Bush Tax Cut - Round 2

BOBDN

Banned
May 21, 2002
2,579
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An editorial from today's NY Times.

This must be what they mean by "compassionate conservatism."


I especially like DeLay's line, "There are a lot of other things that are more important than that." This from a guy who recently used the federal Office of Homeland Security among other federal agencies for his own personal political purposes in Texas. I guess that was one of the things that are more important.

"The Poor Held Hostage for Tax Cuts

Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory. Now, with consummate arrogance, Republican leaders in Congress are threatening another irresponsible tax-cut bidding war as the price for repairing the damage. "There are a lot of other things that are more important than that," said Tom DeLay, the House Republican majority leader, signaling that revisiting the child-care issue will open the door to even worse deficit-feeding tax-cut plans. Mr. DeLay at least offered unabashed candor instead of the crocodile tears of other Republicans. They are now embarrassed over the furor that low-income families were deleted in the final G.O.P. deal on the tax-cut boon weighted so shamelessly last month to favor the wealthiest Americans.

There is a clear and sensible solution to restore the $400 child-credit increase to the working poor in a Senate proposal from Blanche Lincoln, Democrat of Arkansas, and Olympia Snowe, Republican of Maine. Their measure, which would cost $3.5 billion and help nearly 12 million children, would be paid for by eliminating some of the tax-shelter abuses that fed the Enron scandal.

Republicans are scrambling for political cover now, fearing the wrath of the mythic soccer-mom voting bloc next year. But the rival child-care solution being offered by Senator Charles Grassley, Republican of Iowa and the finance chairman, introduces a whole new scale of irresponsibility to the tax-cut games. This would expand the credit to 6.5 million low-income households, although not to minimum-wage earners of less than $10,500 a year. But at the same time, the upper-bracket limit would be generously, gratuitously raised another $40,000 to benefit families earning up to $189,000, hardly the neediest among us. Plus the credits would be made permanent instead of temporary, as currently enacted.

This makes it a $100-billion-plus budget-busting measure lacking the cost offsets of the sane and prudent Lincoln-Snowe approach. The fiction of Republican leaders' promises to contain the deficit damage of their tax cuts is becoming clearer with each wad of debt rolled onto future generations."

 

shiner

Lifer
Jul 18, 2000
17,116
1
0
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.
 

308nato

Platinum Member
Feb 10, 2002
2,674
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The first paragraph was all I could finish. Pravda is just so hard to get into sometimes.
 

CPA

Elite Member
Nov 19, 2001
30,322
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Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.

Took the words right out of my mouth. Unfortunately some people, BOBDN, HJD1, Moonbeam will never ever understand.

 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Like the other thread about the taxcut - we talked about this proposal by Grassley. I find it hilariously funny that the same people who were responsible for putting a cap (350billion) on the first tax cut acctually want more now

Question is, will they vote for a taxcut package "for these poor helpless people viciously cut out of the first tax cut" or if they'll be "fiscally responsible" Remember, this money is being "borrowed" and "costs" us money



Politics can be hilarious at times.

CkG
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
Originally posted by: CPA
Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.

Took the words right out of my mouth. Unfortunately some people, BOBDN, HJD1, Moonbeam will never ever understand.

Well... edify me...
But, first consider that the point of the tax cut was to put $ into the economy. Handout, Tax cut, Tax credit, welfare, whatever. The point is to put $ into the economy! These folks paid in FICA on all their income but, can the same be said of the 150,000$ salary earner (not medicare but FICA)?
Having said that however, I don't feel the tax cut was well directed at all. It should have been as Ultra Quiet suggested; A credit to Er's who rehired the unemployed or hard core unemployed. This would have done much more to stimulate consumption and offset cuts with inflow... No?

 

Vic

Elite Member
Jun 12, 2001
50,415
14,307
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If you don't actually pay taxes, you don't deserve a tax cut. It's as simple as that.

And FICA is for Social Security. However, if you want to compare both FICA and income taxes paid between a low-income earner and that $150k earner, I guarantee you that the $150k earner (including both FICA and income taxes) paid considerably more than the low-income earner both in dollar amount AND as a percentage of their income.
With FICA their only real tax burden, and not counting the possibility of any handouts... I mean, "credits," the low-income earner pays roughly 7.5% of their income in Federal taxes. OTOH, the $150k earner pays at roughly the 33% tax bracket plus pays 7.5% FICA until the $89,000 cap. Assuming some generous and creative deductions, it is relatively safe to assume that the $150k earner pays roughly 35% of their total income in federal taxes alone (although individual tax returns do vary). For those of you who don't get it, that's more than $50,000 dollars. And that's before they pay any state or local taxes.
Get a clue, people.
 

BOBDN

Banned
May 21, 2002
2,579
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Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.


What makes you think these people don't pay any taxes?
 

Zebo

Elite Member
Jul 29, 2001
39,398
19
81
Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.

Do you know what a credit is? Clue: it's not a check.
 

HappyPuppy

Lifer
Apr 5, 2001
16,997
2
71
The NY Times? You mean that rag that has been totally discredited and their two top editors just resigned in shame?
 

MonkeyK

Golden Member
May 27, 2001
1,396
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Originally posted by: Vic
If you don't actually pay taxes, you don't deserve a tax cut. It's as simple as that.

And FICA is for Social Security. However, if you want to compare both FICA and income taxes paid between a low-income earner and that $150k earner, I guarantee you that the $150k earner (including both FICA and income taxes) paid considerably more than the low-income earner both in dollar amount AND as a percentage of their income.
With FICA their only real tax burden, and not counting the possibility of any handouts... I mean, "credits," the low-income earner pays roughly 7.5% of their income in Federal taxes. OTOH, the $150k earner pays at roughly the 33% tax bracket plus pays 7.5% FICA until the $89,000 cap. Assuming some generous and creative deductions, it is relatively safe to assume that the $150k earner pays roughly 35% of their total income in federal taxes alone (although individual tax returns do vary). For those of you who don't get it, that's more than $50,000 dollars. And that's before they pay any state or local taxes.
Get a clue, people.


Stetching a point more than a little here. The 33% tax bracket does not pay 33% on all income, just the part over the previous tax bracket. My household makes roughly 150K and I assure you that I do not pay anywhere near 50K in federal tax.
 

bigdog1218

Golden Member
Mar 7, 2001
1,674
2
0
Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.

Whats wrong with helping people that need help. This country has turned into a bunch of spoiled selfish brats.

 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: BOBDN
Originally posted by: shinerburke
After reading the opening sentence "Millions of low-income families were cruelly denied child credits in the administration's latest detaxation victory" I immedietly stopped reading. You can't give a credit to people who pay no taxes....that's not a credit....it's a handout.


What makes you think these people don't pay any taxes?

I just ran a quick and dirty hypothetical through my tax software.
Both parents work earning 13,000 each for a total of 26,000
Filing married but separate.
Now I also entered in that neither had any taxes withheld from their checks to ease the comparison.
I also didn't include any daycare expense either (which would probably lower their taxable income)

Here are the results based on 2002 tax code using my software.

Adjusted gross income: 26000
Deductions: 3925
Exemptions: 9000
Taxable income: 13075
Tax: 1661
Tax credits: 1200 (<--- currently $600 per child)
Amount owed: $441

Now remember they had $0 withheld in this scenario so their total payments for that year come to $441 on the Federal side. If you consider that the child tax credit is supposed to be upped to $1000 per child this imaginary couple would actually be getting money back from the federal gov't even though they didn't pay a cent in taxes.
....
Tax: 1661
Tax credits: 2000 (<--- if $1000 per child)
Amount refunded: $359

Keep in mind that this couple didn't even qualify for EIC since they filed a married but separate return.

Any questions?

CkG
 

Zebo

Elite Member
Jul 29, 2001
39,398
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Where does exemptions come from...ie what are you assuming.
 

MonkeyK

Golden Member
May 27, 2001
1,396
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81
Originally posted by: CADkindaGUYAny questions?

CkG

Yeah,
How the heck can someone afford to raise two kids with both parents working when they only make 26K/year?
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: Carbonyl
Where does exemptions come from...ie what are you assuming.

Assuming no deductions other than standard deductions. It doesn't give me a good readout of deductions - i've been trying to find them in detail. In this scenario I had no special exemptions or credits.

How the heck can someone afford to raise two kids with both parents working when they only make 26K/year?
I don't know - but I know it really sucked raising one kid making just a hair more than that

Edit - I chose 26000 because I wanted to be just under that mystical ~26500 people keep floating around. - just an example I guess.

CkG
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
I printed out the forms it spit out.

1040 page1
1040 page2

What I entered was 13000 each in wages.
No special deductions - everything was a plain vanilla standard deduction.

I'm no accountant, but I thought I'd put it through the software I use just to see.
Oh I use TaxAct (and yes I purchased the upgrade )
If you want to know - they would owe approx 1143 in Iowa state taxes but that is with leaving as much as I could blank too many "depend on" type questions.

CkG
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Oh, and you really don't want to see the numbers if they file as just plain "married" ~$2300 refund without the extra boost in child tax credit. The EIC alone is ~1700 :Q

Bah, whatever though. I'm just thankful I no longer have to worry about such things.

CkG
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
Originally posted by: CADkindaGUY
Oh, and you really don't want to see the numbers if they file as just plain "married" ~$2300 refund without the extra boost in child tax credit. The EIC alone is ~1700 :Q

Bah, whatever though. I'm just thankful I no longer have to worry about such things.

CkG

Not gonna file are we? Wanna Make Dough but, No Tax hmmmm... maybe I've missed the point... have I?

Three letters IRS... opps maybe you've hired an accountant... they're the bomb..
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
Originally posted by: bigdog1218
How the heck can someone afford to raise two kids with both parents working when they only make 26K/year?

Exactly.

Ya move to Lybia or somewhere like that.... 26K$ pays for the electric bill and maybe the water bill.

 

rufruf44

Platinum Member
May 8, 2001
2,002
0
0
Originally posted by: HJD1
Originally posted by: bigdog1218
How the heck can someone afford to raise two kids with both parents working when they only make 26K/year?

Exactly.

Ya move to Lybia or somewhere like that.... 26K$ pays for the electric bill and maybe the water bill.


Good grief, all of you people live in SF or something? $26K is enough for a family of five. They'll drive a beater, live at a low rent apartment and can't afford vacations and lots of gadgets, but they'll survive, especially in the south where cost of living is lower.


 

MonkeyK

Golden Member
May 27, 2001
1,396
8
81
26k may be enough for a family of 4 (or poss even 5) if it is made by only one wage earner. But there is no way that a family of 4 with both parents working is gonna make it.

I'm glad that I am not in that boat, but I can definitely see someone in it needing all of the help that they can get.
 

CADsortaGUY

Lifer
Oct 19, 2001
25,162
1
76
www.ShawCAD.com
Originally posted by: HJD1
Originally posted by: CADkindaGUY
Oh, and you really don't want to see the numbers if they file as just plain "married" ~$2300 refund without the extra boost in child tax credit. The EIC alone is ~1700 :Q

Bah, whatever though. I'm just thankful I no longer have to worry about such things.

CkG

Not gonna file are we? Wanna Make Dough but, No Tax hmmmm... maybe I've missed the point... have I?

Three letters IRS... opps maybe you've hired an accountant... they're the bomb..

Yeah, you missed the point I meant that I no longer have to worry about paying too little in taxes Sorry - I should have been clearer

CkG
 
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