Let me know what kind of spin you guys want to put on this...
Quote:CUTTING TAXES FOR THOSE WHO DON'T PAY THEM
NCPA Daily Policy Digest ^ | June 3, 2003 | Editorial
Posted on 06/03/2003 11:54 AM PDT by bruinbirdman
The new $350 billion tax bill exempts another three million-plus low-income workers from any federal tax liability whatsoever. It also expands the 10 percent income tax bracket, meaning that workers can earn more before leaping into the 15 percent and 25 percent brackets.
However, some workers who owe no federal taxes are not eligible for the bill's increased child tax credit of $1,000 for families with children. These families were not eligible for the partially refundable $600 child credit in the 2001 tax bill, but they do receive the Earned Income Tax Credit (EITC).
o Sen. Charles Grassley (R-Iowa) wants to make low income families who owe no federal income taxes eligible for the child tax credit, by making it refundable.
o These families do receive the EITC, which was designed to offset payroll taxes and is also refundable -- which means the government writes a check to people whose income after deductions is too low to owe any taxes.
o This includes families with about one in six children.
o In 2000, EITC payments totaled $31.8 billion for 19.2 million Americans, for an average credit of $1,658. Some 86 percent of the EITC went to workers who had little or no income tax liability.
Since refundable credits phase out as income rises, they raise marginal tax rates on workers with incomes in the phase-out range.
Critics of the tax bill have complained that most of its benefits go to higher income workers, but that is because they pay most income taxes:
o Internal Revenue Service data released late last year show that the top 1 percent of earners paid 37.4 percent of all federal income taxes in 2000.
o The top 5 percent paid 56.5 percent of federal taxes, and the top half of all earners paid 96.1 percent.
In other words, even before President Bush started slashing taxes on the poor by increasing the child tax credit in 2001, the bottom 50 percent of filers had next to no federal income tax liability.
Source: Editorial, "Even Luckier Duckies," Review & Outlook, Wall Street Journal, June 3, 2003.
au1929 wrote:I am trying to point out to you that his only economic policy is tax cuts. Do you think that will solve our economic difficulties.
Yes, I think that cutting taxes will play a crucial role in solving our economic difficulties.
While I'm happy to be receiving some tax relief this year, I'd personally like to see a complete overhaul of the taxation system. Like elimination of income tax, estate and property taxes, any tax other than sales tax based on the value of an asset (like California's Vehicle License Fee, why should I pay more to drive a new car than an old one - it makes no sense in any way).
Just imagine an IRS 1/20th the size it is today. While I'm no expert or proponent on the subject, I think the Fair Tax Initiative is a step in the right direction. It at least deserves consideration. Consumption, service, and usage based taxes allow you to pay your taxes at your own discretion, to a point.
Scrat wrote: Yes, I think that cutting taxes will play a crucial role in solving our economic difficulties.
I agree in principle. But the particular tax cuts pushed by the Bush administration will mostly occur several years down the road, when the economy will be out of the doldrums anyway. Moreover, an overproportionate share of the tax cuts goes to the upper few percent, who are least likely to spend it. Given that, how are the Bush tax cuts supposed to solve America's economic difficulties, which consist mostly of a short term shortfall in demand, according to mainstream economists?
Could you please explain to me how this is supposed to work?
-- Thomas
Thomas, There are two poles (or two schools of thought) on this subject of taxation. One side says the rich already pay their fair share. The other says, the rich can afford to pay more. Who's right, and who's wrong? Actually, neither is right or wrong. There are many things in life that seems unfair to the majority. How one reconciles what they see as unfair can take on many forms and ideas - some inane, and some somewhat logical. If we can accept that nothing in life is perfect, we must assume that a form of taxation is necessary to run any form of government. Without it, we would have no social overhead capital such as schools, highways, public transportation, and a military to protect our interests. What one may call mandatory social needs, another may call extravegance. The twain shall never meet; that's a given in most things in life. If an individual benefits from the environment in which he/she lives to accumulate great wealth, are they responsible to contribute to societies' greater good? I think the answer to that question is "yes." The next question becomes, should they also provide enough in taxes to help those unable to help themselves? I think the answer is still "yes." The third question is, should they provide enough in taxes to help poor people in our country, and to what extent? The answer becomes a bit fuzzy at this point, depending on one's perspective. My answer is still "yes," but I know that many will answer "no." We are not wealthy, but we are lucky to live in this country we call the US of A. It provided us with the opportunity to accumulate some assets which by world standards is very good. As an individual, we can donate to charity to help the poor, and we do. Should the extremely weathy be required by taxatioin to help the poor? I'm not sure, because my perspective is different from you, and you, and you. c.i.
cicerone imposter wrote:Thomas, There are two poles (or two schools of thought) on this subject of taxation. One side says the rich already pay their fair share. The other says, the rich can afford to pay more. Who's right, and who's wrong?
It makes no difference to the point I'm making. Whatever pole you're on, you'd never argue in earnest that the top 5 percent's share of the tax cut should
exceed their share of taxes paid. Nevertheless that's exactly what they get under the Bush tax cut. And that's to say nothing about the bad timing of the tax cut, which is completely unrelated to questions of income distribution.
-- Thomas
CI - Excellent, reasonably expressed comments! I don't agree with everything you wrote, but I respect the thought you've given the issue and the balanced way you expressed your point of view.
Scrat, Is this another miracle of sorts? LOL c.i.
CI - No, I think it's bound to happen when two people are being reasonable. I have a saying (yes, it's actually my own... no, it's not very good) that goes like this:
Quote:If one man can learn nothing from another, one of them is a fool.
(I told you it wasn't very good.) 
In Oz, we just got awarded a $4.00 tax cut.
Don't spend it all at once, Wilso -- our top wage earner here at work gets $26.00 U.S., his withholding was reduced by exactly one dollar per two-week pay period. No one else has been effected at all (this refers to the 2001 "Give my rich, contributing buddies a freelunch" tax cut).
Setanta - You do understand that not having a change in your withholding does not mean your tax liability has not changed, right? (I suspect you do know that, so why pretend it means something it does not?)
