View Full Version : You want Bush tax cuts? Give us unemployment extensions!
Looks like the new deal Obama is pushing for a full extension of the Bush tax cuts involves also extending unemployment benefits. According to the article, it will push the cutoff for unemployment past 99 weeks.
http://www.foxnews.com/politics/2010/12/06/obama-push-unemployment-benefits-condition-extending-tax-rates/
I guess Congress hasn't gotten the message. We're tired of wheeling and dealing that increases spending.
From the AP:
http://www.google.com/hostednews/ap/article/ALeqM5hoBNvH3WOOokiTAUZxoFX-z3nVZQ?docId=d00a795a3fc6496399f10b3acf90e8c7
Gutshot John
12-06-10, 08:48
So you'd rather have a massive tax increase that will increase unemployment?
Interesting perspective.
All American politics is about compromise and has been so since 1776.
Is it ideal? No, but the standard is not perfection, the standard is the alternative.
variablebinary
12-06-10, 09:02
I'm not for either
The Congressional Budget Office said the cuts would result in deficits back in 2003 and they were right.
Bush's tax cuts failed at stimulating the economy the way it was supposed to.
They shouldn't be extended unless we are can get at least a 5% cut in federal spending across the board, no sacred cows.
Pandering to the rich and poor is ruining this country..
Flat tax, no exemptions, cut spending, shrink the size of the federal government by 20% over 10 years, throw out all the illegals, cut off any nation with a trade deficit greater than 30%, add a corporate tax of 40% to any job relocated out of the country, abolish obamacare.
I am not for extending the unemployment benefits. BUT, the current administration is driving the economy further in to the ground, rather than fostering a rebound. If it were any other non-commie administration, I would not think we should extend unemployment. But as things sit, I believe our economic woes will continue to worsen until at least 1 year after the Usurper is out of office.
As far as the tax cuts, the "rich" already pay the vast majority of the tax burden. Penalizing them further simply results in less re-investment and fewer jobs.
So you'd rather have a massive tax increase that will increase unemployment?
Interesting perspective.
I wasn't aware there were but two possibilities in the world. Here I thought this was just the deal currently on the table, instead of all the options ever to be available.
As far as the Bush Tax Cuts go, the White House has been giving up ground to the GOP for months now. Their position is shifting to a more favorable one. Why do we have to cave in now with added spending when it seems fairly clear they should be willing to give up everything we want if we are just patient? From my understanding, we have at least another couple months to renew the cuts with no real impact on things.
Democrats know their constituency will not be pleased, at all, if their tax credits disappear AND their unemployment goes away.=
Belmont31R
12-06-10, 09:39
So you'd rather have a massive tax increase that will increase unemployment?
Interesting perspective.
All American politics is about compromise and has been so since 1776.
Is it ideal? No, but the standard is not perfection, the standard is the alternative.
In 1776 I don't think they were compromising about nearly 40% taxes and paying people to sit at home. They were out shooting ****ers in the face for taxing them to begin with.
I'm not for either
The Congressional Budget Office said the cuts would result in deficits back in 2003 and they were right.
Bush's tax cuts failed at stimulating the economy the way it was supposed to.
They shouldn't be extended unless we are can get at least a 5% cut in federal spending across the board, no sacred cows.
Pandering to the rich and poor is ruining this country..
Flat tax, no exemptions, cut spending, shrink the size of the federal government by 20% over 10 years, throw out all the illegals, cut off any nation with a trade deficit greater than 30%, add a corporate tax of 40% to any job relocated out of the country, abolish obamacare.
Tax cuts don't cause deficits. Spending more than you make does. Your 5% spending cut should be first. Congress isn't suddenly going to exercise fiscal restraint because the tax rates go up, they'll keep spending and we'll have less of OUR money. **** that.
In 1776 I don't think they were compromising about nearly 40% taxes and paying people to sit at home. They were out shooting ****ers in the face for taxing them to begin with.
Sig. Line. Material. :cool:
Gutshot John
12-06-10, 10:26
In 1776 I don't think they were compromising about nearly 40% taxes and paying people to sit at home. They were out shooting ****ers in the face for taxing them to begin with.
I referred to 1776 specifically in how the DoI was adopted by the compromise between Northern States and Southern States. In 1787 the Constitution was also adopted as a result of the so-called "Great Compromise" between large and small states and explicitly over the taxation.
In fact one of the main reasons the Constitution supplanted the Articles of Confederation was explicitly over taxation and the lack of the Federal governments power to generate revenue to support its functioning which in turn made it vulnerable to both internal and external threats after the Shays's Rebellion. The Whiskey Rebellion reaffirmed the principle.
Gutshot John
12-06-10, 10:26
I wasn't aware there were but two possibilities in the world. Here I thought this was just the deal currently on the table, instead of all the options ever to be available.
To get what the big thing you want, you have to give a little thing that they want.
That's how compromises work and "we" got the better end of that deal. Unemployment benefits will go away eventually, a tax increase would have devastated the economy.
GermanSynergy
12-06-10, 10:43
Republicans need to play hard ball, and remind the Communists I mean Democrats :D that they control the purse strings next month, and haver the power to defund any number of their pet projects if they don't comply.
Tax cuts don't cause deficits. Spending more than you make does. Your 5% spending cut should be first. Congress isn't suddenly going to exercise fiscal restraint because the tax rates go up, they'll keep spending and we'll have less of OUR money. **** that.
And this has been shown to actually happen. Every time that taxes are raised to close the deficit, they end up spending more than $1 for every new $1 raised.
PrivateCitizen
12-06-10, 10:48
To get what the big thing you want, you have to give a little thing that they want.
That's how compromises work and "we" got the better end of that deal. Unemployment benefits will go away eventually, a tax increase would have devastated the economy.
I appreciate the sentiment and if it were 'honest politics' … it might even be plausible.
But a steady stream of bad compromises is why we are where we are. It has to stop sometime, the dole-children have to be told 'no' and, the country needs a hard dose of tough-love.
The compromises are done. 'You f-ed up, you're done," is the message. Nothing less.
Gutshot John
12-06-10, 11:05
I appreciate the sentiment and if it were 'honest politics' … it might even be plausible.
But a steady stream of bad compromises is why we are where we are. It has to stop sometime, the dole-children have to be told 'no' and, the country needs a hard dose of tough-love.
The compromises are done. 'You f-ed up, you're done," is the message. Nothing less.
What's dishonest about it? No one has made a backroom deal. No person is getting paid off. The prime beneficiaries are the middle class and the compromise is open to public scrutiny.
The "tough love" approach is a nice idea but if it comes at the expense of a huge tax increase than it's a recipe for economic disaster.
Gutshot John
12-06-10, 11:07
Republicans need to play hard ball, and remind the Communists I mean Democrats :D that they control the purse strings next month, and haver the power to defund any number of their pet projects if they don't comply.
Next month isn't right now. this would mean a huge tax increase that will never get passed again (the Democrats too can play hard ball and thwart any attempt to reinstate them).
Democrats are the idiots that waste $3 in gas driving to the gas station that has it 3 cents cheaper per gallon and then get 10 gallons and say LOOK I SAVED 30 CENTS !!!!!
Here is what one Vietnam-era vet, now retired said today:
"Get a fricken job or die."
Although perhaps harsh, I think the feeling behind that message is the same feeling that tens of millions of Americans have regarding our vastly-expanded welfare state with free section 8 housing, free health insurance, food stamps (card), H.E.A.T. assistance, AFDC, free school lunch, free school breakfast, free school, all heaped upon the laziest of lazy, who also sell drugs, do drive by shootings, etc., etc.
We (collectively) reward those who misbehave and penalize those who produce.
In 1776 I don't think they were compromising about nearly 40% taxes and paying people to sit at home. They were out shooting ****ers in the face for taxing them to begin with.
I like the way you worded that. :D
It's too bad we can't do that today. All of our problems would be solved. Order would be restored with a quickness.
FromMyColdDeadHand
12-06-10, 12:41
People forget that we were really close to having a balanced budget again. If 2008 hadn't imploded, it would have been almost even. All the projections overestimated the deficit.
The key is economic growth. The tax RATE and spending will all fall in line if you build your economy to grow thru innovation and investment.
I do get sick of hearing how the government is giving us 'rich' people money. It's my money bitches, unless you say that the govt has first claim on my income.
I want a head tax. Take the budget, divide by the number of adults and VIOLA, your tax bill.
Gutshot John
12-06-10, 13:01
1. Not everyone who has lost their job has misbehaved. Some, if not most, did everything properly. Moreover they paid their unemployment insurance premiums. Unemployment isn't the dole. Do I think that at some point you are making the problem worse? Probably but I don't think anyone commenting here is on unemployment anyway so it's very easy to be sanguin about it.
2. If the tax cuts had not been extended what would have been the political consequences come April 15th? I know I would have been pissed.
I don't collect uninsurance but I do pay taxes and I would have certainly blamed the GOP if they had stopped a middle class tax cut in favor of millionaires.
Almost 2 years on unemployment is insane.
I know quite a few people that really are trying to get a job, but don't have marketable skills in the area. But I know a lot more people (mostly younger) that are outright not even looking for a job because they have unemployment still.
End the unemployment, and watch how many jobs are gained. Don't like working at Taco Bell? Tough shit, you have to pay your own bills now. It's amazing what you're willing to do to survive. But then again, if you're unwilling to work, you don't deserve to survive.
Belmont31R
12-06-10, 15:11
The issue with that is people are going to most likely take a cut to go work at McDonalds, and companies are doing all kinds of things now like not hiring anyone who doesn't already have a job. So you end your unemployment checks, take a hit on your monthly income, and then hope someone will hire you back into an acceptable salary before the McDonalds pay doesn't quite pan out anymore...
Im glad Im not having to try and find a job right now....hopefully by the time I finish school things will be a bit better. At least my wife will have a steady job...nursing...they are hiring 90%+ of the grads through the program she is going through before they even complete their last semesters, and paying top dollar for them too.
montanadave
12-06-10, 16:13
"Get a fricken job or die."
"At this festive season of the year, Mr. Scrooge," said the gentleman, taking up a pen, "it is more than usually desirable that we should make some slight provision for the Poor and Destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir."
"Are there no prisons?" asked Scrooge.
"Plenty of prisons," said the gentleman, laying down the pen again.
"And the Union workhouses?" demanded Scrooge. "Are they still in operation?"
"They are. Still," returned the gentleman, "I wish I could say they were not."
"The Treadmill and the Poor Law are in full vigour, then?" said Scrooge.
"Both very busy, sir."
"Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course," said Scrooge. "I'm very glad to hear it."
"Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude," returned the gentleman, "a few of us are endeavouring to raise a fund to buy the Poor some meat and drink and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?"
"Nothing!" Scrooge replied.
"You wish to be anonymous?"
"I wish to be left alone," said Scrooge. "Since you ask me what I wish, gentlemen, that is my answer. I don't make merry myself at Christmas and I can't afford to make idle people merry. I help to support the establishments I have mentioned -- they cost enough; and those who are badly off must go there."
"Many can't go there; and many would rather die."
"If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population. Besides -- excuse me -- I don't know that."
"But you might know it," observed the gentleman.
"It's not my business," Scrooge returned. "It's enough for a man to understand his own business, and not to interfere with other people's. Mine occupies me constantly. Good afternoon, gentlemen!" [excerpted from A Christmas Carol by Charles Dickens]
Merry Christmas and may the spirit of the season burn brightly in the hearts of one and all.
And so, as Tiny Tim observed, God Bless Us, Every One! [ibid.]
The Congressional Budget Office said the cuts would result in deficits back in 2003 and they were right.
Key metric in their calculations was that if the current spending was not curtailed, or if spending in Iraq and Afghanistan was maintained, or enhanced, we would get bigger and bigger deficits.
Well, not only did we not curtail spending on Iraq and Afghanistan, but we added in auto bailouts and TARP II, plus Obamacare.
So yeah, tax cuts will lead to deficits when you outpace tax revenue by an exponential factor.
FromMyColdDeadHand
12-06-10, 16:24
.
I don't collect uninsurance but I do pay taxes and I would have certainly blamed the GOP if they had stopped a middle class tax cut in favor of millionaires.
Welcome to the world where 51% will tax the BEJESUS out of the 49% percent. I'm actually amazed that extending all the taxes is as popular as it is. Maybe all those small businesses are telling people that if the companies taxes are raised there will be consequences.
What I don't get is that it was pretty obvious and that the economy had taken a fundamental hit and a lot of jobs weren't going to come back. Why wasn't there more emphasis placed on retraining people? There were a lot of whitecollar jobs that aren't going to come back. Two years is enough to get a masters, or the meat of a Bachelors degree.
Belmont31R
12-06-10, 16:57
Key metric in their calculations was that if the current spending was not curtailed, or if spending in Iraq and Afghanistan was maintained, or enhanced, we would get bigger and bigger deficits.
Well, not only did we not curtail spending on Iraq and Afghanistan, but we added in auto bailouts and TARP II, plus Obamacare.
So yeah, tax cuts will lead to deficits when you outpace tax revenue by an exponential factor.
Tax revenue actually went UP after the tax cuts....but so did spending, and at a faster pace than the revenues were going up. Bush never met a spending program he didn't like.
Historical Federal Spending: http://blog.foreignpolicy.com/files/images/Spending%20chart2.gif
Federal Tax Revenue: http://www.truthfulpolitics.com/images/federal_government_revenue.jpg
Tax cuts don't cause deficits. Spending more than you make does.
Exactly. It's not the governments money, it's the peoples money who earned it to keep, spend, invest, hoard, or whatever else they wanna do with it.
Cut off welfare, food stamps, WIC, housing etc. if you been on it longer than 3 years and keep unemployment benefits. I had a friend who was unemployed for almost 2 years but did what he had to do to get by. You'd be surprised the odd jobs you can find on Craigslist.
People forget that we were really close to having a balanced budget again. If 2008 hadn't imploded, it would have been almost even. All the projections overestimated the deficit.
The key is economic growth. The tax RATE and spending will all fall in line if you build your economy to grow thru innovation and investment.
I do get sick of hearing how the government is giving us 'rich' people money. It's my money, bitches, unless you say that the govt has first claim on my income.
I want a head tax. Take the budget, divide by the number of adults and VIOLA, your tax bill.
Yep, just as it was initially intended by the Founders.
I have no issues extending unemployment benefits. They are my fellow Americans but I get the red ass at the unrestrained spending. Cut the spending 5% per year for the next 5 years would just about do it. Well, I'm guessing. I'd say the Fed is WAAAAY out of bounds but so few Americans have a clue...
Belmont31R
12-06-10, 19:50
Claire McCaskill disagrees: http://www.youtube.com/watch?v=HdcDjQz01z4
More money in your pocket means they are paying you.
Who the **** is this bitch to talk about the deficit? I don't think anyone is serious about ending the deficit or paying down the debt...but she is right about at the bottom of that list. Votes to spend a few trillion in 2 years we don't have, and she blames the R's for not being serious about the deficit?
And who ****ing cares if someone wants to go to Europe for the new years? Its THEIR money. Who is this bitch to grandstand about it? Like because someone can afford a trip we should take their money...oops I mean pay them less?
Tax revenue actually went UP after the tax cuts....but so did spending, and at a faster pace than the revenues were going up.
I understand, but the CBO's analysis came true because of the spending. Revenues, plus or minus, were merely an afterthought.
I don't collect uninsurance but I do pay taxes and I would have certainly blamed the GOP if they had stopped a middle class tax cut in favor of millionaires.
I don't comment much here, or anywhere else much for that matter. But I'll tell, ya...I'm ****in sick of this demonizing the rich.
I ain't rich. I ain't a millionaire, although for the first time this past year, I'm in the top tax bracket. Here's why it pisses me off.
10 years ago I started my first startup (software). I took shit for pay to get the experience. I gained 30 pounds from working to much and exercising too little. I took risks most ****ers wouldn't ever dream of. I was away from my wife for years, and almost gave up my marriage to my company. I got high blood pressure staying awake at night wondering how to make sure my guys all got paid (and paid they always got). But I didn't always get paid. But over that time, I've created probably 75-100 jobs that didn't exist before. Jobs that pay well, in a company that works hard to take care of its people. I ain't bill gates, but I've done a little here.
And yeah, it's finally paying off. I finally have a big salary and some stock that might be worth something some day. I didn't steal it. And all the whiny douche bags out there who want the benefits of those taxes while not taking the kind of insane risks and hardships that so many entrepreneurs go through should shut their kibble holes.
So do you think that a five percent change in my tax rate will provide more tax revenue than 75 white collar jobs? No, those jobs provide better long term sustainable tax base. I'll tell you what, the government should be offering a tax break for every job that every stupid ass like me helps create. But instead I get demonized by the very people who nonetheless want my taxes to fund their services, and the jobs i help build to go to them. **** that noise
Thanks for the rant space. :big_boss:
Suwannee Tim
12-07-10, 05:07
Many, perhaps most of these "rich" people are actually S corporations and other small businesses. Do you think this is a good time to raise taxes on small businesses? The death tax is another that often hits business owners. The principal dies and the business dies along with him, along with the jobs. Class Warriors call that "fair".
Many, perhaps most of these "rich" people are actually S corporations and other small businesses. Do you think this is a good time to raise taxes on small businesses?
I keep hearing this argument over and over an it just doesn't work for me, and I own my own small business. My net business income is taxed at individual tax rates on my 1040. I am not taxed on my business revenue, I am taxed on my business net profit. In order to have my business taxes raised over $1 million I have to net a million to start with. That is $1 million in net profit, not simply revenue. If I am netting over a million from my business, another 4% on the money I net over $1 million is laughable small. And it isn't going to stop me from hiring more employees if I can net more income off the expense of those employees.
The death tax is another that often hits business owners. The principal dies and the business dies along with him, along with the jobs. Class Warriors call that "fair".
This! As a small business I am much more concerned about the death tax which steals a massive percentage of my net worth when I die and net worth is made up of money that has already had income taxes paid on it. Double taxation sucks!
I am not in the $1million net class, but if I were I would surely take a small increase in taxes on my yearly net income over a massive death tax on my net worth.
I don't comment much here, or anywhere else much for that matter. But I'll tell, ya...I'm ****in sick of this demonizing the rich.
I ain't rich. I ain't a millionaire, although for the first time this past year, I'm in the top tax bracket. Here's why it pisses me off.
10 years ago I started my first startup (software). I took shit for pay to get the experience. I gained 30 pounds from working to much and exercising too little. I took risks most ****ers wouldn't ever dream of. I was away from my wife for years, and almost gave up my marriage to my company. I got high blood pressure staying awake at night wondering how to make sure my guys all got paid (and paid they always got). But I didn't always get paid. But over that time, I've created probably 75-100 jobs that didn't exist before. Jobs that pay well, in a company that works hard to take care of its people. I ain't bill gates, but I've done a little here.
And yeah, it's finally paying off. I finally have a big salary and some stock that might be worth something some day. I didn't steal it. And all the whiny douche bags out there who want the benefits of those taxes while not taking the kind of insane risks and hardships that so many entrepreneurs go through should shut their kibble holes.
So do you think that a five percent change in my tax rate will provide more tax revenue than 75 white collar jobs? No, those jobs provide better long term sustainable tax base. I'll tell you what, the government should be offering a tax break for every job that every stupid ass like me helps create. But instead I get demonized by the very people who nonetheless want my taxes to fund their services, and the jobs i help build to go to them. **** that noise
Thanks for the rant space. :big_boss:
This is my sentimate and situation exactly!! I'm in the same boat and so are the majority of people who would have been hit hard by the so-called tax cuts not being extended. The tax rate right now is the tax rate!! What would have occurred is a insane tax HIKE!! The poor/lowest tax bracket would have gone up 50%. That's from a tax rate of 10% to 15%. Sure a 5% increase doesn't sound like much but when you consider that it is a 50% increase from the bracket that is actually a huge increase. What they compromised on wasn't a tax cut. It also wouldn't add 700 Billion to the debt! The current tax rates are not going down. They are staying the same, thankfully. That means that there isn't $700 Billion being added to the debt like the Dems are saying. If the upper tax bracket were being lowered then yes it is possible that less monies would be coming into the Govt. coffers. However, tax cuts usually equal greater income coming into the Govt. 51% of the population doesn't pay taxes now as is!! So the only people whose taxes can be cut are those that pay them. The top 5% of income earners pay 70% of the taxes. Wait a minute, those are the filthy, dirty, selfish, non caring Rich!! Or all of those small businesses that make $250K or more a year and employ the majority of Americans.
This class warefare is bullshit!! Those that support it or come up with ideas to tax the so-called rich, whether they realize this or not, are just spewing communist/socialist ideals!! As far as unemployment compensation is concerned, tough love works. Most European countries have cut off unempoloyment compensation to thier population. They realized that they couldn't afford it. Guess what happened. A great number of those receiving that compensation is now working. I wonder what would happen here?
I keep hearing this argument over and over an it just doesn't work for me, and I own my own small business. My net business income is taxed at individual tax rates on my 1040. I am not taxed on my business revenue, I am taxed on my business net profit. In order to have my business taxes raised over $1 million I have to net a million to start with. That is $1 million in net profit, not simply revenue. If I am netting over a million from my business, another 4% on the money I net over $1 million is laughable small. And it isn't going to stop me from hiring more employees if I can net more income off the expense of those employees.
That 4% on a million is $40k. That is a reasonable salary. In addition, even though you get to write it off after the fact, your "profits" are what fund your expansion. You buy a new piece of equipment with your profit. You can write it off after the fact, either through section 179 or depreciate it over time, but you need the money up front to pay for it in the first place.
noops, watrdawg, I'm with you and the other guys on this. I code also and have provided jobs / income for many families because of it over the last 15 years. A tough start as noops says, but we are doing well now. Owebama got his butt kicked yesterday, glad of it.
With the unemployment comp, why not a depleting scale? Every so many weeks reduce by a percentage. The comfort zone would slowly evaporate and force recipients to find a job or go off to welfare. Honestly between the two programs now, it's a blur to me looking at the surface. I totally understand the hardship of not finding work, but if someone really, really wants to work, they can find it, or create it.
ForTehNguyen
12-07-10, 11:59
paying people not to work? Amazing
paying people not to work? Amazing
Remember now, Nancy Pelosi told us all the other day the Unemployment benefits create jobs!:rolleyes: So of course paying people not to work makes sense. Actually we all should quit working so that everyone will have a job!!
I don't comment much here, or anywhere else much for that matter. But I'll tell, ya...I'm ****in sick of this demonizing the rich.
I ain't rich. I ain't a millionaire, although for the first time this past year, I'm in the top tax bracket. Here's why it pisses me off.
Don't misunderstand GJ. AFAICT he is coming from the "common voter" angle in detailing pragmatic and realistic politics In other words, he is not saying "soak the rich". He is saying that from a practical political perspective, Republicans have more to lose than to gain by taking an all or nothing approach. If they have to compromise to get some of it passed that is better than not getting anything passed. Something like that.
That 4% on a million is $40k.
Wrong, at least based on my understanding of how it would have worked, which might be the wrong part.
It is a progressive tax system with 6 tiers currently. I won't take the time to transcribe them here but you can see them at
http://www.moneychimp.com/features/tax_brackets.htm. The top rate is currently 35% on net tabable income over $373,650.
My understanding is that 39% on incomes above $1 million was on the table. So you would still pay 35% from $373,650 up to $1 million and 39% on amounts over $1 million.
With that in mind, if I hire someone for $50 thousand and provide another $12.5 thousand in benefits (very generous at 25% of salary) so I can make $100 thousand in gross revenue on their expense (not at all unreasonable), I would net $37.5 after the new employees expense.
If I am already netting $1 million in taxable income, I would only be taxed an additional 4% points on the $37.5 thousand I netted off the new employee, or $1,500.
Please tell me what business person in their right mind would not be willing to pay an additional $1,500 in taxes so they could put another $25,875 after taxes (37,500 minus 39%) in their own pocket?
I don't hire people based on my personal tax rate, I hire people if I can make money from doing so, even after I pay my taxes, albeit at a higher rate. If I can't make money from hiring them it doesn't matter what tax bracket I am in, I won't hire them.
Wrong, at least based on my understanding of how it would have worked, which might be the wrong part.
It is a progressive tax system with 6 tiers currently. I won't take the time to transcribe them here but you can see them at
http://www.moneychimp.com/features/tax_brackets.htm. The top rate is currently 35% on net tabable income over $373,650.
My understanding is that 39% on incomes above $1 million was on the table. So you would still pay 35% from $373,650 up to $1 million and 39% on amounts over $1 million.
With that in mind, if I hire someone for $50 thousand and provide another $12.5 thousand in benefits (very generous at 25% of salary) so I can make $100 thousand in gross revenue on their expense (not at all unreasonable), I would net $37.5 after the new employees expense.
If I am already netting $1 million in taxable income, I would only be taxed an additional 4% points on the $37.5 thousand I netted off the new employee, or $1,500.
Please tell me what business person in their right mind would not be willing to pay an additional $1,500 in taxes so they could put another $25,875 after taxes (37,500 minus 39%) in their own pocket?
I don't hire people based on my personal tax rate, I hire people if I can make money from doing so, even after I pay my taxes, albeit at a higher rate. If I can't make money from hiring them it doesn't matter what tax bracket I am in, I won't hire them.
None. But that savvy business person would certainly prefer to keep the $1500 that their outlay and effort generated. It's not like you have to pay that extra 4% to be able to have that employee.
Republicans have more to lose than to gain by taking an all or nothing approach.
You're right of course. Realism sure is a bitch sometimes.
Belmont31R
12-07-10, 14:27
Austin-
The 1 million mark was one figure being tossed around but was not set in stone. The base number they were working with was 200 individual and 250 joint.
Keep in mind 4-5% might not affect one person all that much.....but its 4% out of the economy when we need growth not more money being taken out. Im sure you can also figure out its not just 4% from one person. Its a compounding effect because money changes hands numerous times in a year, you hinted at being able to spend X amount to get Y amount in return for spending X. So that 4% has a larger effect than just a simple 4%. Just like with the gov...theres a point where taxes get so high you actually get less money back. After the Bush tax cuts were put into effect revenues actually went up. Thats because if you allow our people to keep more of their money they turn around and make more with it. That means they have more money to be taxed even if the tax rate is lower. You can tax people 50%, and you'll get less tax revenues because you're taking away peoples ability to use that money to make more. Thus they have less money to be taxed.
However progressives like to play the class warfare game, and don't really care about getting the most tax revenues by keeping taxes lower. They'd rather pander to their base, the jealous types, welfare types, ect, and act like they are going after the greedy rich types for "equality" and "fairness". One reason why our GDP is so much higher than the rest of the world is because we are not like Europe for instance that puts high taxes on everyone with 8 dollar a gallon gas, 20% VAT tax on everything, and our middle class is taxed less on their income. High tax rates reduce people's ability to grow their taxable dollars, reduce consumer spending, ect.
The problem is our social spending is becoming like Europe, and we are going to have the high taxes to go along with it to pay for it. However if you look at Europe economic history they have been stagnant like we are now. When I was stationed in Germany a few years ago I kept hearing about the high unemployment rates even though the global economy was doing well at that time. You see a lot more people reliant on public transportation since they can't afford to drive a car. I supposedly was stationed next to one of the richest towns in Germany, and even there public transportation was huge. All the buses (many of them) were always filled. Bus stops always busy. High social spending and high taxes basically retard a nation into stagnation, and that is what we are facing here.
rickrock305
12-07-10, 16:23
some relevant info...
http://www.truthandpolitics.org/top-rates-graph.php
http://www.taxpolicycenter.org/taxfacts/Content/GIF/toprate_historical.gif
http://www.taxfoundation.org/files/fed_individual_rate_history-20100923.pdf
In 2004, the top 1 percent paid 39.6 percent of federal income taxes and made 19 percent of adjusted gross income (AGI). In 2007, that same top 1 percent paid 40.4 percent of federal income taxes and earned 22.8 percent of AGI. Another way to say that is: The top 1 percent’s share of AGI grew 20 percent, but at the same time the top 1 percent’s share of income taxes grew just 2.02 percent.
http://www.fiscalstrength.com/
Only 375,000 Americans have incomes of over $1,000,000
Between 1979 and 2007, incomes for the wealthiest 1% of Americans rose by 281%
During the Great Depression, millionaires had a top marginal tax rate of 68%
In 1963, millionaires had a top marginal tax rate of 91%
In 1976, millionaires had a top marginal tax rate of 70%
Today, millionaires have a top marginal tax rate of 35%
Reducing the income tax on top earners is one of the most inefficient ways to grow the economy according to the non-partisan Congressional Budget Office
44% of Congress people are millionaires
I suppose that depends on your definition of "relevant"...
The 1 million mark was one figure being tossed around but was not set in stone. The base number they were working with was 200 individual and 250 joint.
From the looks of things today nothing is set in stone.
Yes, 200, 250 and 1 million have all been kicked around. At 200 or 250, the current marginal tax rate is 33% (between 171,850 and 373,650), not 35%. So that puts the increase at 6 percentage points above instead of 4. It changes the math a little, but my basic premise is still valid - I will still get a decent return on investment on my new hire if they are profitable. And if they are not profitable I should not have hired them. The ROI in the example I posted earlier is around 32% even factoring in payroll taxes on top of the salary and benefits.
Before running my own business, I routinely returned 200% of my salary, benefits and payroll tax in revenue minus COGS to the owner of the business I worked for. And by routinely I mean over a 15 year period.
Hiring decisions should be based on perceived after tax return on investment and not the owner's marginal tax rate. That was the point I was trying to make. I am tired of hearing people say that business won't hire if the marginal tax rate goes up for the top tier. They will if they think they can make money on it!
I remain much more concerned about the return of the 55% estate tax than I am about a paltry 4 to 6 percentage point increase for top earners. The estate tax is based on net assets, not income. And for most people, unless they just got out of school, net assets far exceed their annual taxable income, and even more so for high earners.
But I do agree with most of what you posted. People in lower incomes will indeed have much less disposable income that would otherwise get spent if the tax cuts are extended.
RickRock:
Also some relevant info from Tax Foundation:
The top 5 percent earned 34.7 percent of the nation's adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.
Overall, these data on high-income tax returns appear to confirm that the recent recession had the same diminishing effect on income inequality that most recessions have, and that it occurred for the same reason, a sharp decline in income at the high end. This appears to contradict recent reports based upon Census data suggesting the opposite, that this recession had actually increased income inequality. This inconsistency between IRS data and Census data is explained by a number of factors such as: (1) Census doesn't break down data for the extremely high income tax returns (typically stops at the 5 percent threshold), (2) Census income measures do not account for capital gains realizations, and (3) Census data gathered from household surveys are less reliable for income information at the high end of the income spectrum than IRS data.
http://www.taxfoundation.org/news/show/250.html
So are you saying it's ok for higher earners to pay more of the tax burden while others have 3 years of unemployment?
It's like a Heisenberg problem. My heads going to explode.
The estate tax is based on net assets, not income. And for most people, unless they just got out of school, net assets far exceed their annual taxable income, and even more so for high earners.
Having just executed my mothers estate, I believe this is incorrect. It's not income, but it's also not net assets. It's gross estate assets net of deductions.
http://www.irs.gov/businesses/small/article/0,,id=108143,00.html
44% of Congress people are millionaires
I am not defending Congress, not by a long shot. But people need to understand that one can easily be a millionaire today (net worth exceeds $1million), multi-millionaire even, and not have ever had anywhere near $1million per year in taxable income. All you have to do is have a decent job, work hard for 30 or 40 years, live well within your means and save and invest the rest.
Marginal federal income tax rates are based on income.
Federal and state death (estate) taxes are base on net assets (worth).
Having just executed my mothers estate, I believe this is incorrect. It's not income, but it's also not net assets. It's gross estate assets net of deductions.
http://www.irs.gov/businesses/small/article/0,,id=108143,00.html
Yes, I over simplified it, but I didn't feel like teaching a tax law course on M4C.
Yes, I over simplified it, but I didn't feel like teaching a tax law course on M4C.
Well, I'm no tax accountant, but that sure did make one hell of a difference in my Mother's case. My mother was living on $14K a year with a Gross estate of about $1.8million. She was basically living at the poverty line and refused to make her life easier because that money was for her grandkids. In reality though, her NET estate was about $600K. Yeah, still a lot of money. But pre-Bush era cuts, that would have had a different results. In fact, if she'd died just 10 days (!) earlier, it would have been different.
Noops
From the looks of things today nothing is set in stone.
Yes, 200, 250 and 1 million have all been kicked around. At 200 or 250, the current marginal tax rate is 33% (between 171,850 and 373,650), not 35%. So that puts the increase at 6 percentage points above instead of 4. It changes the math a little, but my basic premise is still valid - I will still get a decent return on investment on my new hire if they are profitable. And if they are not profitable I should not have hired them. The ROI in the example I posted earlier is around 32% even factoring in payroll taxes on top of the salary and benefits.
Before running my own business, I routinely returned 200% of my salary, benefits and payroll tax in revenue minus COGS to the owner of the business I worked for. And by routinely I mean over a 15 year period.
Hiring decisions should be based on perceived after tax return on investment and not the owner's marginal tax rate. That was the point I was trying to make. I am tired of hearing people say that business won't hire if the marginal tax rate goes up for the top tier. They will if they think they can make money on it!
I remain much more concerned about the return of the 55% estate tax than I am about a paltry 4 to 6 percentage point increase for top earners. The estate tax is based on net assets, not income. And for most people, unless they just got out of school, net assets far exceed their annual taxable income, and even more so for high earners.
But I do agree with most of what you posted. People in lower incomes will indeed have much less disposable income that would otherwise get spent if the tax cuts are extended.
I don't disagree with you that if they can make money they will.
That said, they will always be able to make *more* money (or hire more workers or invest more in capital etc) the less they are taxed.
Well, I'm no tax accountant, but that sure did make one hell of a difference in my Mother's case. ..........Gross estate of about $1.8million. In reality though, her NET estate was about $600K.
Gross estate includes assets without considering debt. I always only look at net assets (assets minus debt) as that is what I will pass on to family, minus expenses of estate, of course.
Marital Deduction - doesn't apply to me.
Charitable Deduction - I want my estate to go to family so this doesn't apply either.
Mortgages and Debt - no debt so this doesnt apply to me.
Administration expenses of the estate & sosses during estate administration - should be minimal.
ForTehNguyen
12-07-10, 17:27
yall know whats funny? If you have student loans you dont have to pay them if you are unemployed. So there is massive incentive for a new grad to stay unemployed with some worthless ass degree and a mountain of student loan debt. Why on earth would you get a job, because you would lose that unemployment check and have to pay your loan bill. If you accepted a job, after taxes and student loans you probably have less money leftover at the end of the month versus what you would have gotten from unemployment
Just cant make this stuff up.
That said, they will always be able to make *more* money (or hire more workers or invest more in capital etc) the less they are taxed.
Only if it makes sense to do so; i.e., a decent return on investment. This means more than just the marginal tax rate. Without the ROI there is no incentive for me to hire anyone.
yall know whats funny? If you have student loans you dont have to pay them if you are unemployed. So there is massive incentive for a new grad to stay unemployed with some worthless ass degree and a mountain of student loan debt. Why on earth would you get a job, because you would lose that unemployment check and have to pay your loan bill. If you accepted a job, after taxes and student loans you probably have less money leftover at the end of the month versus what you would have gotten from unemployment
Just cant make this stuff up.
I didn't know that, but take your word for it. And, yes, given the above, I would not take a low paying job, thereby stopping my unemployment check and triggering my student loan payments which my low paying job couldn't cover. Duh! It is a great example of economics at work.
Belmont31R
12-07-10, 17:34
some relevant info...
Yes Im sure they had top notch tracking methods back then to catch tax evaders. While 91% seems like a lot no one paid 91% of their income in taxes. Its my understanding it was extremely difficult to prosecute people back then for tax evasion on legal income. Almost all tax prosecutions were for people doing illegal things.
I would rather face being rich in the 50's, and being told to pay 91% with the technology back then than try to evade a few thousands off my taxes today with everything on electronic records. Even today people evade taxes left and right. Take 10k cash in a week, and report 5k, ect. I worked for a business way back when, and saw the owner do that left and right. A customer would come in for some work, and if they paid cash he'd put it in his pocket. Small store where maybe 5-10 people came in a day but spent lots of money if they did. Cash in the register was just for change. Someone could come in, drop 1k in cash on the counter, it went in his wallet. When he went to pick up parts he paid in cash.
Only if it makes sense to do so; i.e., a decent return on investment. This means more than just the marginal tax rate. Without the ROI there is no incentive for me to hire anyone.
You're reading a little too much into what I'm saying. All I'm saying is that the less the government confiscates from you, the more you will have...to do with whatever the hell you want. You would have the choice to determine if it was in your best interest or not. If Fedzilla takes it you don't get that choice. Period.
You're reading a little too much into what I'm saying. All I'm saying is that the less the government confiscates from you, the more you will have...to do with whatever the hell you want. You would have the choice to determine if it was in your best interest or not. If Fedzilla takes it you don't get that choice. Period.
Oh, I am with you on that, for sure, but it still won't encourage me to hire someone if the ROI isn't there.
But the point of my previous posts was the myth that high income taxpayers won't hire someone to make another taxable dollar for them simply because they would have to pay an addition 4 to 6 cents per dollar in taxes above what they were already paying.
Yep, an additional 4 to 6 cents on the additional dollar of net taxable income. Big deal.
I am all about total return. But maybe that is why I am much more concerned about the potential increase from zero to 55% tax on net taxable estates.
Belmont31R
12-07-10, 18:01
You're reading a little too much into what I'm saying. All I'm saying is that the less the government confiscates from you, the more you will have...to do with whatever the hell you want. You would have the choice to determine if it was in your best interest or not. If Fedzilla takes it you don't get that choice. Period.
The main point is the less you tax the more people have to create more wealth with, and then your tax base expands. Its called the Laffner Curve for those who don't know. Once you get above a certain percent you start getting less revenue in, and over time less taxes makes for wealthier people. Would you rather tax 50% of 250k or 30% of 500k? High taxes can create short term gains because people have money now but in the long run you deplete your tax base. Lower taxes over the long run generates more revenue. Such as the employee giving you a return of 200% year after year. After enough years your tax base is going to be much larger than if you got taxed so much in the first place you couldnt afford that employee, or got taxed enough you couldnt hire the best.
Two periods on GSJ's chart prove this. The Roaring 20's and then the stagnation of the 30's until WW2 bailed us out. After the GD there were 2 recessions before WW2 took off in 39/40/41. After WW2 there was also a period of stagnation. There was also a depression in 1919/1920. Lowering of the tax rates in the 20's brought upon us a huge leap in society. I don't have the figures in front of me but the number of people with electricity in their homes went way up, it was the biggest leap in vehicle ownership in history, ect. Once the GD hit worldwide and taxes went way up were in stagnation for a long time even past WW2.
The late 80's and 90's was also a huge advance in society like there was in the 20's once taxes went down. We had the introduction of computers and the internet.
One thing people get distracted by is boom and bust cycles. They are always going to happen with or without high taxes, and is normal in a healthy economy. You have to look at WHY they happen though. The tech bubble was companies taking risks to get in on the huge advance in technology with the PC and internet. When the music stopped only enough chairs left for some. The market corrected, and the strongest remain today. Its not like this recession where the gov was pushing homes for everyone wth cheap interest rates, pushing policy that helped this along, ect. If you look at actual free market innovation the two biggest leap decades the top tax rates were low.
Bush also had good numbers despite the recession. I believe he had the longest stretch of both positive GDP growth and employment. All people remember, now, is the last 5 months of his presidency which is unfortunate because that ball got rolling in the 70's and came to a rest just as he was leaving office. Leaving the housing crash out of this since it doesn't have much to do with tax rates the biggest 3 decades in the last 100 years all were the top 3 years with the lowest tax rates. The roaring 20's, 90's with the tech boom, and 2000's with the longest stretch of positive GDP growth.
The roaring 20's is a prime example of how tax rates effect a society. Do some reading on it, and about Coolidges presidency. The liberal education system will demonize him and prop up FDR as a hero but just look at the facts and figures. Coolidge was paying down the debt, few people actually paid an income tax, and it was the biggest leap in society in the first half of the 20th Century.
Would you rather tax 50% of 250k or 30% of 500k?
Since you asked, I would rather see a flat tax of someting like 7.5% to a max of 10%, and reduced federal and state spending.
I agree that if we are taxed lower we will have more money to spend or invest. Absolutely!
But a 4 to 6 percentage point difference in marginal tax rate won't, in and of itself, cause me to hire or to not hire someone.
Gross estate includes assets without considering debt. I always only look at net assets (assets minus debt) as that is what I will pass on to family, minus expenses of estate, of course.
If you mean for taxable purposes, my estate attorney, who is also a CPA told me that before the estate change on January 1, 2008 that your statement is incorrect. Deductions, according to him, happen after the taxable trigger. Thanks to Bush, I didn't owe taxes on any of it.
Again, I'm no CPA or estate attorney, but he was quite adament that it was...ahem...fortunate that my mother died in that tax period.
If you mean for taxable purposes, my estate attorney, who is also a CPA told me that before the estate change on January 1, 2008 that your statement is incorrect.
PM sent to keep this side discussion out of the main topic.
CarlosDJackal
12-07-10, 23:47
I'm still trying to figure out how cutting my taxes adds to the deficit. :confused:
When Bush cut taxes and lowered the interest rates I ended up buying a house. Along with that purchase, I also bought a new refrigerator, tv set, a buch of other household items and services and an increase in my Property Taxes. Since then I purchased two new cars and a bunch of guns and ammo.
All in all; I added to the local influx of tax revenue. This year, I had to cut back because my taxes increased. Which means I did not buy as much items or services as before.
Sooo, can you articulate how cutting my taxes (which results in increased specning on my part) adds to the defecit? :rolleyes:
according to the non-partisan Congressional Budget Office
That is a ****ing joke.
And about inefficient ways to grow the economy, how did that $880 bn stimulus, the 2nd mini stimulus, the TARP bailout, government takeover of GM, and massive increases in welfare spending work out as far as growing the economy? :sarcastic::sarcastic::sarcastic:
Sooo, can you articulate how cutting my taxes (which results in increased specning on my part) adds to the defecit? :rolleyes:
Because the government owns all of your money, and if it increases the amount you get to keep that decreases what the government has.
See? ;)
:laugh::laugh::laugh::laugh::laugh:
Belmont31R
12-08-10, 00:44
I'm still trying to figure out how cutting my taxes adds to the deficit. :confused:
When Bush cut taxes and lowered the interest rates I ended up buying a house. Along with that purchase, I also bought a new refrigerator, tv set, a buch of other household items and services and an increase in my Property Taxes. Since then I purchased two new cars and a bunch of guns and ammo.
All in all; I added to the local influx of tax revenue. This year, I had to cut back because my taxes increased. Which means I did not buy as much items or services as before.
Sooo, can you articulate how cutting my taxes (which results in increased specning on my part) adds to the defecit? :rolleyes:
Go back a page or two, and look at the youtube vid I linked. The current government (Congress and Executive) view all the money as theirs, and them letting you keep it is them paying you.
Of course people having more money in their pocket spurs growth. How many times does a dollar exchange hands in a year? You buy something, that business either pays its employees or buys new stuff to sell, that employee either spends it or if it went to buying more goods someone got paid to produce and sell it, ect. Take that dollar out, and it doesnt exchange hands the same way.
Again....go look at the Laffner Curve. We are at a point where people being taxed is counter productive to tax revenue and economic growth. Its not just the Federal income tax. That is one but MANY taxes. Our property taxes are going up several percent a year. Sales taxes are rising. There are so many taxes out there someone paying 30% income taxes can quickly end up paying 50%+ of their income into taxes.
Dont forget because corporations are evil we have one of the highest business taxes in the world, and that is factored into the price of everything we buy. So people really are paying tons of money into taxes but dont even realize it.
All because our gov has turned socialist, and a good 2/3rds of our budgets (fedgov and state) are for social spending. Not only is Fed gov spends around 2 trillion a year on wealth redistribution but our state and local governments are spending like crazy too. Go to your county health department, and just sit there for an hour. Here I did that because my wife had to get a sign off for her nursing school application, and it was full of non English speaking people getting on benefits, free vaccines, free this and free that. It was like a revolving door for preggers to come in and get on the dole. People bringing in 5 kids at a time for shots. Signing up for welfare. WIC.
Its not just the Federal income tax. That is one but MANY taxes. Our property taxes are going up several percent a year. Sales taxes are rising. There are so many taxes out there someone paying 30% income taxes can quickly end up paying 50%+ of their income into taxes.
Truth
Federal Income Tax Brackets For 2010 – Based On Taxable Income Ranges
Tax Rate - Married Filing Jointly - Most Single Filers
10% - Not over $16,750 - Not over $8,375
15% - $16,750 to $68,000 - $8,375 to $34,000
25% - $68,000 to $137,300 - $34,000 to$82,400
28% - $137,300 to $209,250 - $82,400 to $171,850
33% - $209,250 to $373,650 - $171,850 to$373,650
35% - Over $373,650 - Over $373,650
15.3% Federal Payroll Taxes:
12.4% of gross pay up to $106,800 for Social Security
02.9% of gross pay (no limit) for Medicare
Employed people split these with their employer, each pays half
Self employed people pay the whole thing.
Edited to add Federal Unemployment Taxes:
6.2% of the first $7,000 of gross pay
State and Local Taxes in Austin:
2.25% real property tax - approximately 2.25% of the assessed value of your home or income property
For example, around $10 thousand per year on a $500 thousand house
8.25% state sales tax on most items except for unprepared food and medical services and supplies
$0.20 per gallon of gasoline or diesel, plus sales tax
13.52% fees and taxes on cable bill (Internet, phone and cable)
And then there all the other miscellaneous fees and taxes such as vehicle license, etc.
It is a heavy burden indeed!
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