Derec

He forgot the minus sign.

UMoC

Happy Wonderer

One thing to remember is that the poor pay an extremely high percentage of their income in non-income taxes, even if they pay no federal income tax at all. The federal portion of the gas tax is $0.18/gallon and is not refunded to poor people. (Even if they don't own a car they pay this tax indirectly if they use public transportation, or if they pay for the services of anybody who does own a car.) It seems like nothing at all to those of us on the internet who can afford a computer, but it is a pretty big chunk of a part-time minimum wage income -- consider that the poor usually can't afford to live near where they work...

I happen to own a house that I have not been at for a few months, and I notice that I still pay over $150/month in taxes, connection fees and bunches of other stuff unrelated to consumption. (These are state/county taxes and fees, although I think some of them are the results of federally-mandated programs.) Even if they don't own a house, the poor pay these taxes as part of their rent.

A good sized portion of the phone bill for this house is in various taxes and fees (although to be fair one of the taxes is to provide phone service to the poor.) Of course, there are also the 'sin' taxes.

It is an interesting exercise to add up all of the hidden taxes that you pay for one month and compare that to subminimum wage. It is impossible to get it completely right, since the milk you buy in the supermarket was delivered on a truck that paid tax on the diesel it used.

Interestingly my 'income challenged' friends (in Richmond CA years ago) had a sense of pride and anti-entitlement that should put the wealthy to shame. People who were clearly entitled to federal handouts refused to take them for reasons of pride. They also were excruciatingly honest and exact about such things as splitting the check or making payments. My rich friends were not, stiffing someone for small amounts of money seemed like no big deal.

Anyway, my thoughts. Probably off topic to a degree, but it explains why I think that all should get the credit. I would actually prefer that the credit only go to people in the lower tax brackets. The last rebate check that I got from the government made absolutely no difference to my life; it seemed like a waste of time and a bother to even have to take it to the bank. I wish I could say I did something socially useful with it, but I'm a lazy and selfish bastard, so I didn't...

hw

Jimmy Higgins

Lets suppose we have a household making $25,000, no kids. I can nearly guarentee that the money they get back, atleast $2000, would automatically go into the economy. No ifs ands or buts! Can you make that guarentee on someone who in making $5000 a year on dividend income, ie, having $300,000 in stocks alone (assuming $0.50 dividend at $30 a share). That person would be spending it regardless. But the person not spending the money would be the poorer person. Sure, it isn't alot, but I can say it would all go back into the economy. Say you give a 100% tax break to those making under $30,000. Even if only they got back $500, that would be $500 they'd spend AND it wouldn't cost the government at all!

Happy Wonderer

It can be even worse than that. The $5000 dividend income represents the same amount of money as a $0.50 difference in the share price (from $30/share.) What seems to make rich people feel wealthy is the total asset value, not the amount of money in the bank which at some levels becomes more of a bookkeeping matter than anything else.

So that extra tax break on the $5000 may not make this person feel any more wealthy -- so they may be likely not to spend that extra money. If they were used to that stock being at, say $80/share, they may feel pretty poor now and forego that extra meal out. (Strange but true story from the tech bubble: I have known people to cut back drastically on their lifestyle just because they lost a few hundred thousand, even tho they are still worth millions.)

hw

EDIT: here is another way to look at it. Although I wouldn't mind capital gains taxes being eliminated (especially if it could be retroactive to four years ago...) I would much prefer a sound economic policy that increased the value of my stock and real estate.

peacenik

Originally posted by UglyManOnCampus
This same old canard by another conservative cronie. Why is it that you people conveniently forget that the poor and middle class pay 15% of everything they earn into Social Security while the rich, because of the cap on the payroll tax, pay a very small percentage of their income in the regressive payroll tax. Also, why do you people forget that the poor and middle class pay a larger percentage of their income than the rich in state and local taxes, which are also largely regressive. When you look at the OVERALL tax picture, of which the federal income tax is only a small piece, the poor and middle class pay more than their fair share. This tax cut by Bush would solely benefit the rich, while state and local governments, who unlike the feds must balance their budgets, will raise taxes on guess who, the middle class and poor. Why do conservatives, who claim to be so fond of state and local goverment, always neglect to mention state and local taxes when trying to describe how the rich are too highly taxed? Are they so narrow minded that they can't see the entire picture?

http://www.ctj.org/html/whopays.htm

http://www.ocpp.org/2003/nr030107.htm

http://www.uvidaho.org/ICBTP/2003tax...g1-03p01-2.pdf

Make no mistake, Bush's tax plan would not generate any economic growth!! However, even if his tax cut could benefit the national economy the benefits would be more than offset by the tax hikes that are inevitable at the state and local level. Conservatives seem to forget that it is demand and consumption by middle and lower income people that drives the economy, not supply! Bush's tax cut will do absolutely nothing to stimulate consumption by the marginal consumer(i.e. the poor and middle class of whom many are now unemployed). All it will do is allow the rich to hoard up even more money at the expense of the average hard working Americans whom these fat cats make their living off of!!

If Bush was serious about stimulating the economy, he would scrap his current tax plan; bail out any states that are even considering tax hikes(which would mostly fall on those who can least afford to pay more taxes); and cut the federal payroll tax for working class Americans by raising the current cap on the federal payroll tax.

ex-idaho

For those of you out there saying that the families that fall into the $10,500 to $26,000 range didn't pay any or enough taxes to benefit from the eliminated portion of the tax bill I say bah! This particualr portion of the tax bill was not based on taxes paid. It was a credit not a refund. This portion of the tax bill was a retroactive adjustment of the child tax credit raising it from $600 to $1000. All you had to do to qualify was have dependent children living at home and have filed a return for the year 2002.

The Republicans should be ashamed, Bush should be impeached and the Dems should be apologizing to every single poor and middle class American right now for failing to defend them from the tax raiders.

Lutnick

[QUOTE]Originally posted by peacenik
Originally posted by UglyManOnCampus


B]This same old canard by another conservative cronie. Why is it that you people conveniently forget that the poor and middle class pay 15% of everything they earn into Social Security while the rich, because of the cap on the payroll tax, pay a very small percentage of their income in the regressive payroll tax.

Because the poor make out exceedingly well on the benefits side. The payroll tax deductions are regressive, yes, but benefit formula (and the system as a whole) is extremely progressive.[

peacenik

The benefits for social security do help out the poor more than they help out the rich, but that is only one federal program and as you know the idea that the SS payroll tax actually goes into a trust fund is a hoax anyway; it all goes into the general revenue stream. Once again Conservatives like you ignore the full picture. First you failed to address the fact that state and local taxes are regressive. Second, you point out one federal program that happens to disproportionately benefit the poor and middle class while ignoring the vast majority of government programs that benefit the wealthy including subsidies, grants, and other forms of money for R&D for major corporations, the humongous military industrial complex that benefits corporations from Boeing to Halliburton that President Eisenhower so eliquently warned us about in his last major address to the nation, K-12 public education which tends to be better funded in well-to do communities than in poor communities, subsidies for higher education(not including financial aid like Pell grants or loans, but the general subsidies that all students benefit from in the form of lower tuition bills disproportionately benefit the wealthy since a higher percentage of the wealthy send their children to College and Graduate or Professional School; don't get me wrong I thing that states should promote higher education; I just look forward to a day when everyone can send their children to college regardless of their socio-economic background). Additionally many governmental programs benefit everyone regardless of their socioeconomic status including things like the interstate highway system, the FDA, the EPA. Also you fail to acknowledge the costs that society imposes upon those with less money due to the fact that they typically have less political clout for numerous reasons. It is no accident that toxic waste dumps, landfills, and prisons typically get built in less afluent communities. Additionally, corporations are much more likely to get by with passing part of the cost of their production off in the form of POLLUTION in communities where the economic condition is poor. It's convenient for Conservatives to say that the rich get soaked by taxes and that the poor get all of the benefit from governmental programs, but the fact is that it isn't true. It's a conservative lie. We need a government that ends corporate welfare and that provides real opportunities to those who are poor, but the only way that this will ever come about is if we have a system of democracy where the politicians aren't bought and sold by special interests. A significant step toward such a government would be creating a public campaign finance system, which I proposed in this thread:

http://www.iidb.org/vbb/showthread.php?threadid=52439

Anyway, perhaps someday some of you conservatives will see the whole picture rather than the narrow worldview that has been painted for you by idiots like Rush Limbaugh, Michael Savage, George Bush, Paul Wolfowich and all of the other neo fascist bastards who just want to empower wealthy corporate businessMEN(they believe a woman's place is in the home) at the expense of the poor and downtrodden.

ex-idaho

The system is really not very progressive at all. As it stands now a person making $50,000 annually like myself pays at the rate of 27%. A person making $350,000 annually pays at a rate of 35% At one time the highest rate in the US was 98% (WWII era). Currently the tax code in the US is the least progressive in US history.

Happy Wonderer

I do not know what program you are referring to here. Social security benefits are based upon payments into the system; people making greater income (to a point) make more from the system than people with lesser income. That is not a progressive system as far as the poor are concerned and doesn't support the idea that the poor make out well on the benefits side.

If you are saying that the poor generally get more out of welfare programs than they put in, well yeah -- that is kind of the point of a welfare system. However, note that welfare benefits are reduced as the poor's income rises, so in theory it is a flat benefit; the goal is to raise everybody up to a certain minimum subsistance level. (Starvation in the streets not being considered a good thing for the image of the world's richest nation...) The benefit actually ends up being regressive due to state taxes, literally you can end up taking home less money the more money you earn, since your benefits are reduced by more than your effective take-home. (Pretty crazy, IMO.)

I think that everybody will agree that the system is screwed up from almost whatever perspective you have on it. That is nothing new. Come up with a solution and let's discuss that.

You have to note that there is a built-in regressive system to the world. For example, if you don't have medical insurance, you pay full price for any medical procedure. If you bill through insurance, procedures can be from %30 to %50 less expensive because of the negotiation between the doctor and the insurance company.

It is cheaper to be wealthy than it is to be poor!

hw