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August 30, 2010

Bush tax cuts for rich

I grow increasingly frustrated hearing the Republican legislators and pundits whine that if the George W. Bush tax cuts are allowed to expire for the wealthy — defined as joint filers with taxable income of over $250,000 — then thousands of jobs will be lost. The mantra is that unemployment will increase because the increase hits small businesses, which create jobs.

This claim is both unprovable and illogical. Keep in mind that taxable income is adjusted gross minus your exemptions and deductions, so $250,000 may be $300,000 in adjusted gross income. At that level of income, the effect would be an additional $30 in federal income tax for every $1,000 of additional income — an amount that is not likely to affect anybody’s purchasing decisions.

But most importantly, an employer does not pay taxes on the money spent on employee salaries and benefits, so the tax rate you pay on what’s left is irrelevant to a decision whether to hire someone.

Any businessman who would decide not to hire someone because he would have to pay an extra 3 percent to 3.6 percent on his taxable income isn’t smart enough to be successful anyway.

David P. Troup
Manhattan, Kan.

Comments

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GCYL

“Crib Note: You’re warped, frustrated old men if you think I‘m going to cut spending. Nothing changes with me. The choice will always be between you paying more or you paying a lot more. I choose the latter.” - Posted by: whispering_to_kc | Sep 1, 2010 5:11:54 PM

Can't wait for whispeing's next lecture on "warped".

whispering_to_kc

http://www.ritholtz.com/blog/2010/04/tax-burden-on-various-americans/

“There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.”

**********

It's a class war, indeed. The upper crust are winning ... for now.

whispering_to_kc

George Bailey talking to S[tupid]er-Than-You and Zeno ...

http://www.youtube.com/watch?v=O4ne13Zft9Q

Warped, frustrated old men. And those collars? Your fashions could use some updating as well, boys.

Nothing changes. The choice will always be between "Pottersville" or "Bedford Falls". I choose the latter.

Smarter Than You

“That's garbage the bush tax cuts didn't do the economy any good they weren't paid for and done through reconciliation”-Lyon

Gee, substitute “Obamacare” for “Bush Tax Cuts” and I wonder why Lie-ons’ panties aren’t in a wad over what this administration has done? I guess the rich were the only ones to have children so only they profited from Bush’s doubling of the child tax credit.

Do tax cuts spur business growth? There are two sides to that and other factors to be weighed; what is empirical is the stimulus didn’t. But spending money we don’t have is now an art form for this administration.

Of course Lispering has to weigh in with his usual nonsense. Let’s look at the second and third richest men in the world, both Americans. They have already committed to giving at least half, and one to 99%, of their fortunes to charity. But it is much more important for Lispering and his cast of idiots to control what is done with the money these people have legitimately earned and already paid a higher tax rate on than any other Americans. The only difference between a Democrat and a Street Thug is Democrats use a fountain pen. Maybe we should be asking for “fountain pen control” laws. . .

Rueters Aug. 6, 2010
“Raikes said the Gates and Buffett Giving Pledge campaign to urge America's rich to give away most of their fortunes during their lifetime or upon their death, which so far has 40 billionaire members, would be a "seminal moment in history."

Buffett, who made his fortune with insurance and investment company Berkshire Hathaway, pledged in 2006 to give away 99 percent of his fortune, most to the Gates Foundation, while Bill and Melinda Gates have so far given more than $28 billion to their foundation.”

Cut spending! Say it along with me, lefties. It’s just three syllables. Cut Spending!

Zeno

Yes of course that is the only number the lying one wants you to know.

He's hoping people will not notice that the 1% who make 22% of the income already pay 40% of the taxes.

Brandon, how do you pay for a tax cut? I will answer for you as I am certain you will not. You do not pay for a tax cut. It may or may not mean the feds end up with less to spend. So then you spend less. Just like the rest of us do when our income goes down.

whispering_to_kc

The Bush tax cuts for the upper crust (and two wars, one for cause and one not) pushed us into deficit spending.

Between 1960 and 1980, the top 1% of us earned less than 10% of total US AGI. In 2006, those same 1% earned 20% of total American AGI.

Those are the only numbers you have to know. Everything else is clutter.

Brandon Lyons

That's garbage the bush tax cuts didn't do the economy any good they weren't paid for and done through reconciliation that's why there had to let them expire in ten years howb is something that in simple terms was a give away to the rich helping the economy it helped their pocket books and only their pockets.....thought people on the right making statements that nothing would be passed unless it was paid for....you all try to hide simple things behind a whole lot of numbers...its not paid for its as simple as that

Smarter Than You

And I'm still waiting for you to source your "numbers."

Smarter Than You

You went from cute to just plain dishonest, GG. This is about an income tax, yet in your last post you want to stick it to the successful for accumulated wealth, not what they made that year. Talk about draconian.

My own source noted that the highest end lose the most in a downturn and make the most in a recovery. . .and are already taxed the most on what is made each year (income).

It is truly insipid that under the guise of “income tax” you are trying to justify your position with numbers other than income.

Unfortunately, it’s the same chutzpah that allows GG to claim Obama cabal hasn’t raised taxes when there is clear documentation provided that he has.

Leopold

"The reason I ask is you assert the good folks paying 40% in taxes make 40% of the income, yet. . ."

Cute, also, is to make something up then attribute it to me. Surely you realize the difference between wealth and income. Since you are unable to grasp the easily deducible reason why 1% now pays more than 95%, let me break it down for you.

You make more money, and others make less, you pay more taxes, easy as that. From 2002-2007 the Adjusted Gross income shares for the top 1% have grown from 16.12% to 22.83%. Now, since total income is a set amount. AGI shares has to decrease elsewhere. When AGI shares decreases, so does tax share. When AGI shares increases, so does tax share. Is that truly a surprise.

Not to be compared to Nostradamus, I'll go out on limb and predict that next year, if the AGI for the top 1 percentile increases, then the AGI will decrease elsewhere and that the top 1% will have a higher tax share. Still don't get it? Well, one last try. You and a friend make $100 each, all things being equal, you will pay the same tax share. Next week, you make $150, your friend makes $50, the same being equal, you will have a higher tax share.

whispering_to_kc

People need to fight back.

It should have been clear long ago that the "trickle down" advantages claimed to justify the cushy tax treatment of rich folks since Reagan's day was only most of us being "trickled on" instead.

The only mystery that should remain is how they still manage to enlist the aid of sycophants like those who appear here on their behalf.

ggbridge

Right, so taxes were not raised in 2009 and will not be raised in 2010. Still waiting for your stellar defense of Roy Blunt and how the K street lobbyists will save the world.

Smarter Than You

I think it’s cute, Leo, when you accuse others of utilizing “fudged numbers” yet you always insist on framing your arguments within certain parameters to take advantage of economic forces. You’ve managed to get the dot.com bubble in your early seven years and the meltdown in the latest seven.

And would you be so kind as to source your numbers? The reason I ask is you assert the good folks paying 40% in taxes make 40% of the income, yet. . .

TAX FOUNDATION, July 30,2009
“In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes and earned 22.8 percent of adjusted gross income. Both of those figures—share of income and share of taxes paid—are significantly higher than they were in 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes.

For the first time this year, we are also presenting data on the top 0.1% of tax returns (the top 10 percent of the top 1 percent). This 10 percent of the returns in the top 1 percent amounts to only 141,000 tax returns but accounts for nearly 12 percent of the adjusted gross income earned and approximately 20 percent of the nation's federal individual income taxes.

The IRS data also shows increases in individual incomes across all income groups (see Table 3). Just as the highest earners lost the largest percentage of their incomes during the recession of 2001, so they have prospered the most as the economy continued to rebound through 2006.”


MARKET WATCH, April 14, 2010

“In closing, I’d like to point out that we are increasingly relying upon a smaller and smaller segment of our citizens to fund Federal government operations. This is also true at the state level. Whether you think that is good or just or fair or not, I submit that it is not sustainable because the Feds are spending more and more, yet taking the taxes from fewer taxpayers. “


No further comment needed. . .

Smarter Than You

Two comments: 1)While I can’t help GG in his struggle to grasp the English language, here are some documented tax increases Obama has signed off on. 2)There is also the de facto tax increase if Democrats let the Bush era tax cuts expire (but I fear figuring out “de facto” will cause poor GG to weep into his keyboard).

Bloomberg March 24, 2010
“Indoor tanning salons will charge customers a 10 percent tax beginning today in just one of the changes Americans will see as a result of the U.S. health-care overhaul signed into law by President Barack Obama.”

AMERICANS FOR TAX REFORM, April 2010
Obamacare taxes:

Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax

Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single).

Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions

Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin)

NYT, July 17, 2010

“WASHINGTON — When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”
And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.
Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.
In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.”

WSJ, August 5, 2010
“Lately a lot of Democrats are taking the ObamaCare walk of shame, and not only those whose votes may return them to the labor market this fall. Liberals still think the bill didn't raise taxes enough.
So they've cooked up a virtuoso new scheme. A phalanx of powerful committee Chairmen—including Henry Waxman (House Commerce), Max Baucus (Senate Finance) and Sander Levin (Ways and Means)—want to tax the taxes that the health insurance industry already pays.”

ggbridge

I'm sorry STY, but you started your somewhat intereting post with the insipid, "Additional comment isn’t necessary if you can read for content." I DID note the separation of posts and the second said, "Noted with two comments." Really? And you would let that go in what world? If only GC were here to hide that gem in his list of quotes.

So I guess I can comment then? Right, just checking. Obama hasn't raised taxes. I know, because I, and our tax guy, do our taxes and last year was, well record setting, really.

I agree that it is going to be a tough fall for democrats and I really don't get it. I especially don't get Missouri sending Roy Blunt to the senate. Roy Blunt, corrupt and nepotistic to the core. Lobbyist-loving, ear mark specialist and special consideration for Phillip Morris, all back in Washington. I honestly can't believe it.

For me, it discounts anything the Missouri tea party might have to say about politics. They are as completely corrupt as he is. I can't wait to hear your defense of this guy, STY. Be sure to tell me if I can comprehend english, I shouldn't have to comment. Welcome to the Hotel Missouri, you can check out any time you like, but you can never leave.

Leopold

Stephen Moore, 2007
“The Congressional Budget Office reports that, since the 2003 tax cuts, federal revenues have grown by $745 billion—the largest real increase in history over such a short time period. Individual and corporate income tax receipts have jumped by 30 percent in the two years since the tax cuts.”

Prime example of how numbers are fudged. From 2003 til 2007 it did raise 785 billion(actually)....and fell 463 billion since. For a total of revenue growth of 322,674 billion in 7 years. Hmm. The seven years before the 2001 tax cuts? 870,857 billion dollars.

Corporate taxes grew 30% between 2003-2007. Since? In 2009 the coporate tax revenue was 138,229 up from 131,778 in 2003 for a whopping total of $6,451 billion for a 7 year increase. 7 years prior to the 2001 tax cuts? Over ten times that! $66,904 billion. Yep those Bush tax cut made the U.S. a whole lot better!

“New data Released by the IRS has just shown that the top 1% income earners pays more in tax than the bottom 95% combined."

The horror! Why would 1% pay 40% of the tax revenue considering they own almost 40% of the wealth? No comment necessary if you read for content. But in case it eludes, Normalized to 1979, the top 1% have seen their share of America's income more than double. The bottom 90% have seen their portion shrink. But they need that tax break....or else.

Smarter Than You

"what's a rich person supposed to think?"-GG

Rich or poor, the thought would be that there were two distinct and separate posts. It's easy to figure out; if there is a line at the end that says "Posted by:" with a name and a time (in blue font), that's generally a clue the post in question has ended.

Poor me; I was hoping you would have something factual or at least semi-literate in response to either of those two separate posts. I placed that bar too high for you, and for that, I apologize!

ggbridge

STY, you just said that additional comments wouldn't be necessary if I read for content, then you added two comments. Really, what's a rich person supposed to think?

Smarter Than You

Noted with two comments:
1) Raising taxes, not providing jobs as promised, Obamacare, Stimulus, corruption, ignoring Fan/Fred and massive deficits seems to not be working out for the Democrats. Who could have guessed?
2) Republicans learned a painful lesson after eight years (six with congressional control), but THIS Dem. group has pushed so far past the boundaries of responsibility and respectability that the repudiation is hitting after a mere 24 months. Thanks, Mr. President, for making us remember that we are a conservative nation and why your kind of “change” is dangerous to our country!

FINANCIAL TIMES:Published: August 31 2010 20:04
Barack Obama’s Democratic party faces a series of dramatic defeats at every level of government in Washington and beyond in the November midterm elections, according to leading analysts and opinion polls.
The University of Virginia’s widely monitored Crystal Ball will on Wednesday forecast sweeping setbacks on Capitol Hill and the loss of a clutch of state governorships on November 2.
It follows a Gallup poll that showed the Republicans with a 10 percentage point lead over the Democrats – the widest margin in 68 years. Separately, a University of Buffalo paper has predicted a 51-seat gain for Republicans in November.
The Democrats have a 39-seat majority in the House of Representatives. Many believe Democratic control of the Senate is also at risk.
“Voters are going to deliver a big fat message to President Obama, which he will not want to hear,” said Larry Sabato, who runs Crystal Ball. “The Republican base is at least 50 degrees further to the right than where it was when Newt Gingrich took control of the House in 1994, so we would be looking at two years of absolutely nothing getting done on Capitol Hill.”

 
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