Afluent will profit most from Obama "middle class" tax cuts! (Gray)

 

Obama tax cut distribution tablehttp://delong.typepad.com/sdj/2010/09/a-greco-asiatic-horse.html

Hmm. Color me unimpressed. Does anybody think this continuation of failed Bush tax policy will be a winner among the majority of Dem voters? Isn't it true that less than 2% earn more than 200,000 a year? Doesn't make much sense giving those upper two such a big tax relief. Giving more to the lower incomes would be better for improving demand!

Is this Accurate?
I have not looked at the tax law, but any dollars over $100k or $200k seems to put you out of the middle class and, therefore, not eligible. Certainly if you earn a million in a year, you're not middle class. Anyone know if there are any income limits to these particular cuts?

Then again, with the top 400 taxpayers earning $344 million in 2008 and paying only 16.7% federal tax, perhaps middle class has been defined upward.

Well, I haven't looked into the details, either, but...
...isn't this progressive (not in the political meaning, of course) taxation? So, there can be a limit at 200k$ (or is 250k?) beyond which no additional tax credits are gained. Someone making 400k$ will get the credits for his first 200k, but nothing for the additional 200k. And afaics this shows in the graphic, too. That's why those with more than 500k and more than a million don't get more than those with, say, 350K.

That this is a strange way to support the middle class goes without saying. It would be easy to cme up with another tax relief that would benefit the lower 75% of incomes while giving nothing t those earning more than this. That would help the domestic demand much more and would also be a good way to fight the grwoing inequality.

Oh, and then, the lower tax rate for capital income would have to be adjusted upward, too. Simply doesn't make sense that a rich heir, living a lazy life in luxury from his millions at the bank, should pay a lower precentage of taxes than a hard working average Joe!

[ Parent ]
Payroll Taxes
One of the better ideas is to remove payroll taxes for incomes less than $20,000 (although I think up to $40k makes sense, too) and increase them for incomes over $250k/year, as a way to make hiring people more attractive to businesses and constrain companies handing out excessively high incomes. And remove the top limit on income for paying into Social Security, to help fund that program.

And you're absolutely right, Gray, about capital gains. It's a scam as it is set up now, allowing trust fund babies and Wall Street sharks to game the system to maximize their income and their share of the national income. In a perfect world, capital gains would be related to your wage income. If you made less than $250k, for example, you might only pay 5% on capital gains as a way to encourage people to save and invest not only in a 401k but also in real time. But if you're income was more than 50% investment returns (aka trust fund baby), then you'd be taxed at wage rates like everyone else. And capital gains for people earning above $250k would be lower than wage taxes but not by much, maybe 5-10% below the wage rate.

In any event, our tax system is highly messed up. It needs to be fixed in a way that encourages employers to hire, encourages the 99% of us who will never be wealthy to save, and encourage the ultra rich to stop being deadbeats and help fund the economy that made their wealth possible.

[ Parent ]
Indeed, indeed! Don't tax the poor.
Really, why should a Dem president and a Dem Congress put income taxes on those earning less than the poverty line (about 22,000 for a family of four)? That doesn't sound progressive to me. And I totally agree with you, that's a tax reform that Obama should have proposed. That would have been real change that people can believe in!

Just imagine what a great speech he could have given on the topic: "Global competition has in the recent years put the wages of our low income and middle class people under pressure. As president of the US, I'm aware of the hardship this puts on the families, and I will do my very best to ensure that at least those at the lower end of the income scale can use every single buck they earn for their livelihood. This will help them, and this will also help our economy, by increasing demand and expanding the market for our businesses. It's also an ethical question, we simply shouldn't tax our poor. They already contribute to society with their hard work, which isn't rewarded enough. But the US, as a rich nation, in comparison with the rest of the world, can afford doing the right thing! So, I will work with Congress to create a bill that excempts all income below the poverty line from taxation. And I won't rest until this Ethical Tax Act will be passed."

Another oportunity to make a real difference wasted. Instead, it's more of the same Bush policies. Sigh...

[ Parent ]
Excellent idea, and I propose a friendly amendment...
In the interest of jump-starting the stalled economy, I'd amend your proposal thusly:

1. Eliminate for 6 months all payroll deductions for individuals earning < 150,000/yr and couples earning < 250,000/yr.

2. Send a lump sum check to all unemployed Americans equal to their payroll deductions for the last 6 months they were employed.

3. Pay for the lost revenue with a one-time surcharge using graduated rates for all persons earning > 150,000/yr and all couples earning > 250,000/yr. Adjust as needed to restore FICA contributions for persons in #1.

When the rich squeal, send them a copy of the following:



"No, his mind is not for rent to any god or government" - Neil Peart

[ Parent ]
individuals vs. households
but any dollars over $100k or $200k seems to put you out of the middle class and, therefore, not eligible.

For this sake, middle class is any individual making less than $100,000, but families its $250,000 and it depends on where you live. Making $100,000 in New York City, for example, makes you upper middle class In Kentucky, you'd be uber wealthy.

To answer Gray's question

Does anybody think this continuation of failed Bush tax policy will be a winner among the majority of Dem voters?

I'm pretty sure no one gives a shit about tax cuts, except they don't want their taxes to go up, so I do think letting them completely expire (which I think is the best policy btw), is a political LOSER among Dem voters.

[ Parent ]
Ok, that's a point. As long as taxes don't go up...
...most voters won't care. Still, I can't help it, for me that's still another wasted opportunity to deliver something better, something that is labelled "change" and not "Bush".
[ Parent ]
However, a "don't care" bill won't help in the election!
I'm sure you will agree that simply extending that Bush tax cut won't inspire any voter, either. With a reform of his own, Obama could have created a talking point, evidence that the Dems have tax ideas of their own which will improve the situation of the majority! And right now, Dems desperately need every positive talking point they can find. So, I have to ask once again, isn't extending the Bush cuts a foolish waste of an opportunity?
[ Parent ]
it's what he campaigned on
for better or worse, and was extensively discussed in both primaries and general election. Think of that idiot Charlie Gibson.

New Jersey politics at Blue Jersey.
as Gray said above
We'd be far better off starting from scratch with something designed to benefit lower incomes. I just meant it's not a big surprise, not trying to be trollish.  

New Jersey politics at Blue Jersey.
[ Parent ]
But, you're right, too much stuff escaped attention...
...during the campaigns. Obama really ran on extending Bush's "middle class" tax cuts instead of coming up with a reform of his own? Damn. How "progressive"...
[ Parent ]
I thought debt was a huge issue ;)
I mean, isn't that why we can't have a real health care programme, why they 'have' to cut social security, etc. etc. etc.?  So why are we still talking about tax cuts, particularly and of it for the wealthy?

See here:
http://mrzine.monthlyreview.or...

Hey doc, long time no see! But if you fell for rethuglican propaganda...
..in the meantime, you at least swallow it whole! See, tax cuts are never a problem, because they finance themselves! It's the Larry Faffer theory (or whatever) that rethuglicans bring up in all those discussions. Even a tax reduction to a cool 0% would still result in miraculously washing enough money into the treasuries coffins to pay for a skeleton government (and all of the defense funding, of course). Reducing the debt and cutting taxes at the same time are simply the ying and yang of nowadays conservatism. Looks like you need much more brainwashing if you still haven't mastered the art of duality in right wing arguing!
:D
[ Parent ]




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