Where is the US economy headed?

okie: Plus, to remind you, the percentage of people that pay absolutely no income tax in this country approaches 50%, so how can Bush be accused of punishing the poor with taxes?

Straw man; nobody argued this point about the poor.

As for the tax credits, it depends on a) number of children, and b) phase out limits. The maximum benefit if $4,538 at the lower limits of income - of about $14,000. That's still "poverty income" no matter where you live.

0 Replies

cicerone imposter wrote:

okie: Plus, to remind you, the percentage of people that pay absolutely no income tax in this country approaches 50%, so how can Bush be accused of punishing the poor with taxes?

I agree with CI that no one here has made this claim.

But I'm curious where you are getting your "50%" number.

0 Replies

It isn't yet 50 percent, but the figure is on the rise last time I looked, and this site supports that, up through 2004. In 2004, it is about 44%.

http://www.heartland.org/Article.cfm?artId=15281

"In addition to these zero-tax filers, roughly 14 million individuals and families will earn some income but not enough to be required to file a tax return," noted Moody. "When these non-filers are added to the zero-tax filers, they add up to 58 million income-earning households who will be paying no income taxes," he said.

Even 58 million is an undercount, Moody noted, because one tax return often represents several people. When all of the dependents of these income- producing households are counted, roughly 122 million Americans--44 percent of the U.S. population--are entirely outside of the federal income tax system.

This is good and bad, maporsche, as it helps lower income folks, but it disenfranchises them from being vested in the portion of the population that has the personal incentive to see their government control spending and taxation. In other words, if I don't pay for it, I am more inclined to want the government to provide it or do it.

Earners still pay into Social Security, but technically this is a retirement fund, not a tax, if you want to believe it.

P.S. Note the graph shows a considerable rise in non-payers since 2000, which seems to indicate that tax policy during the Bush years have increased tax assistance to lower incomes more than past administrations.

0 Replies

okie, Most people would prefer to have jobs that pays a living wage rather than a handout from our government. Bush isn't helping anyone; even more middle-class families are falling into the poverty pit, and seven million more Anericans are without health care. People would rather pay their own way, but when salary doesn't keep up with inflation while fuel and insurance costs increase at double-digit rates, more families fall into poverty.

People don't want government dole-outs; they want jobs. It's called having pride.

0 Replies

I agree with that, ci, but at least the earned income credits are earned because of working. If you don't work, you don't get them.

Also, this has not been brought up lately, but as the world continues to become more like a world market, this country is less insulated from the market pressures of the world, where wages may be considerably lower. Our cushy lifestyle has been supported by our somewhat insulated economic environment. That insulation continues to be worn away, however, and as that continues to happen, more sectors of our economy become more affected.

Take manufacturing for example, we once enjoyed a higher standard in terms of current dollars because of unions bargaining for very high wages and benefits. Car manufacturers for example, we now see domestic companies struggling and we are paying the price for those standards in the marketplace, and to compete, we are being forced to scale down our expectations in terms of wages and benefits. We all see the Chinese merchandise in stores, the reason is those people are producing the stuff at a much lower cost, and we are forced to rethink our wage scales if we are to try to manufacture the same stuff at a competitive price.

If you understand economics at all, ci, you would see that all of the effects now observed are in large part due to a reshuffling of the marketplace, and I think a few decades down the road, if the world still stands, the lifestyle in all countries are going to grow more similar, simply because the free market is spreading more evenly throughout the world, rather than being a national phenomena. This has always been the case to an extent, but it is growing by the day.

So, the guy with no education or skill in this country cannot continue to expect to live better than somebody, say in India or China, simply because they live in the U.S.A. Maybe now, but what about 20 years from now? We also have a trade imbalance, no small part being oil imports, and the Democrats refuse to expand drilling as we should. We also need to totally revamp our educational system in order to compete at all, and again special interests and Democrats don't want it.

The point of all of this is the president is not totally responsible for all of these trends. We need tax reform, education reform, and all kinds of other reforms to avert future erosion of our ability to compete.

0 Replies

okie, Good post; your analysis is sound.

The only disagreement I have is with the Bush tax cuts that has benefited the rich, and not much of the middle class or poor. That's the reason more families have fallen into poverty. Tax cuts cannot be justified for the rich when we are trying to pay for a war; it's not fair to encumber our chiuldren and grandchildren for current political decisions.

Large federal deficits also hurt the long-term economic potential for our country, because our country's decaying infrastructure handicaps our schools, transportation, and communnication - all necessary to compete in the world marketplace.

A strong, stable, middle-class is necessary to keep any economy strong. We are losing this battle.

0 Replies

ci, every once in a while, we agree, and even though you are good at sarcasm, as I also make a stab at doing, but I give you credit for at least posting your opinions with reasons, and you deserve credit for acknowledging agreement once in a while.

We are of course on opposite sides to the Bush tax cut argument. The way I see it, the tax cuts benefit more wealthy people because of one primary reason, they are the ones paying taxes, and as my link showed, an increasing percentage pay no tax at all. I would also argue that the expansion of the earned income credits do in fact benefit the poor, even though they pay no tax, and my links prove that, asserting that they are one important hedge against falling below the poverty line, even though to be accurate, the poverty statistics don't even include that money. But simply providing tax breaks for the more wealthy is not just to help wealthy people, it is primarily for longer term economic purposes. We don't agree on the Laffer Curve, but as George has argued well, taxcuts do at least sometimes spur the economy. There are other factors overlaying tax policy, so we will continue to argue about the actual effects of taxcuts at various times, but I don't believe the policy is conducted simply to help rich people, and there is no way you can convince me that rich people pay a lower percentage of their incomes in taxes. They continue to pay a disproportionate majority of income tax.

A primary point about benefiting the rich with tax breaks, one mans tax break is another mans tax incentive. Tax breaks are enacted to encourage aspects of the economy, on purpose, ultimately to benefit everyone as a whole. The oil industry is a good example. If you would travel around Oklahoma, you would see more oil and gas activity. Yes, this benefits the companies, but it benefits the towns, the laborers, the farmers, and everyone else in the economy of these areas, plus hopefully enhancing supplies and moderating prices for these products for all citizens. Without oil and gas activity, I can tell you that alot more farms would have been sold and would have probably gone into the hands of the wealthy. It has been one significant hedge in preserving the small farms across America.

0 Replies

here is a slightly outdated article from 2005 - couldn't find anything more recent - , but from listening to the news , the situation hasn't gotten any better over the last few years . iif anything ... you fill in the rest !

btw. the situation is no different in canada .
(as an added tidbit : a former canadian prime minister has been accused of accepting $225,000 from a lobbyists [the lobbyist claims it was $300,000] . the former prime minister said : "i regret it very much , but while it was IMPRUDENT Shocked

, it was NOT illegal !" . btw he kept the CASH in two safety deposit boxes for three years before declaring the money and paying taxes - "THE DONOR" was about to testify before a committee :wink: )

Quote:

Monday, Apr. 18, 2005

High Earners, Low Payers

Everyone knows that the rich get richer. But not every day does the Government disclose how it happens. Last week the Treasury Department issued a report showing that in 1983 some 55,000 taxpayers with incomes exceeding $250,000 paid a lower percentage of their income in federal taxes than the average middle-income family of four. At least 1,900 of these high earners paid no tax at all.

The Treasury report showed that a family of four with an income of $45,000 paid an average of $6,272 in federal taxes in 1983. Yet some 30,000 taxpayers who made more than five times as much (above $250,000) paid the IRS on average less than twice as much (about $12,500) as the middle-income family. Those 30,000 represent about 11% of all taxpayers with incomes exceeding a quarter of a million dollars.

Perhaps even more striking, 3,170 taxpayers who earned more than $1 million in 1983 paid virtually no tax at all. In an accountant's terms, the Treasury study restates the rich-are-different theory: "These high-income, low-tax returns look very different from ... those of typical upper-middle-income taxpayers."

The study is sure to become a tool in the hands of politicians wrangling over plans to reform the federal tax system. "If anyone had any doubt about the unfairness of our present tax code," said Democratic Congressman J.J. Pickle of Texas, "these figures should convince them." Pickle, who requested the report, is advocating a minimum-tax provision on personal income. The study, said a White House spokesman, "shows that fat cats pay little or no money. It's a perfect example of why the President wants tax reform." But tax-reform experts point out that many of the major loopholes used by the wealthy would not be closed by the President's tax-reform plan.

Probably the most popular of the write-offs are limited partnerships, which have proliferated as tax shelters since the late 1970s and early '80s. An orthodontist investing in a real estate venture, for example, can deduct from his taxable income a share of the venture's losses based on the amount of his investment. Yet his actual liability is limited--hence the name of the arrangement--to the cash value of his initial in vestment. Thus if a partner invests $10,000, or 10% of a partnership's total investment, and the venture loses $700,000, he will be able to write off $70,000 but will be liable for only $10,000. The study revealed that such losses on limited partnerships (about half of them in the real estate and oil industries, both areas that receive generous tax breaks) exceeded or offset the entire incomes of the 1,900 high earners who paid no taxes at all.

In 1982 more than half the partnerships in the real estate and oil-and gas-drilling industries were losing propositions, a sure sign that they were being used as tax shelters. States the Treasury report: "The rapid growth in the number of partnerships reporting losses would lack a sound business rationale if it were not for the ability of many taxpayers to use the tax losses ... to shelter other income from taxation." Pickle is now asking the Treasury for another study that will pinpoint the sections of the current tax code that are being abused. "No law has been violated," he says. "But the tax code should not allow the accumulation of shelters."

source :
NO NEED TO PAY TAXES

0 Replies

It is true that for every IRS rule, the tax advisors for the wealthy are looking for a way around it, and assuredly, the rich use expenditures into various ventures as a way to write off things. I am going to point out another of the numerous ways to do things if youhave money, I have noticed that celebrities like to buy ranches, then run a few cattle and hire a foreman to supposedly lose money on a ranching operation or at least shelter alot of the travel perks as they use the property as their own vacation retreat for themselves and their friends.

Another factor that may be at work here is the Social Security taxes and I'm not sure if your article's statistics include that. Without knowing what incomes they are referring to, and the taxes included, it is impossible to verify the accuracy of the claims made in the article. For example, with the Social Security taxed maximum of around $90,000, that would be about the amount where people are hit the hardest in terms of percentage of their incomes being taxed. For incomes of double that, the taxpayer only has to deal with income tax on the second 90,000, but escapes the Social Security tax on that portion. For the self employed, the 15% tax bite for Social Security and Medicare on net income is inescapable, there is no way to avoid it. For many taxpayers, this tax is more far more severe than income tax, but is seldom discussed or reformed in Congress. And another point, Social Security is paid on earned income, not income on investments by rich people, so to understand the statistics in the article, more information is needed.

This continues to fall upon deaf ears, but I am one of an apparently small minority of the population that favors the retail sales tax and doing away with the IRS. This happens to be one of the good ideas of Huckabee. I don't see it ever happening because the IRS is one of the most prized possessions of politicians to exert power over the people.

0 Replies

On the ither end ithe IRS code nightmare is the Alternative Minimum Tax that now impacts some 20 million middle class families. The AMT was implemented to hit the wealthy in this country, and has outlived its purpose, but congress has yet to eliminate it from the code. They talk, but do not act.

0 Replies

I would love to look at Ted Turner's tax return, with all of his land holdings around the country and see what profits or losses he is showing for these properties. It would be fun to examine the tax returns of many movie stars also, and see what they report for their "little" ranches they own in Wyoming, Montana, Utah, Colorado, and everywhere else.

0 Replies

Bush's Record on Jobs: Risking Comparison To a Republican Ghost

By DAVID LEONHARDT
Published: July 3, 2003
For George W. Bush, the race has begun to escape comparisons to Herbert Hoover.

With more than two million jobs having disappeared since Mr. Bush took office in January 2001, he finds himself in danger of becoming the first president since Hoover to oversee a decline in the country's employment. Economists disagree on how much blame, if any, Mr. Bush deserves for the long slump, but even White House aides view the economy as one of the only big threats to his re-election campaign.

Now, a turning point could be approaching. The Labor Department will release its jobs report for June this morning, and some forecasters are predicting that it will mark the beginning of a rebound. An increase in the nation's payrolls -- the odds of which are roughly even, Wall Street economists say -- would be the first since January.

Then the real test for the Bush administration will start. Mr. Bush has called the recently passed tax cut the main reason for economic optimism, and administration officials have repeatedly referred to it as the ''jobs and growth'' plan, part of its official name, to emphasize its goal.

''Listen, I'm interested in one thing,'' the president said during a rally last month in Fridley, Minn., to promote the tax cut. ''I'm interested in helping people find work.''

The middle-class lost buying power and jobs since Bush promoted his tax cuts for his "jobs and growth" mantra. The proof that jobs and growth isn't happening is Bush got his tax cuts, but a) over seven million more Americans are without health insurance, b) more Americans increased their debt, c) on the other end, decreased their savings, d) many will be losing their homes from the subprime mortgage, and e) our country's infrastructure is falling apart while we spend 2.7 billion in Iraq every week - essentially mortgaging our children's future, It doesn't take a rocket scientist to figure that we have some two million students graduating from high school and college every month, and job creation just doesn't meet that demand. The government's unemployment statistics showing less than five percent fails in simple logic. .

0 Replies

Another Day, Another Meltdown
(This is in my words sourced by NPR and the BBC)

Morgan Stanley, one of the premier investment houses, announced today that it lost more than $3 billion in the third quarter of 2007, and will be taking a write-down of more than $9 billion on the loans on its books. This write-down reflects money they never expect to collect.

Morgan Stanley joins a cluster of many other banks based in the U.S. as well as outside the U.S. which invested heavily in the sub-prime mortgage lending market.

Morgan Stanley also announced that the Chinese government will invest $5 billion to buy a 10% share of the company. Citigroup sold about an equal amount of its ownership to an investment company in Abu Dubai a couple of weeks ago,

The Chinese government reportedly holds about $200 billion in U.S. dollars.

0 Replies

Quote:

Forbes Market Briefing

Chinese Cash Plugs Morgan Stanley's Hole
Evelyn M. Rusli, 12.19.07, 9:05 AM ET

Wall Street will focus on Morgan Stanley on Wednesday, as the credit crisis goes from bad to worse.

Before the opening bell, Morgan Stanley announced more than $9 billion in subprime losses for the fourth quarter. The investment firm all told lost $3.6 billion, or $3.61 a share, which was well beyond expectations for a loss of 39 cents a share.

The company also announced that it will get a $5 billion cash infusion from government-controlled China Investment Corp.

Calling the quarter "deeply disappointing," Chief Executive John Mack said he will not take a bonus this year.

who would have ever thought that those COMMUNISTS would have to come to the rescue of such american giants as morgan stanley ?

but after citibank and UBS had to look for help from asian and dubai banks , it''s perhaps not so surprising .
hbg

0 Replies

The financial world of the US is falling apart, and Bush supporters still believe Bush is doing a great job on our economy. Go figure.

0 Replies

i recently purchased US$500 and had to pay CAN$496 including commission !
while i liked the exchange rate , it does make me just a tad uneasy because whatever is happening in the U.S. will likely have some serious spillover into canada within the next year or two .
it actually has started to effect the canadian economy already : lumber and car shipments to the U.S. are down considerably and mill operations are starting to shut down !

as PET(prime minister trudeau) used to say : "when you are the mouse sleeping next to the elephant , watch it when the elephant turns over in his sleep ! "
hbg

0 Replies

hbg, The fact that the US and Canada are hooked at the hips (rhetorically speaking), when we cough, Canada will catch a cold.

As you say, the downturn in the US economy is already affecting Canada. Unfortunately, it's gonna get worse next year, and nobody knows how long this downturn is gonna last. The sickness is gonna last for more than a few months, I'm afraid. Worse than the flu season.

0 Replies

ci and hamburger, isn't it correct that the devaluation of the dollar is not all negative, as it eventually helps us to compete with other countries in manufacturing and other products and raise our exports?

0 Replies

okie wrote:

ci and hamburger, isn't it correct that the devaluation of the dollar is not all negative, as it eventually helps us to compete with other countries in manufacturing and other products and raise our exports?

okie continues to look at the positives while the world around him is on self-destruct mode. That takes a special skill, but I'm at a loss as to understand what that special skill consists of.

0 Replies

okie wrote:

ci and hamburger, isn't it correct that the devaluation of the dollar is not all negative, as it eventually helps us to compete with other countries in manufacturing and other products and raise our exports?

Sure, heck; think about how nice it will be when other countries want to put their factories here, b/c we will work for so cheap. Really sounds like progress for the US, doesn't it? Let that dollar drop, hey!

Careful what you wish for

Cycloptichorn

0 Replies

Where is the US economy headed?

Related Topics

Quick Links

My Account

able2know