New Tax Breaks for the Rich Here in the USA

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Take a gander at this:

http://www.msnbc.com/news/917639.asp?pne=11947&0ct=-300

This is a fine example of how the Republican party is the best welfare friend the rich have. Note the part about accountants recommending to their clients to purchase one, compliments of the American taxpayer.

 

http://news.bbc.co.uk/2/hi/business/2747153.stm

Achievments of the tax-cuts:

1. Zero impulse for the economy.

2. Bigger federal-deficits in the future (and the federal debt is huge).

3. Shameless redistributing of wealth -> The rich don't pay taxes, the average Americans pay taxes for the well-being of the rich.

-> A tax-cut is a subvention. Instead of taking money, money stays with the consumer. Stimulation of economy through subvention of the consumer. The average American is the consumer, not the rich American. The average American uses his money every day to buy the things he needs. He needs a tax-cut.

That's a well known fact out of economic science. As Henry Ford knew, you won't sell anything, if there's no consumer. The average worker, who gets laid of, stops consuming.

Giving people who have already money, more money (subventioned by the average American) doesn't stimulate consumption. Why would it ?

 

Yago

I would hate to say that I doubt your source, but if the shoe fits...

From the article

Well duh! Since only the "rich" pay any significant taxes, the only significant way to give tax cuts is to give it to the "rich". Of course if any one would actually look at the tax cuts, they would see that it is not only the rich who get the benefit.

Nice way of saying Stiglitz is a liberal. Stiglitz is only seen as an "expert" by Democrats. I read rumors that if he didn't step down from his last position he was going to be terminated for "undisclosed" reasons.

Another stupid statement. The tax cuts as planned over the next 10 years are less than 2% of the Federal budget. That is like someone who makes $40k a year spending an extra $800. Anyone remember the story of Chicken Little (THE SKY IS FALLING, THE SKY IS FALLING!).

Another stupid statement. That statement implies that all those rich people are just going to take that money and put in their "Scrooge McDuck" vault. What they don't spend they will invest, another boon to the economy. God this is too easy!

No one is making a big deal out of this, but this is all about behavior modification. No one wants to see another dot.gone bust, so you encourage people to invest in solid companies. Companies that pay dividends have positive cash flow from operations (99% of the time), something that WorldCom, Enron, Global Crossing and Tyco never had on their books. There is nothing sinister about this plan.

See the section above about how stupid it is to say that the rich don't "spend" excess money.

The best way to get money to the unemployed, unless you want to create more unemployed (something the Democrats would love right about now), is to GET THEM EMPLOYED! The best way to do that is to get industry working, and that is accomplished by A. people spending and B. investment in industry.

How the hell does giving tax dollars appropriated from the people at the Federal level to the States encourage economic growth? The States increased spending during the good times, and now they don't want to tighten their belts up during the bad times. What state has the highest economic growth in the US at the moment (and the least budgetary problems)? Florida, where they have been significantly cutting taxes! Ok Dems, how do you explain that one?

Sorry Yago, but your source of info is a Democrat with an agenda, and his arguments are not logically or economically sound. This is back to the theory that the Democrats want the economy in the tank, because they will do anything to get back in power! And yes, the Republicans would probably do the same thing if the roles were reversed.

 

Darkwolf -- And how would that be different from a conservative with an agenda? The economy is already in the tank for a large number of Americans, so your attack on the Dems doesn't make a lot of sense.

You also make assumptions that the rich will invest their tax cut and that will put people back to work. That is a difficult assumption to prove in the real world (I guess an SUV can be considered an investment). That is classic trickle down theory: Make the rich richer and somehow it will benefit the vast majority of Americans. It did not work for Reagan and it won't work for Shrub either. But then it's really not intended to do anything for the average American in the first place. So what's the point?

[ May 25, 2003, 22:22: Message edited by: Chandos the Red ]

 

Here is a neat link you should look at before making comments like that:

http://www.taxfoundation.org/prtopincometable.html

Also, just my opinion, but in a lot of ways I'd be more interested in what a bona fide genius like, oh say, Warren Buffett had to say than lots of other people since someone of Buffett's magnitude can not be dismissed as a mere liberal. Heh look, Warren Buffett speaks out:

http://www.washingtonpost.com/ac2/wp-dyn/A13113-2003May19?language=printer

 

Laches -- Thanks for all the neat links. It is an interesting point that there need not be any redistribution of wealth towards the direction of the rich, since they already have two-thirds of the nation's wealth anyway.

According to the "trickle downers," if we gave the rich the remaining one-thrid, we would all be better off. Don't cha know?

 

Clearly the tax break isn't a case of redistributing the wealth. If anything, it is a case of reducing the amount of redistribution going on.

 

I find it awfully suspicious that the president who has recieved the largest financial donations of all time (in a bad economy no less...and by a lot) passes huge tax breaks. I would be willing to bet those tax breaks will benefit those donors.

But I will ruin my credibility and frankly admit I can't stand his redneck, truck driving, fake accent, moronic speech pattern, poor enunciating, nervous, browbeating ass. George Bush Jr. sucks. I really don't like that guy.

 

It'll support those donating to his opponents in the exact same way. After all, it ain't like Ted Turner and Warren Buffett get their meals in a soup line.

For good current and more common examples of this, check out some articles about the fund raising of John Edwards recently.

 

Laches -- I will be glad to compare who gets the most funding and from whom: Shrub or Edwards.

 

Just what does "rich" mean anymore? According to the opponents of the tax cut, Velcro and I are rich. But if you ask our local township supervisors, we're undesirably poor since we can't afford to buy the only kind of new housing they're allowing in this area - $600K+ for a huge house on a huge lot.

I found this assessment of the tax cut package rather interesting. It's from The Motley Fool
.

 

I don't pretend to know as much about economics as you folks, but I think George W. could find out a way to heal cancer and the Dems and their allies would find fault with it. In all fairness, that's their job, but I figure we should watch and see what happens -- I highly doubt it will be all doom and gloom.

 

Rallymama -- That really is an excellent question, because most people will have a different description of the "rich." In most of my rants this includes only the very rarefied top, where the real action is. This includes the real power mongers: CEOs and other top execs of large corportions (the kind that receive 25 million just to go away), inherited wealth, such as the DuPonts, Rothchilds, etc.

I remember how Ken Lay of Enron was running around Houston with all the city politcians, hyping the baseball stadium that later became Enron field (and is now Minutemaid Park, really!). That is the kind of muscle I usually rant about.

The city made concessions to get Ken Lay's baseball field built, along with 2 other stadiums, that caused new taxes, bonds and land give-aways to the power mongers in Houston. After the stadium went through, the city talked of laying off firefighters, police, closing parks, libraries, etc. There was plenty of cash for Ken and his pet project, but not so much for the citizens of the city.

Guess who else did the same thing? Would that be George W. Bush, former owner of the Rangers baseball team. His old team was not worth much until he and his partners convinced the people of Dallas to build his team a new stadium. Once done, he of course sold the team for mcuh more than they were worth before-hand.

This is of course the worst kind of welfare for the rich, and much worse than the link I posted on SUVs. Free SUVs now look puny compared to some of the other things they get away with.

[ May 26, 2003, 22:12: Message edited by: Chandos the Red ]

 

Chandos, your definition of 'rich' changed in this thread then I think. Earlier you said the rich had 2/3 of the wealth in this nation but to come up with that number you'd have to consider anyone making over 90,000 per year 'rich.' Big difference between them and Warren Buffett or Ted Turner or Jane Fonda or Oprah or....

Which is what Rally was getting at I guess. The rhetoric of tax breaks is interesting.

 

Hm, that does not convince me fully. How do you know, that they don't spend it on a trip in Europe or East-Asia. Maybe they put it into a bank-account in some US bank, which has at the moment a policy to restrict credits to small firms and private persons ? Or, thinking about the low-Dollar, they invest in foreing shares ?

That's true. But wouldn't have "wise" budget-politics demanded, to not spend all the money in the 7 "good" years and build up some "backing" (lacking vocubalary) for the 7 "bad" years. Well, damage done in the past. If those states are now tightening their belts, that means they cut down spening, which cuts down consumption, which cuts down sales, which cuts down the economy. Yes, they should have been wiser in the past, now they're going to bleed for it.

Florida: Can't answer that, because I have no knowledge about specific US domestic-situations. Wild-guess: They live from senior-citicens from the east coast and don't suffer from "dot-coms" closing down ? Just a wild guess.

I still have a problem with that. That implies, that the only federal tax-funding is coming through taxing income. I have no idea of US-domestics, but I guess they have federal "custom-duties" (sp?) on imported goods and some taxes on goods, which are sold. Surely they have "sin" taxes on alcohol and tobacoo.

Ok, might be my lacking English vocubalary, but "thorn in one's side" means something like:" Something which angers/hurts/enerves (Vocu.. ?) one". So, I find it a very elegant way to say that.

Ok, can't dispute that, because I have to first find some data on the budget-deficit. About the sky is falling, I don't know, maybe he is ? Because Germany (and a lot of others, incl. my country) has now the problem, that someone came in at the beginning of the 80's, hm, the sky is falling..... 20 years later. They start to discuss reforms. But I know, that when I was at school, the US foreign debt was a nearly unimaginable high number.

At Rallymama: Mam, if you and your husband are making about 600'000 bucks the year, I would consider you "well-off", if you're making about (uh, difficult in another currency) more than 1'500'000 bucks a year, I would consider you "rich".

38.6 - 35 = 3.6 % in the top tax bracket. I'd love to see a graphic-statistic how this changes the paid amount on the different incomes.

Edit: I asked google about the federal budget deficit:

http://www.freerepublic.com/focus/news/857184/posts

[ May 26, 2003, 12:46: Message edited by: Yago ]

 

This text was posted a while ago by Vargx,

 

@Yago:

Trust me, my friend, we're NOT making that kind of money; nowhere near it! To buy that kind of housing, you need $150,000 in ready cash for downpayment and closing costs, and THEN you have to be able to afford the mortgage payments on your monthly income - along with everything else, like utilities and groceries and day care and a little fun and... (there are plenty of mortgage payment calculators out there on the 'Net but I can't go find one right now due to parenting) Even with the current low rates, that's not in our budget.

 

I consider myself a conservative, but I think this "tax cut" is just a waste of time. If it was actually cutting something, instead of just borrowing all the money to pay for it, I'd support it. As long as Washington refuses to cut spending we're always going to have big deficits and big debt. And I doubt that'll ever happen...both parties are committed to bankrupting the United States, the only real difference is how they do it.

 

Laches,

Thank you for that link, I lost it a while back and haven't had time to go find it.

For those of you who think that the "poor" pay all the taxes, and that the rich skate (from the link Laches provided above:

• Top 1% paid 37.42% of total Federal Income Taxes collected
  Top 5% paid 56.47%: The top 5% of wage earners pay over half of the taxes in this nation!
  Top 10% paid 67.33%
  Top 25% paid 84.01%: Those people making more than $55k per year pay almost all the taxes
  Top 50% paid 96.09%: Top 50% cuts off at $28k.

So those making less that $28K per year pay less than 4% of the US Fed Income taxes.

I can tell you from experience, that if they have kids, they are getting back more than they ever paid in. And with Bush's "only for the rich" tax cuts they will be getting back even more.

HMMM, how does that benefit the rich?

For the good of society, I have no problem with the rich paying more taxes, but I don't believe that anyone should get back more than they pay in.

@ Yago: (Sorry Laches!)

Some will spend it overseas, but to think that the majority of it, or even a large percentage will leave the US is a bit naive. As far as US back restricting credit to small firms and private persons, I have no idea what you are talking about. I left the banking industry 3 years ago, and still have family who are executives in community banks, and I can tell you that they will loan money to anyone who is qualified, without restrictions other than ability to repay, and in some cases that is not an issue. There are programs like SBA Loans, Women and Minorities business loans, and CRA act low-income loans, that waive many of the qualifications. Low $ is a 2 edged sword, it makes speculating on exchange rates look attractive, but it helps US companies to sell more exports, while hurting foreign companies, so I don't see that as an incentive to foreign investment.

So increasing Federal taxes and providing it to the States increases consumption? You are taking money away from people, money that will be spent or invested, and giving it to the individual states so that they can spend it? The only way that could be a benefit is if the states spent it more wisely than the people. Unless you have fallen for the Democratic mantra that "only government can properly spend your money", this is a false premise. Economists (and I am talking about economists who get paid to be right and fired if they are wrong, not your worthless "University" and "Nobel Prize" winning theorists who couldn't last 3 months in the business world) have known for a long time that privately spent money has a far greater effect on the economy than government expenditures. And yes the governments in this nation should have been saving for a "rainy day", but government by its nature can't do that, all the more reason to limit government to its most minimal functions.

In answer to the Florida question, it is growing economically. There are new businesses moving there every day, because the tax codes make it attractive

I have to address the statement you made to Rallymama. If a person makes more that $366,000 per year in the US, they are in the top 1% of wage earners. The income you are talking about is almost exclusively in the range of small corporations. There are an extremely small number of CEO's who make over a million a year, and don't fool yourself by believing that you would even personally know anyone who makes a 7 figure salary, most Americans don't.

And last I love this statement:

In absolute dollars you are correct, but then in absolute dollars, the average poor person is making $15k a year more than they did in 1980. Of course absolute $'s doesn't mean anything. If you look at the deficit as a percentage of GDP, it is far from a record, but the Democrats can't make a statement that will shock all the sheeple if they admit that!

[ May 27, 2003, 14:24: Message edited by: Darkwolf ]

 

@Darkwolf:

That @ was @Yago I think and not @me @ all : )