The cuts were never intended, even by Bush, to be permanent. So, if you are truly serious about the deficit, then everyone has to pay more, and the cuts ended for everyone.
That would also mean many people who now don't pay any income tax at all will have to pay again.
Almost 50% of the people don't have to pay any income tax, leaving the rest of us to pay. Now, that's not fair and if the "rich" have to pay their "fair share", so do the rest.
It's just human nature that if I don't have to pay anything, I don't care how much you pay or how much you spend, just give me mine. In my opinion, either everyone gets the current lower rate, or nobody gets it.
The tax cuts weren't intended to be permanent, John?
"'We knew that, politically, once you get it into law, it becomes almost impossible to remove it,' says Dan Bartlett, Bush’s former communications director. 'That’s not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth.'"
John said..."That would also mean many people who now don't pay any income tax at all will have to pay again."
If only that were true.
The main reason that almost 50% of Americans pay no tax is not because of the tax rate; it is because they are able to reduce their tax liability through various credits available to low - middle income taxpayers.
Not only do they not pay any tax, but they actually make a profit.
For example, using 2009 information:
A family of 4 that makes $40,000 per year, takes the $11,400 standard deduction and $14,600 (4 x $3650) in personal exemptions, resulting in taxable income of $14,000.
The tax liability on $14,000 is $1,403.
Then they would receive tax credits:
$2,000 Child tax credit + $800 Making Work Pay credit + $5,036 Earned Income Tax credit = $7,836 total credits
Not only would they not have to pay their $1,403 tax liability, but they would receive a check from the government (our tax dollars) for $6,433.
Raising the tax rate in the above scenario only means that they receive a little less profit.
Since I don't personally qualify for those tax credits, raising my tax rate means that I have to contribute more so someone else can keep making a profit.
Most tax credits are "non-refundable", so you can't receive more than you've paid.
Earned Income Tax Credit (EITC) is a "refundable" tax credit, which means that you can receive it if you qualify, even if you have no tax liability. Calling it a refund is deceiving.
I think only way to stop the government from owning 62% of my labor (some call it taxes)is to STOP NEEDING the government.
The hopes of lowering spending to any degree is impossible. The very nature of the system it has to grow and get more intrusive.
JoAnne, I don't think this family of 4 would get an earned income credit. I have 2 children and am sole supportive parent. Once my pay hit somewhere over $30,000 I did not qualify for that credit.
I wonder if this is where our future rebellion to the Govt will find it's roots. After all if 65% of us (thats everyone from all income levels across the board) decided to boycott paying taxes, what is the Govt gonna do? I think we finished payin out the Civil war which is what income taxes were inacted for, supposed to be a temporary thing, but as Howard pointed out once the Govt (be it local state or federal)has something enacted thats to their benefit it nevers gives it up.
Last year was my first as a net leecher. Two years ago I bought the house so I got 5,400 for the first time home buyer credit (which is actually an interest free loan paid back in 15 years) and last year I got a huge mortgage interest deduction along with college deductions.
This year will be interesting with the marriage and combining finances.
Its so complicated that it should be completely rewritten. If it was up to me, the Bush tax cuts would be discontinued and the Fair Tax would be adopted in whole (which includes eliminating the IRS, the income tax, all business taxes, and any other federal tax). It would be simpler and the masses would rejoice at getting a monthly check.
But, convincing people that pay their fair share and pay their own way to STOP NEEDING the government is easier than convincing the other 50% to STOP WANTING the government to offset their taxes, support their lifestyle and provide a windfall check at the end of the year.
I would venture to guess that most of those 50% that don't pay taxes, probably don't follow the news to even realize what all of these entitlement programs are doing to our economy. In their eyes, the system works just fine.
Michelle, I'm not an accountant so I don't know why you would not have qualified, but here are the income guidelines in effect for 2009.
New for tax year 2009: The amount of EITC increased for workers with a third qualifying child* and the rules changed for determining who is a qualifying child.
Earned Income and adjusted gross income (AGI) must each be less than:
$43,279 ($48,279 married filing jointly) with three or more qualifying children
$40,295 ($45,295 married filing jointly) with two qualifying children
$35,463 ($40,463 married filing jointly) with one qualifying child
$13,440 ($18,440 married filing jointly) with no qualifying children
Tax Year 2009 maximum credit:
$5,657 with three or more qualifying children
$5,028 with two qualifying children
$3,043 with one qualifying child
$457 with no qualifying children
Yes I have to agree with Peter. As JoAnne points out some people live a rather expensive lifestyle. Eliminate all but taxes on purchases, and no exemptions for anyone. Food being non taxed but snacks sweets and such included. Want a pie or cake, then buy the ingredients and learn to do it, rather than buying a hostess cupcake or Mrs. Smiths frozen pie.
On first glance would eliminate people living outside their means, curb some of the obesity problems everyone complains about. And it really would make the tax burden "fair" as drug dealers and other shady types of income sources would be forced into actually contributing to taxes buying all their flash and bling. Also would maybe make people feel more self worth for being able to buy luxuries in life because they earned it.
Again just musing on what could happen, just a thought.
I'd like to see a small flat tax, say 5 or 7% from everyone's paycheck, a similar corporate tax and a national sales (consumption) tax; very simple, fair and affordable. Eliminate the IRS. Then start chopping down government.
Kyle,
The Fair Tax would tax all food. Nothing is immune to it, but you'd get a prebate for the 23% inclusive sales tax up to the poverty line every month, so its equivalent to essentials not being taxed.
Under the 2009 numbers a family of 4 would get a monthly check of $422.63 as a prebate for the taxes on the items they buy.
"I personally don’t like to turn statistics and facts into conspiracy theories, but
realistically it is almost impossible not to question. How can someone making $249
million in one year seriously say they deserve it when they live in a country where our
public schools have shown a decrease in productivity in recent decades. The simple fact
is our country is showered with run down factory towns that have been raped by some big
company that never really had its workers best interest at heart."
That paragraph show nothing but wealth envy.
Being pissed at the guy with money is not how to make more. What does taxing him more get you...answer, nothing because he has the ability to move. Instead better yourself and get a better paying job.
Don't give me the excuse of the economy sucks, Look at how many businesses have opened in Batavia in just the past two years. How many people have jobs because the "rich" invested their money to make more of it?
Answer... all of the privately employed. Howard is "rich" in ideas and work ethic. He's just one example. And though he may never be a millionaire, he is rich in freedom.
Oh and Tyson doesn't know the difference between a live and alive.
"Jean-Jacques Rousseau was one of the most well-known intellectuals of the 18th century and was a live during what was known as France’s age of Enlightenment."
So why should I read anything he writes when he can't proofread? We aren't talking some crap post on the internet, we are talking an essay that he wants considered for its contained knowledge.
"Last year their CEO (of Verizon), Ivan Seidenberg,
received a raise of 48% which put his salary at $19.4 million. I don’t believe an increase
in pay is wrong, but when it is happening in a company that stock went down 26% and
froze the pension of 50,000 workers in the same year I believe there is a clear problem."
Who are you to determine why he gets paid what he does. Does it occur to you that he may have saved them from complete bankruptcy? Or that he might have instituted a plan to increase smartphone sales which make them more money then dumbphones? You obviously do believe an increase is wrong.
I say do away with all of the IRS,EVERYONE pay a flat tax of 5-10% on anything we purchase or sell. That way no one "beats" the system,we'd have more money in our paycheck weekly,maybe people will buy more goods,more jobs might be created,etc,etc......Oh wait,that is TOO simple of an idea-they would all talk about it(and it has been floated around in the past,IIRC)but nothing will get done except raising fees and surcharges,not "taxes".....
I agree taxes are too complicated for most people, but the flat tax is an over-simplifed, unworkable idea that is highly regressive. Never gonna happen, so we might as well look at alternatives such as a more streamlined income tax combined with a national VAT tax.
This has been passed around the email train for a while:
Bar Stool Economics
Suppose that every day, ten men go out for beer and 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 would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 each end up being paid to drink his beer. So, the bar 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.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink 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. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? 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 the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia
"[A] wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." - Thomas Jefferson
Wow, look at the wealth
Wow, look at the wealth envy...
The cuts were never intended,
The cuts were never intended, even by Bush, to be permanent. So, if you are truly serious about the deficit, then everyone has to pay more, and the cuts ended for everyone.
That would also mean many people who now don't pay any income tax at all will have to pay again.
Almost 50% of the people don't have to pay any income tax, leaving the rest of us to pay. Now, that's not fair and if the "rich" have to pay their "fair share", so do the rest.
It's just human nature that if I don't have to pay anything, I don't care how much you pay or how much you spend, just give me mine. In my opinion, either everyone gets the current lower rate, or nobody gets it.
The tax cuts weren't intended
The tax cuts weren't intended to be permanent, John?
"'We knew that, politically, once you get it into law, it becomes almost impossible to remove it,' says Dan Bartlett, Bush’s former communications director. 'That’s not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth.'"
From:
http://www.thedailybeast.com/blogs-and-stories/2010-12-02/tax-cut-exten…
John said..."That would also
John said..."That would also mean many people who now don't pay any income tax at all will have to pay again."
If only that were true.
The main reason that almost 50% of Americans pay no tax is not because of the tax rate; it is because they are able to reduce their tax liability through various credits available to low - middle income taxpayers.
Not only do they not pay any tax, but they actually make a profit.
For example, using 2009 information:
A family of 4 that makes $40,000 per year, takes the $11,400 standard deduction and $14,600 (4 x $3650) in personal exemptions, resulting in taxable income of $14,000.
The tax liability on $14,000 is $1,403.
Then they would receive tax credits:
$2,000 Child tax credit + $800 Making Work Pay credit + $5,036 Earned Income Tax credit = $7,836 total credits
Not only would they not have to pay their $1,403 tax liability, but they would receive a check from the government (our tax dollars) for $6,433.
Raising the tax rate in the above scenario only means that they receive a little less profit.
Since I don't personally qualify for those tax credits, raising my tax rate means that I have to contribute more so someone else can keep making a profit.
Cut Spending, not fleece the
Cut Spending, not fleece the people. So, yes extend them for now.
I could be wrong, but I don't
I could be wrong, but I don't think you can get a refund for more than the total taxes you've paid.
Most tax credits are
Most tax credits are "non-refundable", so you can't receive more than you've paid.
Earned Income Tax Credit (EITC) is a "refundable" tax credit, which means that you can receive it if you qualify, even if you have no tax liability. Calling it a refund is deceiving.
Fair enough, but the Child
Fair enough, but the Child Tax Credit is Non-Refundable (thanks Google)...so your model above is a slight exaggeration.
Your right. It was my error.
Your right. It was my error. It wasn't my intention to exaggerate. So instead of $6433 they would receive the maximum EITC of $5036.
That still doesn't make me feel any better about it.
http://www.forbes.com/2010/04
http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-c…
I think only way to stop the
I think only way to stop the government from owning 62% of my labor (some call it taxes)is to STOP NEEDING the government.
The hopes of lowering spending to any degree is impossible. The very nature of the system it has to grow and get more intrusive.
JoAnne, I don't think this
JoAnne, I don't think this family of 4 would get an earned income credit. I have 2 children and am sole supportive parent. Once my pay hit somewhere over $30,000 I did not qualify for that credit.
I wonder if this is where our
I wonder if this is where our future rebellion to the Govt will find it's roots. After all if 65% of us (thats everyone from all income levels across the board) decided to boycott paying taxes, what is the Govt gonna do? I think we finished payin out the Civil war which is what income taxes were inacted for, supposed to be a temporary thing, but as Howard pointed out once the Govt (be it local state or federal)has something enacted thats to their benefit it nevers gives it up.
Just a thought....
Last year was my first as a
Last year was my first as a net leecher. Two years ago I bought the house so I got 5,400 for the first time home buyer credit (which is actually an interest free loan paid back in 15 years) and last year I got a huge mortgage interest deduction along with college deductions.
This year will be interesting with the marriage and combining finances.
Its so complicated that it should be completely rewritten. If it was up to me, the Bush tax cuts would be discontinued and the Fair Tax would be adopted in whole (which includes eliminating the IRS, the income tax, all business taxes, and any other federal tax). It would be simpler and the masses would rejoice at getting a monthly check.
I agree with you Terry.
I agree with you Terry.
But, convincing people that pay their fair share and pay their own way to STOP NEEDING the government is easier than convincing the other 50% to STOP WANTING the government to offset their taxes, support their lifestyle and provide a windfall check at the end of the year.
I would venture to guess that most of those 50% that don't pay taxes, probably don't follow the news to even realize what all of these entitlement programs are doing to our economy. In their eyes, the system works just fine.
(No subject)
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Michelle, I'm not an
Michelle, I'm not an accountant so I don't know why you would not have qualified, but here are the income guidelines in effect for 2009.
New for tax year 2009: The amount of EITC increased for workers with a third qualifying child* and the rules changed for determining who is a qualifying child.
Earned Income and adjusted gross income (AGI) must each be less than:
$43,279 ($48,279 married filing jointly) with three or more qualifying children
$40,295 ($45,295 married filing jointly) with two qualifying children
$35,463 ($40,463 married filing jointly) with one qualifying child
$13,440 ($18,440 married filing jointly) with no qualifying children
Tax Year 2009 maximum credit:
$5,657 with three or more qualifying children
$5,028 with two qualifying children
$3,043 with one qualifying child
$457 with no qualifying children
Yes I have to agree with
Yes I have to agree with Peter. As JoAnne points out some people live a rather expensive lifestyle. Eliminate all but taxes on purchases, and no exemptions for anyone. Food being non taxed but snacks sweets and such included. Want a pie or cake, then buy the ingredients and learn to do it, rather than buying a hostess cupcake or Mrs. Smiths frozen pie.
On first glance would eliminate people living outside their means, curb some of the obesity problems everyone complains about. And it really would make the tax burden "fair" as drug dealers and other shady types of income sources would be forced into actually contributing to taxes buying all their flash and bling. Also would maybe make people feel more self worth for being able to buy luxuries in life because they earned it.
Again just musing on what could happen, just a thought.
I'd like to see a small flat
I'd like to see a small flat tax, say 5 or 7% from everyone's paycheck, a similar corporate tax and a national sales (consumption) tax; very simple, fair and affordable. Eliminate the IRS. Then start chopping down government.
Kyle, The Fair Tax would tax
Kyle,
The Fair Tax would tax all food. Nothing is immune to it, but you'd get a prebate for the 23% inclusive sales tax up to the poverty line every month, so its equivalent to essentials not being taxed.
Under the 2009 numbers a family of 4 would get a monthly check of $422.63 as a prebate for the taxes on the items they buy.
http://www.rockhurst.edu/news
http://www.rockhurst.edu/news/events/images/projecti/tyson.pdf
"I personally don’t like to
"I personally don’t like to turn statistics and facts into conspiracy theories, but
realistically it is almost impossible not to question. How can someone making $249
million in one year seriously say they deserve it when they live in a country where our
public schools have shown a decrease in productivity in recent decades. The simple fact
is our country is showered with run down factory towns that have been raped by some big
company that never really had its workers best interest at heart."
That paragraph show nothing but wealth envy.
Being pissed at the guy with money is not how to make more. What does taxing him more get you...answer, nothing because he has the ability to move. Instead better yourself and get a better paying job.
Don't give me the excuse of the economy sucks, Look at how many businesses have opened in Batavia in just the past two years. How many people have jobs because the "rich" invested their money to make more of it?
Answer... all of the privately employed. Howard is "rich" in ideas and work ethic. He's just one example. And though he may never be a millionaire, he is rich in freedom.
Oh and Tyson doesn't know the difference between a live and alive.
"Jean-Jacques Rousseau was one of the most well-known intellectuals of the 18th century and was a live during what was known as France’s age of Enlightenment."
So why should I read anything he writes when he can't proofread? We aren't talking some crap post on the internet, we are talking an essay that he wants considered for its contained knowledge.
"Last year their CEO (of Verizon), Ivan Seidenberg,
received a raise of 48% which put his salary at $19.4 million. I don’t believe an increase
in pay is wrong, but when it is happening in a company that stock went down 26% and
froze the pension of 50,000 workers in the same year I believe there is a clear problem."
Who are you to determine why he gets paid what he does. Does it occur to you that he may have saved them from complete bankruptcy? Or that he might have instituted a plan to increase smartphone sales which make them more money then dumbphones? You obviously do believe an increase is wrong.
I say do away with all of the
I say do away with all of the IRS,EVERYONE pay a flat tax of 5-10% on anything we purchase or sell. That way no one "beats" the system,we'd have more money in our paycheck weekly,maybe people will buy more goods,more jobs might be created,etc,etc......Oh wait,that is TOO simple of an idea-they would all talk about it(and it has been floated around in the past,IIRC)but nothing will get done except raising fees and surcharges,not "taxes".....
I saw where the article was
I saw where the article was headed and stopped reading when it referenced the social contract and wealth distribution.
Federal taxes as a percentage
Federal taxes as a percentage of GNP are at a 60-year low.
http://blogs.reuters.com/felix-salmon/2010/12/06/chart-of-the-day-u-s-t…
I agree taxes are too complicated for most people, but the flat tax is an over-simplifed, unworkable idea that is highly regressive. Never gonna happen, so we might as well look at alternatives such as a more streamlined income tax combined with a national VAT tax.
Dennis, Why do you say the
Dennis,
Why do you say the flat tax would be unworkable? And how is everyone paying the same rate regressive?
This has been passed around
This has been passed around the email train for a while:
Bar Stool Economics
Suppose that every day, ten men go out for beer and 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 would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They 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 each end up being paid to drink his beer. So, the bar 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.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink 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. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? 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 the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our 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 anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics
University of Georgia
"[A] wise and frugal
"[A] wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." - Thomas Jefferson