, etc. Whatever money they receive from a payroll tax cut will most likely be spent on these necessities rather than saved.
The theory hre is that what is needed to stimulate the economy is a direct transfer of wealth to the "lower income levels" from higher income levels. (Let's not sidetrack on this as it's not the point of the discussion.)
Now Daschle wants to subtly transfer the wealth from the SS Trust Fund. He wants to crack open the "lockbox". :)
The problem here as I see it is two-fold:
1. This is a subterfuge; it's typical Washington BS, an attempt to pull the wool over the eyes of the electorate.
If a direct transfer of wealth is needed to stimulate the economy, so be it. Let there be debate about it, let a vehicle to do so be agreed upon and let's get on with it. Food Stamps are just one possible way to do this.. there have to be others.
But let it be an open part of the FEDERAL BUDGET. If this is necessary, there's no need to try to hide it, is there?
This move is a dishonest means to circumvent Congresses responsibility to determine budgetary priorities.... IMO, of course.
If this gets done, the money will have to come from somewhere. Other programs get cut or deficit spending increases.
Daschle doesn't want to take the heat for proposing more deficit spending and he doesn't want to cut the Federal Budget. So, hey, Presto! we'll use the invisible off-budget money from the SS Trust Fund instead. What happened to that "lock box"? ;)
2. SS was designed and intended to be a "no pay, no play" system. That is, if you didn't pay in you didn't get any payment back at retirement. Further, if you were in and opted out, your payments were reduced/capped at retirement.
Daschle's move RADICALLY alters this philosophy. Obviously, it provides a basis for moving on to the "Everyone is elegible of SS whether they pay in or not" theory. (Again, let's not sidetrack)
Like my mamma told me... honesty is the best policy. State the need, have the debate, vote for what you think is right.
Is that so hard for a Congressman? Apparently so. ;)
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Man, very interesting discussion. Sure has been an eye opener to me: don't know much about this tax stuff.
It also seems like the US has a much more dynamic tax system (for better or worse) than we have here. Here it's been the same: taxes have steadily increased, and when the UE told the Danish social democratic government that it isn't acceptable, they begun adding 'fees' instead of taxes. Basically here, you pay between 40 and 50% income tax. Then 25% sales tax, and then all the 'fees', like the 180% of cars value 'fee' on cars.
I've long wondered why it's been that a country like Denmark isn't much stronger economically. Overall, because of our very small and homogenous population, we have a highly trained and educated public, yet our economical progress is far from spectacular.
Think I am beginning to see why now.
Interesting discussion, thanks chaps.