Tax Cuts

Discussion in 'Politics' started by Mensch1351, Aug 22, 2010.

  1. Mensch1351

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    OK...........I'll admit it.........I'm not a wizard when it comes to my own personal finances let alone the finances of the country! However, if the current tax cuts should be extended (as the Republicans argue).. could someone please tell me just WHAT the tax cuts accomplished when they were put in place 10 years ago??? Did they do what they were SUPPOSED to do??
     
  2. Industrialsize

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    Yes the tax cuts worked fine...They made the wealth, wealthier........(the trickle down part, not so good)
     
  3. B_Marius567

    B_Marius567 New Member

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    Everyone got a tax cut.
     
  4. Jason

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    The debt of the USA is something like $13.2trillion. The debt is approaching a year of total productivity of the whole US economy - and it is still edging higher. It was higher in the late 1940s (as a % of GDP) but the present position is pretty dire.

    The usual solution would be:
    * cut expenditure
    * raise taxes
    * allow the currency to devalue

    All risk creating problems if they are done too quickly or too severely - but there are also problems if they are not done. It would seem that anyone looking impartially at the US economy right now would probably favour a mix of all the above.

    The other side of the coin is boosting productivity which may well be through tax cuts. There is an argument for governments to invest to boost productivity, but only when they can prudently do so, and it is pretty clear that the US government cannot prudently do so. The reality is presumably that the opportunities for tax cuts are very limited - there may be a case for a reduction in corporation tax, but that's about it.

    Not sure whether this is an answer to the OP's question.

    A more controversial answer would be that the best possible policy of the US government would be to do nothing. There are problems with increasing and decreasing tax, problems with cutting and not cutting expenditure. All the time there is confidence in the economy then let the markets resolve the problems through currency devaluation and inflation. As long as both are gradual and modest they act as safety valves. Of course the PR is difficult - no politician wants to say that their grand plan is to do nothing. Yet this might be the best possible approach.
     
  5. B_VinylBoy

    B_VinylBoy New Member

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    That's like saying everyone got a piece of the pig, except the few greedy people get all the flesh while the rest get the wasted parts like the intestines. But hey, as long as people get to eat, right? :rolleyes:

    No sense in suggesting that people are treated equally when the value of that treatment is not equal.
     
  6. TomCat84

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    Seems to me that the GOP's only econmic plans are thus:

    -If the economy is up, and we have a surplus- CUT TAXES! FOLKS DESERVE THEIR MONEY BACK!

    -If the economy is down- CUT TAXES! WE NEED TO STIMULATE THE ECONOMY!

    Meanwhile, government services suffer, because everything is cut- except for military. The military budget is sacrosanct- hell, it was like pulling teeth just to get a few F-22s cut out out of the budget- planes even the Pentagon didn't want. Lots of congressman talk a good game about pork- but god forbid you try to cut a few useless defense programs in their district. The Bush tax cuts need to expire for EVERYONE. The Defense budget needs to be cut. First and foremost, get the hell out of Iraq/Afghanistan. If we insist on staying in those shitholes, then we need to RAISE taxes. At the very least, institute a payroll surcharge. The Bush tax cuts should have been expired the minute we went into those shitholes. Bush was the first President in US History to actually CUT taxes in a time of war. Lop off at least $100 billion from the Defense budget. Raise the retirement age for Social Security. This is why I'm not in politics, folks. I'd never be elected dog catcher of Crawford, Texas- let alone be able to affect the US budget.
     
  7. vince

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    I agree with you TC. I think America needs to quit borrowing and get on a pay as you go plan. I'd slash the military, farm subsidies, congressional expense accounts, make people work for welfare, raise taxes on fuel and bring in a VAT.
     
  8. TomCat84

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    Ah yes, I had forgotten about farm subsidies. I'm not so sure about cutting all of them. I think farmers sometimes need incentives to grow a variety of healthy foods- as often times the most profitable crops aren't always the ones we need to eat, and in some instances, farmers may be tempted to sell their farms to tract home developers: that needs to be stopped as much as possible. We should start offering tax credits and subsidies for small farmers and for organic growers, and quit giving money away to agri-business.
     
  9. vince

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    Big Agri was what I had in mind. All the redundant defense workers and defense companies should be put to work doing R&D on energy projects, transportation and other useful things for the people who pay the bills.
     
  10. midlifebear

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    Well, speaking as a greedy capitalist pig, I remember sitting in my CPA's office in 2006 after having sold a large patch of good Ewetaw bottom land that is now a Target, Super Walmart, Home Depot, COSTO, and a bunch of other large box commercial entities and remarking how amazed I was at having to pay what, since the US first imposed a capital gains tax was the least capital gains tax imposed upon by the IRS. I paid 5% on what historically would have been 28%. I actually owed much more in regular income tax (like, uh, from a business and job). The capital gains tax had been diminishing annually because of the Bush/Cheney overlords. And I was a bit embarrassed to realize that I had just made a whole lot of money and was able to keep most of it. That's also when I realized how little ten million dollars is compared to the value of $100,000 in 1960.

    Add to that, for decades I had been comfortably raking in more than the paltry $250,000 often talked about how we middle class "rich" people need to protect from high taxes these days, this, despite the fact I had been amazingly flush since the 1970s. But I'm not greedy. I've never seen a problem with paying my fair share of taxes.

    Then I found out that a close fried who works as a corporate attorney for one of the world's largest mining companies had made less than $250,000 that year and paid proportionately more than I had in income tax. He and his wife were just "scraping by" barely able to make their Lexus and BMW payments along with their mortgage. (In the USA I drive a 1995 Dodge RAM pickup. It's paid for.)

    There's a taboo that I accuse the rich having cultivated regarding the talk of money. Many friends who earned $30,000 to $75,000 a year were/are seriously struggling. But they are looked down upon it they dare broach the subject of personal income as a topic of discusssion.

    As for "investing" in 'Mericuh and creating more jobs, I ended up closing down one enterprise in 2007/8, primarily because I didn't have the interest or energy to keep it going. But I did offer to sell it to my employees. They sniffed and declined the offer. So, instead of "investing in 'Mericuh" I've been taking my annual booty out of the USA and investing in other countries. My old employees, who were basically nice people, now wish they had purchased that business from me. It would have kept them semi-flush when the economy collapsed.

    But back to what does letting the Bush/Cheney tax voodoo curse expire really mean? Well, people like me will be paying a whole lot more in taxes. In fact, this year I paid several more bucket loads than I had originally expected. But unlike those who insist the Bush/Cheney tax break should not expire, if and when it does (I hope it does), I won't have to see as many sad things as I happened to see yesterday. As I waited for the very confused employees at the Walmart Auto Service Center in Elko change the oil in my 15 year-old truck, I watched a series of customers staring at new tires that would keep their cars safe and road worthy while calculating how much more credit card debt they might be able to take on at 29%+ a month. One young couple struck an especially sad chord with me as the father pulled two $90 generic snow tires off the racks and asked the service clerk to put them on lay-away, hoping that before it snows he can rescue them and drive his wife and kids around with a bit more safety. One of the service technicians complained that Walmart took $179 dollars out of his paycheck every two weeks. This included his FICA, income tax, health insurance and NO money was being put in a 401K. And, according to him, his health insurance was a bigger cut each paycheck than his FICA and income tax. Note: Some folks regard FICA and income tax as the same thing all bundled together.

    If the Bush/Cheney Tax Increase Prevention and Reconciliation Voodoo ACT goes away, folks like the service technician at Walmart will end up paying less income tax and greedy capitalist pigs such as myself will end up paying a lot more. I'm all for it. If you're making enough money to be in a high tax bracket you're certainly not going to starve and you're probably going to by that new -- and unnecessary -- BMW or Lexus anyway. And folks earning much less will have more income to save and even qualify to buy themselves a better vehicle or home. Better yet, they'll probably be able to make the mortgage payments they are already saddled with, buy better food for their kids and less Kraft Macaroni and Cheese.

    But you won't get a goose-stepping right wing conservative to agree with me on any of this.
     
    #10 midlifebear, Aug 23, 2010
    Last edited: Aug 23, 2010
  11. Mensch1351

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    thanks mid life bear for what has to be one of the most honest answers I've seen in a long long time to what I believe has to have been one of the biggest scams ever pulled on the average American --- the Bush/Cheny Tax cuts were nothing but a transference of the wealth UP to the Wealthy FROM the middle class.................and now the Republican mantra is going to be "the PEOPLE are upset" Taxed Enough Already

    .................really. I'd like to get a microphone and a camera and go to a TEA party rally and after each regular TV interviewer has his/her way with the good common folk there, MY question would be, "And sir/madam -- just how much did you make last year?"

    If the Democrats don't start speaking up (and really TO) the average American about the smoke screen of "their gonna raise YOUR taxes" (not mine by the way -- I made $33K last year (and that's after 7 years with my generous company!!), they deserve to lose whatever seat majority they gained when people's eyes were clear and their hearts open to see that THEIR interests had been ignored the 10 years the Reps held Congress!
     
    #11 Mensch1351, Aug 23, 2010
    Last edited: Aug 23, 2010
  12. DeepDish

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    Midlifebear has pretty much covered everything. but here's how I remember it.

    - When Bush signed the tax cut bill, it was set to automatically expire this year.

    - It lowered the taxes of 2% of the US Population

    - it only lowered the % of tax from the Clinton era by 4%. From 39% to 35%

    - there was no money in the budget to pay for these tax cuts, so the US had to borrow money from other countries to pay for them. [increased deficit]

    - this was made worst by the costs of the wars. From what I remember this was the first time congress and the president gave this kind of tax cut during war time. [deficit]

    From what I can tell the Republicans are trying to confuse things by misrepresenting the issue

    - They are presenting this as an "Obama Tax Hike," even though the expiration date was signed by Bush.

    - They are being fuzzy on the fact that it only affects the top 2% of the population. 98% of Americans are not effected by it.

    - They are being fuzzy on the fact that taxes will only rise back to a few percentage points.

    - When asked how they are going to pay for these tax cuts (it is going to increase the deficit) they either have no answers, or have answers that don't hold up to common sense.

    Hope this helps a little.
     
    #12 DeepDish, Aug 23, 2010
    Last edited: Aug 23, 2010
  13. Bbucko

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    The "family farm" is now largely a myth, TC. Agri-business took over the whole thing years ago.

    Part of the problem with family farms is the Estate Tax, where the net assets of all that land are so valuable that paying the tax is impossible for folks who are, in the real sense of the word, land-poor (I used to use that expression when living in Boston in my 20s, when my rent was usually 50-65% of my take-home pay). An exemption for family farms would solve that issue, but don't hold your breath.

    Fact is, the only way farming can be made profitable is when it's either subsidized by the government or controlled by a company large enough to absorb the costs of maintaining machinery, investing in the required infrastructure of irrigation, etc, and the vagueries of weather (drought, floods, etc). Politicians from farming states depend on agricultural subsidies to keep their constituencies (Agri-business) happy and would be ousted with even a whisper of reform coming from their lips.

    I may be seriously mistaken on this one, but IMO the best way to ensure that local, organic micro-farms (and other types of independent family farms) thrive is through local (state) subsidies, not federal ones: state authorities are much more apt to draw the correct lines between small, family farms and food factories.
     
  14. dandelion

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    you know, what Ive learnt from these boards is that while British politics is a bit nuts, the US is insane. Cameron in the UK is from the nominal right/tax cutting side of politics but by comparison with the the situation in the US with a president from the left, were laughing. The US government is quite plainly playing the game that when your debts are so big...its every one elses problem, not yours. I have heard that the majority pf the US population doesnt care anything about foreign affairs, but it would seem they dont care about federal affairs either. Is the place ripe for a revolution yet to install a democracy?
     
    #14 dandelion, Aug 23, 2010
    Last edited: Aug 23, 2010
  15. sargon20

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    The unproven belief is that tax cuts fuel the economy which then in turn increases tax revenue. Sound strange? That's why it's called 'voodoo economics'.


    http://en.wikipedia.org/wiki/Supply-side_economics
     
  16. D_Sir Fitzwilly Wankheimer III

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  17. D_Gunther Snotpole

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    Ronnie was probably a nice guy with nice projection and some very nice lofty delusions ... but he knew dick-all about economics.
     
  18. sargon20

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    Ahhh Ronnie..............

    As president, though, Reagan pursued policies that were short-sighted, reckless and, for many, hurtful. His economic legacy is one of deplorable disregard for the consequences of his actions, and the ramifications of Reagan's decisions remain with us to this day.

    .............

    On the matter of deficits, Reagan nearly tripled the gap between the amount of money the federal government took in and the amount it spent. He did this by cutting tax rates by an average 25 percent, while aggressively increasing defense spending.
    And the biggest downside of all is the American public still is mostly clueless to the real cost of his policies that still remain a core belief to the Republican Party even as they rail against the deficit while simulatenously pushing for tax cuts. As if the two are not related. Duuuhh
     
    #18 sargon20, Aug 23, 2010
    Last edited: Aug 23, 2010
  19. D_Gunther Snotpole

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    But that's how the voodoo works, s.
     
  20. sargon20

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    ^ Voodoo indeed :eek:
     
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