Aces High Bulletin Board
General Forums => The O' Club => Topic started by: -ammo- on January 14, 2003, 06:26:24 AM
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Got the following froma friend. It is right on the money:)
The president is supposed to announce a new economic plan tomorrow evening. Some of the plan is sure to be tax cuts in some form. After his speech it is a foregone conclusion that we will then start hearing about how the wealthy or rich are going to be getting all the breaks while the poor and middle class will get nothing or next to nothing. I saw the following article a few weeks ago and thought that now was a good time to pass it on. If you think that the story is worth reading I would encourage you to pass it on to others. This is a VERY simple way to understand the tax laws. Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this. The first four men, the poorest would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18; and the tenth man, the richest would pay $59. That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day; the owner threw them a curve (in tax language a tax cut). "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.00. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?" The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. So the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12; leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man, but he, pointing to the tenth. "But he got $7!" "Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too. It's unfair that he got seven times more than me!" That's true!" shouted the seventh man, why should he get $7 back when I got only $2? The wealthy get all the breaks!" Wait a minute," yelled the first four men in unison, "we didn't get anything at
all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!
And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!
T. Davies Professor of Accounting & Chair,
Division of Accounting and Business Law
The University of South Dakota
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the problem lies in the fact the first 6 men are too stupid to figure that out and usually vote dumbacrat :)
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This story makes me hungry.
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Hey Ammo are you including FICA tax to your analogy?..
The first 4 men pay a 20$ payroll tax, the fifth man has his payroll tax cut off at $87,000 so he only has to pay $2.
In Bush's anouncment he said 95 million families would get an avrage cut of $1,081.0 and he would need 675 billion for this cut.. OK if 95 million ppl got 1,081... what happens to the other 575 billion?
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10Bears:...are you including FICA tax to your analogy?..
The first 4 men pay a 20$ payroll tax, the fifth man has his payroll tax cut off at $87,000 so he only has to pay $2.
First, your arithmetic is flawed. There is no possible way a person with smaller salary would pay larger FICA tax. It's a certain percent of a salary up to a limit. So anyone earning the limit salary or higher pays the maximum amount an everybody else pays less. The percentage of tax to salary gets decreased after the treshhold salary - but the amount does not go dow.
Second, you logic is flawed too. Whatever the high earner contributed in absolute or relative terms, he will not get that money back as benefits but the poor men will. It's not an investment but pay-as-you-go plan.
miko
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Lets compare the plans.
(http://www.bartcop.com/2003taxes-bu.jpg)
Look at Bush's plan for America.
The super-poor get a whopping one percent from Christian Bush, while the super rich got 17 percent.
To the super-poor, who spend the stimulus money, the Dems offer 13 percent to the GOP's 1 percent..
There's no argument here.
Bush and Rush are proud of the fact that the super-rich got the biggest checks.
But what will it do for the economy?
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The super-poor get a whopping one percent from Christian Bush, while the super rich got 17 percent.
Not get. Will have less taken away.
To the super-poor, who spend the stimulus money, the Dems offer 13 percent to the GOP's 1 percent..
How would that work as stimulus? How much of that money would poor invest into new capital equipment and new job creation?
But what will it do for the economy?
Anybody here who was ever hired by a poor person?
miko
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Yah, getting your own money back... that's just not fair.
Getting OTHER people's money back... THAT'S fair.
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Originally posted by miko2d
How would that work as stimulus? How much of that money would poor invest into new capital equipment and new job creation?
Supply side economics...it's been tried before to save a weak economy. What did Dubya's dad call it when campaigning for the Republican nomination before agreeing to be Reagan's VP? Something D - O - O economics... anyone... anyone...Bueller?
How many rich people do you know that would invest in new capital equipment and new job creation enterprises if there is weak demand for the product/service? The poor "invest" in consumer products/services, which in turn spurs entrepreneurs to take a risk in supplying them with the products/services in hopes of making a profit. But the concept that "if you build it, they will come" will not mend an economic downturn. Only an increase in consumer confidence and demand can do that.
Besides, the government should not be using fiscal policy to try to fix a cyclical downturn. It only ends up hurting in the long run as the deficit spending has to be paid back...with interest!
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Anybody here who was ever hired by a poor person?
miko
anybody here try to start their own business w/ Rep adminstrations?
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Lemme see here.. according to the chart above, those making less than $10,000 ... I assume that's adjusted gross income after individual exemptions and deductions..... will have their tax burden reduced 12.6%.
Of course, married filing joint with and AGI of <$12,000 owe NO taxes (2002 tax tables).
So, how is that? Those folks get 12.6% of Zero? Or what?
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exactly what I was thinking Toad
if this graph is correct, I stand to get less from the Bush plan than the Dem one but I'm still for the Rep plan as it is better for the country & its future than the RobinHood plan from the left...
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it wasn't mentioned that #10 was servered champagne & caiviar.
2-4's stale toast was cold because they got there late (they had to walk - couldn't take the bus. they were too smelly after getting off their jobs in waste mgmt)
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The tenth man is now my client.
shhhhhhhhh
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Originally posted by whgates3
it wasn't mentioned that #10 was servered champagne & caiviar.
2-4's stale toast was cold because they got there late (they had to walk - couldn't take the bus. they were too smelly after getting off their jobs in waste mgmt)
Are you suggesting that all should be paid the same no matter what job in society they perform?
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Further, that "married filing joint" couple that makes $20,000... the next higher bracket that the chart shows the Dems giving a 14.3% break to.....
Well, in 2002, their taxes on an AGI of $20,000 would have been $2400.
Their 14.3% "tax break" would be a whopping $ 343.20.
Weren't these the same Dems that complained when Bush gave everybody a $600 return of their own money? Saying it wouldn't do any good and wouldn't help the economy?
Now they're going to give about 1/2 that and it's going to be a great thing?
:confused:
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Originally posted by Toad
Are you suggesting that all should be paid the same no matter what job in society they perform?
#10 doesn't have a job (he just collects interest from 4-8) but is considering a run for the senate
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ah.. so you're suggesting that either all work for the same wages or none should have to work?
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George W. Bush has unveiled his so-called "economic stimulus" plan, and it looks more like a plan for economic disaster. (http://www.democraticunderground.com/top10/03/95.html)
Here's the deal: Tell everyone that you're trying to stimulate the economy as a cover for your real agenda, which is to give another massive tax break to the rich people who bankrolled your campaign.
The centerpiece of the Bush plan is a huge tax cut on dividends, which (surprise!) substantially favors the affluent.
According to the Tax Policy Center, people earning more than $316,895 a year would on average save $13,243 in taxes, while people earning $21,350 would save just $47.
And remember that budget surplus we had during the last presidential administration?
Well, you can forget about it.
By some estimates, the Bush tax plan would increase the deficit to $350 billion next year, a new record. It's fiscal responsibility..... Republican style!
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Originally posted by weazel
According to the Tax Policy Center, people earning more than $316,895 a year would on average save $13,243 in taxes, while people earning $21,350 would save just $47.
Hmmmm..
So let's see.....
The people that pay the MOST tax... get the biggest refund.
The people that pay the LEAST tax... get the smallest refund.
:confused:
How's that again? If you pay no tax at all, shouldn't you get the biggest refund?
Ah... that's right.. the little tale that started this whole thread sort of explains that in an allegorical kind of way.
(http://www.taxpolicycenter.org/taxfacts/tables/overview/Distribution/GIF%20Files/income.gif)
(http://www.taxpolicycenter.org/taxfacts/tables/overview/Distribution/GIF%20Files/FedTax_2000_Law.gif)
It's a "progressive" system. Now, if you want a "direct transfer of wealth system" why don't you just come out and say so?
Effective Tax Rate (http://www.taxpolicycenter.org/taxfacts/overview/rate.cfm)
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An economy works best in a society that is integrated rather than exploitative – a society wherein all have a "stake" in its success.
In short, the Democrats feed the golden goose, the Republicans cook it.
Chimpys newest "stimulis package" won't do dick as far as kick-starting the economy...and isn't that supposed to be the idea behind it?
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The original analogy is dead on. Let me ask the left-wingers this: What do you think that punishing others' successes by continually taxing their efforts will acheive?
How exactly can you multiply the wealth of some by dividing it from others?
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Nice dodge, Weasel.
Failure to address the basic questions:
If people below $12K AGI pay NO tax, how can the Democrats give them a 12% "tax cut"?
If people at $20K AGI are only getting a ~$350 "tax cut" from the Democrats, how is this better than the $600 they got from the Republicans in the last "tax cut"? Back then the Democrats assailed the $600 as meaningless because it was so small it would do nothing for the economy. What changed? Why is $350 soooooo much better?
And finally, answer straight up: Aren't you proposing a "transfer of wealth" tax system? You're in favor of giving money to folks that pay no tax. Where's it coming from?
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"Back then the Democrats assailed the $600 as meaningless because it was so small it would do nothing for the economy."
... and it didn't.
"What changed? Why is $350 soooooo much better?"
Right ... So I gotta wonder what the point of the tax cut is in the first place.
I don't think folks makin' a half mill are gonna thank their lucky stars for the extra 15 grand... just the same as folks makin' 20 grand aren't gonna give a rat's arse about saving 50 bucks.
Meanwhile, the surplus turns into a defecit...
I think I'm missing something.
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It's just politics as usual. They don't know what to do.. neither side.. but they know they have to make a gesture..... and then criticize the other side's gesture.
Still, anytime you get YOUR money back and outta the hands of the bureacrats... can't be all bad.
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Well no... Nobody had to make a "gesture"... (whatever for?).
I think your answer is a bit simplistic. S'ok... Mine is too. :)
The Bush Admin, alone, proposed this 674 million tax cut last week. I have never seen the Dems proposal and don't know where weazel got it... But if it's indeed correct, I suspect that being a minority in both the House and Senate they were in the unfortunate position of saying "look, if you want to do this, here is how we think it should work". A counter proposal should Bush really want to push this through. Just a guess.
It's not like both sides were racing against the clock to come up with their own "gestures" and happened to bust out with them at the same time. "Look everyone! A tax cut! Oh... you guys too, huh?"
At any rate... The Treasury Secretary that Bush ousted last month thinks the tax cut is a mistake (not much of a suprise), Bush is receiving an unusual ammount of opposition from within his own party, and Fleischer is already signaling that Bush is willing to compromise. Some suggest the 1st draft was written to score points from his big GOP contributors... and most everyone thinks he's got no choice but to back down.
[irrelevant bashing of bush deleted.]
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Oh, don't get me wrong..... I don't think the tax cut will do anything for the economy.
As for the Democrats, they knew Bush planned to announce his cut and they raced to get theirs out there ahead of him.
Basically neither party has any idea what to do about "ending the recession" or "fixing the economy".
I'd guess it's a "time" thing. People's attitudes go through cycles and until the balance of folks decide "it's ok" and "life goes on" they're not going to spend much, "tax cuts" not withstanding.
They can always cut spending.
NOT. Politicians DO NOT cut spending.
So, if they get less bucks to waste... that's a good thing.
Anyway, that's not really the point of this thread. This thread started out with the "class warfare" aspect.
And the analogy is a good one.
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"Anyway, that's not really the point of this thread. This thread started out with the "class warfare" aspect."
True enough.
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Originally posted by Toad
ah.. so you're suggesting that either all work for the same wages or none should have to work?
you're quite misguded in your attempt to put words into my virtual mouth. how you got that i dont know, as i said #10 doesn't work & suggested that #1 doesn't either.
the pitfall of trickle down in a bad economy is that the domestic capital markets are depressed, so the newly available capital created by a tax cut at the top goes to more profitable markets (overseas), which is unfortunatly shortsighted, as those who benefit from our system most have the most interest in supporting it.
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Originally posted by -ammo-
Got the following froma friend. It is right on the money:)
And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. Where would that leave the rest? Unfortunately, most taxing authorities anywhere cannot seem to grasp this rather straightforward logic!
T. Davies Professor of Accounting & Chair,
Division of Accounting and Business Law
The University of South Dakota
So the US tax system works like a restaurant? What about tax avoidance? Tax havens? The richest three guys can hire assistants to argue their indiviual contributions with the restauranteur, threatening to never eat there again unless he charges them individually, cuts their bill and feeds the poorest 4 guys with roaches and cardboard.
And it's not like you pay much tax in the USA anyway, amongst western industrialized nations you have the lowest tax burden of all.
Why get so hung up about tax? If its such a burden, don't you have a right to defend yourself against tax collectors with lethal force? :D
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actually I would rather folks pay a fair equal percentage accross the board. I don't know if could agree with a flat tax, but certainly I would like to see brackets disolve. Based on income level, EVERYONE should pay an equal percentage of their income. And since when should the US model it's tax laws after any other country?? I copuld care less how much more Brit's have to pay on their income tax'es.
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It's a nice thought, but I think the US treasury would be bankrupt if you introduced flat taxes.
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A flat tax is a truly regressive tax...it harms low income folks more than high income folks. Consider a 10% flat tax...a person earning $100,000 would end up with $90,000 after taxes. That $10,000 difference is really not going to change their life style all that much. They may have to buy a Cadillac instead of a Lexus.
Now consider a person earning $10,000 who would end up with $9,000 after the tax. A thousand dollar difference to that person is significant. It might mean the difference between being able to afford a used Toyota or taking the bus.
Replacing the current income tax system with a national sales tax is more preferable. I know many economists consider a sales tax a regressive tax as well, however this economist disagrees. Here is why: The rich tend to buy more expensive products than those less well off. The sales tax on a Lexus is going to be a lot more than on a used Toyota, but they still provide the same utility, i.e. transportation. The rich person does not have to choose to buy the Lexus, but they prefer it and therefore voluntarily choose to pay a greater amount of tax. So in the end the rich person ends up paying a greater amount of tax than the lower income individual.
Now the sales tax also has several side benefits
1) It encourages savings, which frees more money for investment and economic growth. Of course economic growth in turn stimulates further spending and greater tax revenues.
2) It simplifies the tax code incredibly.
3) It would allow for the elimination of the IRS as every state has a sales tax collection agency which can collect the Federal Government's share as they currently collect each county's share. Eliminating the IRS reduces the cost of running the government.
Anyway...just my $0.02.
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Originally posted by whgates3
you're quite misguded in your attempt to put words into my virtual mouth.
I'm not trying to put words in your virtual mouth. I'm trying to understand the concept you are attempting to express.
it wasn't mentioned that #10 was servered champagne & caiviar.
2-4's stale toast was cold because they got there late (they had to walk - couldn't take the bus. they were too smelly after getting off their jobs in waste mgmt)
From this I do indeed take it that you think #10 is wealthy. I take that 2-4 1) can't afford a car, 2) have a low-level job in waste management.
And this applies to the allegory.... how? Obviously, this is a vast spread in income between the 1st quintile and the last (bottom) two quintiles. How does that invalidate the comparison?
Or is it wrong that folks with more money can afford better things?
In short, what point were you trying to make with that statement?
It isn't about "trickle down" per se, either.
The question before us is: If everyone gets the same tax cut, people who pay the most in taxes will get a larger sum than those who pay the least in taxes. It's a "well, DUH!" mathematical equation that the Democrats hold up as proof of "unfairness" when it's just simple math.
You never see the Dems just coming out and saying "we need to redistribute the wealth" although that is EXACTLY what they are aiming at with the approach they take.
My position is if that's what you're after, say so. Might as well have an honest debate about it.
But 1% of a million is always going to be more than 1% of 10,000 quantitatively. "Fair" doesn't enter into the math.
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I think probably a combo Flat Tax/National Sales Tax would work though.
You could exempt folks below a certain income level from the Flat Tax... we do that now under the present system... and you can exempt "necessities" from the National Sales Tax, like food and medicines, etc.
It would be a goat rope for a while and need tweaking to be sure... but I don't see how it could be worse than the Championship Goatrope tax system we have now.
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Originally posted by Toad
NOT. Politicians DO NOT cut spending.
So, if they get less bucks to waste... that's a good thing.
If politicians do not cut spending, how is it a good thing that they will get less money to spend? We know the gov't spends money regardless if they have it or not. Or should we just not worry about the national debt, as we never really have to pay it off. ;)
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typical examples of class envy .. no wonder the dems get as far as they do
it is nice that BOTH sides are now talking about tax CUTS of one sort or another :)
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Do we really need a tax cut right now? I know everyone wants one, but even the Republicans are not as shy about doling out pork as their reputation would suggest, and it looks like we're going to be spending plenty in coming years. Maybe it's just my personal perspective on savings vs. spending. I have as much in the bank as research shows the average person has in credit card debt.
Nor do I think it particularly provides a boost to the economy, since the upper brackets are already probably spending as much as they're going to spend on non essential items, and the lower brackets should be putting it in the bank in case they lose their job in the coming months. To me it's just a "feel good/payback" kinda thing.
Had an interesting discussion the other night with an oral surgeon in the .05 bracket. He went into great detail explaining his spending habits, $2 million house and even pointing out how much he pays in taxes ($150,000). He's even going to buy the same car I plan on buying (a Mini Cooper S) only he's going to autocross race it, since he already has several Jags. He's all for the tax cut.
It did help point out a couple of differences between what a tax cut means though. In his bracket, the money would buy his Mini Cooper S. In a lower bracket, a tax cut can be used to help pay for a child's college tuition, which will never be one of his concerns. He's worked hard to get where he's at (but having wealthy parents and a quality education provided by living in the right neighborhoods also helped). At this point, all his needs in life are covered 2-3 times over -- food, housing, college for the kids, transportation, healthcare, retirement. To him a tax cut is a new toy. To someone in a lower bracket it might mean a little easier time sending the kid to college. You reach a certain point with wealth where it works for you.
His kids will have a lot easier time living the American dream because they will start out ahead of the game. People born without those advantages can overcome the situation, far easier than in most places, but they will have to work harder to get there all other things being equal. Now could I be just a tiny bit jealous? Sure. But, I wasn't exactly born into poverty myself and can see the advantages you get in America seem to multiply as you acquire more wealth, particularly after you can cover your basic needs. Of course he also believes that we are here as a result of space aliens (man, I thought he was trolling, it's a good thing I didn't start joking around too soon ) and that we are using Star Wars to fight aliens in orbit today, so I don't feel all that jealous in the end.
As also pointed out, the upper brackets can pay for good accountants, and the IRS confirmed in that testimony a few years back that the tax cheats they go after are usually in the lowest brackets, since they lack the resources to fight back.
Regardless, I'm more for less spending (poorly-executed social programs and blatant corporate welfare) as opposed to continued higher spending and a tax cut. And again, I will be surprised if the Republicans show any more restraint, even where blatant pork is concerned, than the Democrats.
Charon
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oh, I'd like a tax break/refund. It'd go into my widescreen TV fund! :D
See? I'd use the tax break to stimulate the economy by injecting $$$$ to some online TV dealer. :)
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Nifty, you are talking about one of the Needs in life, vs. one of the luxuries :)
Charon
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Originally posted by weazel
Lets compare the plans.
(http://www.bartcop.com/2003taxes-bu.jpg)
Look at Bush's plan for America.
The super-poor get a whopping one percent from Christian Bush, while the super rich got 17 percent.
To the super-poor, who spend the stimulus money, the Dems offer 13 percent to the GOP's 1 percent..
There's no argument here.
Bush and Rush are proud of the fact that the super-rich got the biggest checks.
But what will it do for the economy?
Fine line between socialism and communism, the dems plan crosses it I believe.
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Originally posted by crowMAW
A flat tax is a truly regressive tax...it harms low income folks more than high income folks. Consider a 10% flat tax...a person earning $100,000 would end up with $90,000 after taxes. That $10,000 difference is really not going to change their life style all that much. They may have to buy a Cadillac instead of a Lexus.
Now consider a person earning $10,000 who would end up with $9,000 after the tax. A thousand dollar difference to that person is significant. It might mean the difference between being able to afford a used Toyota or taking the bus.
Replacing the current income tax system with a national sales tax is more preferable. I know many economists consider a sales tax a regressive tax as well, however this economist disagrees. Here is why: The rich tend to buy more expensive products than those less well off. The sales tax on a Lexus is going to be a lot more than on a used Toyota, but they still provide the same utility, i.e. transportation. The rich person does not have to choose to buy the Lexus, but they prefer it and therefore voluntarily choose to pay a greater amount of tax. So in the end the rich person ends up paying a greater amount of tax than the lower income individual.
Now the sales tax also has several side benefits
1) It encourages savings, which frees more money for investment and economic growth. Of course economic growth in turn stimulates further spending and greater tax revenues.
2) It simplifies the tax code incredibly.
3) It would allow for the elimination of the IRS as every state has a sales tax collection agency which can collect the Federal Government's share as they currently collect each county's share. Eliminating the IRS reduces the cost of running the government.
Anyway...just my $0.02.
After taxes thats $0.0102 :D
A national sales/flat tax would be, in my opinion, a great alternative to the system we have now.
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Originally posted by miko2d
How would that work as stimulus? How much of that money would poor invest into new capital equipment and new job creation?
Why in the world would you expect that the wealthy would invest in new capital equipment and job creation in the current economic environment? Noblesse oblige?
If the current economic downturn is the result of low consumer demand, which it appears to be, then explain to me how increasing the supply of goods and services likewise increases demand. The whole reason we're seeing massive job cuts is because businesses have overproduced given current demand levels, forcing them to lower prices while production costs remain the same. There was actually some fear, a year ago, that there was strong deflationary pressure as the result of massive overproduction; in the aggregate, it was offset by rising gasoline and new home prices.
The solution? Cut production and all unnecessary personnel associated with the overproduction in order to remain profitable given current market demand. Why, then, would cutting taxes to wealthy individuals and businesses lead them to increase production and lower prices given a constant demand? They'd probably hold onto the money and earn interest on it, but there's certainly no incentive to invest it in expansion or job creation. It just doesn't make sound business sense.
If you cut taxes on those earning the least amount of money, who live paycheck to paycheck, you're going to increase demand. Any extra money provided to them is going to find its way back into the market, which in turn will lead to job creation and capital investment.
I'm not attacking a tax cut on the wealthy, mind you. However, believing that cutting taxes for the wealthy alone will lead to economic improvement (i.e. increasing supply rather than demand, hence supply-side economics) requires a real leap of logic.
-- Todd/Leviathn
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"I think probably a combo Flat Tax/National Sales Tax would work though.
You could exempt folks below a certain income level from the Flat Tax... we do that now under the present system... and you can exempt "necessities" from the National Sales Tax, like food and medicines, etc.
It would be a goat rope for a while and need tweaking to be sure... but I don't see how it could be worse than the Championship Goatrope tax system we have now.
__________________
Toad
XO
13th TAS
No Mercy Asked....None Given!
"
This is what I have allways advocated and comes the closest to being fair without all the complication. I also believe that if we cut the amount government had to spend by half.... we would see what their true priorities are.
lazs
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Originally posted by -ammo-
T. Davies Professor of Accounting & Chair,
Division of Accounting and Business Law
The University of South Dakota
He didn't write it. Why is spreading lies through spam so popular with conservatives?
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Originally posted by Dead Man Flying
If you cut taxes on those earning the least amount of money, who live paycheck to paycheck, you're going to increase demand. Any extra money provided to them is going to find its way back into the market, which in turn will lead to job creation and capital investment.
I'm not attacking a tax cut on the wealthy, mind you. However, believing that cutting taxes for the wealthy alone will lead to economic improvement (i.e. increasing supply rather than demand, hence supply-side economics) requires a real leap of logic.
-- Todd/Leviathn
S!!!
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russias economy skyrocket'd after they introduced a flat income tax.. the lowest rate in europe as of now. http://www.papillonsartpalace.com/russias.htm
im sure you can find other articles on it.
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Todd,
Where did the consumer demand go?
Things were rocking along reasonably well, albeit in a slowdown, until 9/11 and the anthrax scare.
Is that what made the turtle pull his head into the shell?
If so, will a "tax cut" (or direct transfer of wealth of about $350 each to the lowest two quintiles) change this attitude?
Not arguing, asking your opinion.
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Just our of curiosity, how much income taxes were paid by GE, GM, etc?
Percentage wise are they paying the same, more, or less than the average?
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a lot of tax charts are inaccurate, as they dont account for the AMT, which tends to screw people in the $60k - $500k range...corporate taxes are stupid - they just translate to higher prices, paid by you. its a great way for gov't to hide taxes...effectivley there is a national sales tax in corporate income taxes, but nobody tells you when you're paying it
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I take it you had no point with that comment then.
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President Bush's budget chief said Wednesday that the White House envisions federal deficits in the $200 billion to $300 billion range over the next two years, a dramatic worsening of the government's fiscal picture since last summer.
The acknowledgment of the bleaker fiscal prospects was sure to fire the partisan budget fight between the Bush administration and Democrats, who have accused Bush of ignoring revived federal deficits and even fueling them by proposing new tax cuts.
In remarks to the U.S. Chamber of Commerce and later to reporters, Daniels downplayed the near-term shortfalls, which stand to surpass the record $290 billion in red ink that occurred when the first President Bush was held office in 1992.
‘‘We ought not hyperventilate about this issue," he said.
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I think the case can be made that this is a rather unique downturn in the history of the US economy.
How do you end a recession where people are just not in the mood to spend? Neither Hoover nor Roosevelt really had much success after the '29 cataclysm. I think the case can be made that WW2 ended that one.
Now we've got 9/11 and the consequent effects. The travel industry, particuarly the airline element is on its rear. Spending is up a bunch for a lot of reasons that were never players before.
As I said, I don't think this one fits any template.
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Originally posted by Toad
I think the case can be made that this is a rather unique downturn in the history of the US economy.
Cyclical economic downturns are common. There have been many in US history. What is unusual is that we have gone for nearly 10 years with excellent economic growth.
While 9/11 was certainly a major factor in the current downturn, it really began earlier with the failure of the dot-coms. In that case, investors suddenly realized that the total assets and projected incomes (primarily from advertising) of these companies did not justify their stock prices. Then 9/11 frightens consumers (they don't want to be in public gathering areas where commerce takes place) and business travelers are stranded for a month without adequate air service or are too frightened to use the air service available. That certainly put a damper on growth.
There have been similar economic shocks that led to a recession...the massive increase in the money supply in the late 70's; the early 70's oil embargo; the margin call of 1929; etc.
How do you end a recession where people are just not in the mood to spend? Neither Hoover nor Roosevelt really had much success after the '29 cataclysm. I think the case can be made that WW2 ended that one.[/B]
There is not a quick fix. Once people feel they have survived the worst of the recession and feel secure in continued income, then they will spend again. Note the part about continued income. That is why short lived tax rebates don't bring an economy back to life. People realize that this is a one time thing and they may not get the money next year. Only the belief in continued stable income allows people to risk spending rather than saving.
Unfortunately, a recession is caused by the fears of individuals aggregated. If we truly acted rationally as individuals in our own best interest and the best interest of the group, we would not have a problem. But Nash's theory does not work well for large numbers of independent actors such as 300 million Americans trying to decide how much to spend for Christmas. In that case, our independently rational decisions lead to sub optimal results.
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I have a theory? :eek:
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Originally posted by Nash
I have a theory? :eek:
LOL...I hope not!! ;)
That's John Nash...Nobel Prize for economics. I think they made a chick flick movie about him.