The Economy of Policy
June 23, 2003 2:43 PM Subscribe
Look, I'm a bleeding heart liberal that can't stand President Bush, but this seems obvious even to me: how can you you possibly expect tax relief for people who pay little or no taxes? Those low income people who reside in the lowest tax bracket get back every penny they paid in taxes and very often with the earned income credit they get back more than they paid into the system. That's not tax relief, that's welfare. We can debate whether or not the welfare is justified and beneficial to society, but the bottom line is that the married poor don't need tax relief because they already pay no taxes.
posted by Lokheed at 3:23 PM on June 23, 2003
posted by Lokheed at 3:23 PM on June 23, 2003
Those low income people who reside in the lowest tax bracket get back every penny they paid in taxes and very often with the earned income credit they get back more than they paid into the system.
The article states quite clearly that these groups are the beneficiaries of income tax cuts and other provisions (including the EIC) to eliminate the minority that suffer from a "marriage penalty" under the original 2001 tax cut. However, while all other demographics are receiving accelerated tax benefits (of whatever form) under the current 2003 plan, this poor demographic is the only group for whom planned tax benefits were not provided on an accelerated schedule.
It seems to me that if you are going to claim that speeding up the rate of tax relief or speeding up the rate of marriage-penalty elimination for some people is best for the economy, then those in the lowest brackets should be relieved from any marriage penalties (in whatever form they take) ASAP, as well.
posted by deanc at 3:52 PM on June 23, 2003
The article states quite clearly that these groups are the beneficiaries of income tax cuts and other provisions (including the EIC) to eliminate the minority that suffer from a "marriage penalty" under the original 2001 tax cut. However, while all other demographics are receiving accelerated tax benefits (of whatever form) under the current 2003 plan, this poor demographic is the only group for whom planned tax benefits were not provided on an accelerated schedule.
It seems to me that if you are going to claim that speeding up the rate of tax relief or speeding up the rate of marriage-penalty elimination for some people is best for the economy, then those in the lowest brackets should be relieved from any marriage penalties (in whatever form they take) ASAP, as well.
posted by deanc at 3:52 PM on June 23, 2003
One more reminder: those with the least disposable income are the most likely to put it into circulation on a refund.
(I'm included, even though I'm not married poor.)
posted by namespan at 3:55 PM on June 23, 2003
(I'm included, even though I'm not married poor.)
posted by namespan at 3:55 PM on June 23, 2003
Let them eat cake.
posted by madamjujujive at 4:21 PM on June 23, 2003
posted by madamjujujive at 4:21 PM on June 23, 2003
One more reminder: those with the least disposable income are the most likely to put it into circulation on a refund
I don't really understand this argument. What if I take my refund and stick it in the bank. The bank will loan the money out to someone else who will spend it.
If I buy stock with the refund, someone else is selling the stock to me and taking the cash.
If I buy a yacht with the refund, the yacht builder (and her employees) take the money.
What am I missing?
posted by Mid at 4:39 PM on June 23, 2003
I don't really understand this argument. What if I take my refund and stick it in the bank. The bank will loan the money out to someone else who will spend it.
If I buy stock with the refund, someone else is selling the stock to me and taking the cash.
If I buy a yacht with the refund, the yacht builder (and her employees) take the money.
What am I missing?
posted by Mid at 4:39 PM on June 23, 2003
it's fair, but mean. a married household that can't pull enough to pay taxes needs the money more than any of us.
posted by mcsweetie at 4:41 PM on June 23, 2003
posted by mcsweetie at 4:41 PM on June 23, 2003
It's all fine they quote you averages but averages don't tell you the actual distribution. Imagine that 1 million americans get back an average of 3 dollars in taxes. Well in that group of 1 million we'll put Cheney. Lets just say he got back 2000000 of taxes he actually paid (assuming he pays taxes).
Now the 999 999 other americans get back a little more than 1 dollar each; but the average was 3. Only one person gets more than 3 dollars back whereas 999 999 others get only a 1/3 of that. It's so hard to trust any information from politicians these days especially when they hire experts to help cover up the true plan with statistics.
posted by abez at 4:58 PM on June 23, 2003
Now the 999 999 other americans get back a little more than 1 dollar each; but the average was 3. Only one person gets more than 3 dollars back whereas 999 999 others get only a 1/3 of that. It's so hard to trust any information from politicians these days especially when they hire experts to help cover up the true plan with statistics.
posted by abez at 4:58 PM on June 23, 2003
Mid: If you're poor, the refund goes back into your own community, helping those who live near you. A dollar back to you not only helps you, but helps the clerk at the grocery store and her children.
If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
A hundred thousand in refunds spread across ten thousand people is likely to have meaningful effect in ten thousand communities, whereas a single hundred-thousand refund is likely to have a more focused affect (again, one that might not even benefit Americans).
posted by five fresh fish at 5:45 PM on June 23, 2003
If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
A hundred thousand in refunds spread across ten thousand people is likely to have meaningful effect in ten thousand communities, whereas a single hundred-thousand refund is likely to have a more focused affect (again, one that might not even benefit Americans).
posted by five fresh fish at 5:45 PM on June 23, 2003
how can you you possibly expect tax relief for people who pay little or no taxes?
Exactly, because payroll taxes aren't taxes. And sales tax isn't tax. And property tax isn't tax.
My share of the take for when we sold our country down the river?
$7 per week.
And I do pay taxes.
posted by goethean at 7:50 PM on June 23, 2003
Exactly, because payroll taxes aren't taxes. And sales tax isn't tax. And property tax isn't tax.
My share of the take for when we sold our country down the river?
$7 per week.
And I do pay taxes.
posted by goethean at 7:50 PM on June 23, 2003
Sales and property taxes are state taxes. They are not impacted by the federal plan. As for payroll taxes, I think the point is that with all of the other credits (or simply the lack of a job), the people at issue pay little or no taxes through payroll deduction. Like lokheed said, if you're talking about tax credits for someone who pays no tax, you're talking about a welfare program, which is an entirely different issue.
posted by pardonyou? at 8:29 PM on June 23, 2003
posted by pardonyou? at 8:29 PM on June 23, 2003
goethean: Exactly, because payroll taxes aren't taxes. And sales tax isn't tax. And property tax isn't tax.
Is this sarcasm?
five fresh fish: If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
Poor people buy imported products, too.
Maybe a flat tax would be better.
posted by Frank Grimes at 8:43 PM on June 23, 2003
Is this sarcasm?
five fresh fish: If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
Poor people buy imported products, too.
Maybe a flat tax would be better.
posted by Frank Grimes at 8:43 PM on June 23, 2003
U.S. consumers are estimated to eat 9 portions of ramen each year.
Yah, Frank, those American Poor are just eating Americans out of their jobs.
Care to find me contrary stats, indicating that tax breaks to the wealthy result in local economic benefits? I'm saying you can't: we did a stupid tax break up here in BC, and it ended up generating more benefits for Ontario than for BC!
Provincial tax cuts in BC ended up benefiting people outside of BC more than people inside BC. Federal tax cuts in America are likely to end up benefiting people outside of America more than inside.
posted by five fresh fish at 9:49 PM on June 23, 2003
Yah, Frank, those American Poor are just eating Americans out of their jobs.
Care to find me contrary stats, indicating that tax breaks to the wealthy result in local economic benefits? I'm saying you can't: we did a stupid tax break up here in BC, and it ended up generating more benefits for Ontario than for BC!
Provincial tax cuts in BC ended up benefiting people outside of BC more than people inside BC. Federal tax cuts in America are likely to end up benefiting people outside of America more than inside.
posted by five fresh fish at 9:49 PM on June 23, 2003
Exactly, because payroll taxes aren't taxes. And sales tax isn't tax. And property tax isn't tax.
Well first off, what you call a "payroll" tax is really Social Security and Medicare Tax. Which these same people who do not pay Federal Income taxes, qualify for the Earned Income Tax Credit (EITC). The EITC refunds the amount that they paid in for Social Security and Medicare. So these individuals and couples who do not pay any Federal Income tax, do not pay much or any "Payroll" taxes either. (Nicely enough these same people who are refunded the money they originally sent into the Social Security system, are still allowed to collect Social Security) Furthermore, if you think "Payroll taxes" should be cut, fine. You figure out a way to pay for these monstrous social programs. But do not try to confuse the issue but attempting to merge Income taxes and SS & Medicare taxes. Diffrent fundings and diffrent taxes.
Sales and property tax are a moot point. The Federal Government imposes no sales or property tax, if these taxes exist in your area they are imposed by State and Local Governments. If you believe that your state's sales and property taxes should be "progressive" then your beef is with the state and local governments. It has nothing to do with Federal Income Tax Cuts.
People who do not pay any Federal Income Taxes should not receive money when Federal Income Tax rates are cut. That is not a tax cut, it is a redistribution of wealth.
NEVER LET THE FACTS GET IN THE WAY OF A GOOD AGENDA
posted by Steve_at_Linnwood at 9:51 PM on June 23, 2003
Well first off, what you call a "payroll" tax is really Social Security and Medicare Tax. Which these same people who do not pay Federal Income taxes, qualify for the Earned Income Tax Credit (EITC). The EITC refunds the amount that they paid in for Social Security and Medicare. So these individuals and couples who do not pay any Federal Income tax, do not pay much or any "Payroll" taxes either. (Nicely enough these same people who are refunded the money they originally sent into the Social Security system, are still allowed to collect Social Security) Furthermore, if you think "Payroll taxes" should be cut, fine. You figure out a way to pay for these monstrous social programs. But do not try to confuse the issue but attempting to merge Income taxes and SS & Medicare taxes. Diffrent fundings and diffrent taxes.
Sales and property tax are a moot point. The Federal Government imposes no sales or property tax, if these taxes exist in your area they are imposed by State and Local Governments. If you believe that your state's sales and property taxes should be "progressive" then your beef is with the state and local governments. It has nothing to do with Federal Income Tax Cuts.
People who do not pay any Federal Income Taxes should not receive money when Federal Income Tax rates are cut. That is not a tax cut, it is a redistribution of wealth.
NEVER LET THE FACTS GET IN THE WAY OF A GOOD AGENDA
posted by Steve_at_Linnwood at 9:51 PM on June 23, 2003
Exactly, because payroll taxes aren't taxes. And sales tax isn't tax. And property tax isn't tax.
I'm sorry, I missed the part of the article where it talked about anything besides the federal income tax. The last time I checked there was no federal sales tax, and no federal property tax. If you have issues with those taxes, take them up with your state and local governments, but don't expect the federal government to provide relief from taxes they did not collect.
On preview: what Steve said....
posted by Lokheed at 9:59 PM on June 23, 2003
I'm sorry, I missed the part of the article where it talked about anything besides the federal income tax. The last time I checked there was no federal sales tax, and no federal property tax. If you have issues with those taxes, take them up with your state and local governments, but don't expect the federal government to provide relief from taxes they did not collect.
On preview: what Steve said....
posted by Lokheed at 9:59 PM on June 23, 2003
if you think "Payroll taxes" should be cut, fine. You figure out a way to pay for these monstrous social programs.
That's a good one, Steve.
posted by bigschmoove at 10:51 PM on June 23, 2003
That's a good one, Steve.
posted by bigschmoove at 10:51 PM on June 23, 2003
We should take a tour of the whitehouse and crap in the toilet tanks (affectionately known as an "uppder decker"). Oh. Wait. I'm rich. Nevermind.
posted by internook at 2:34 AM on June 24, 2003
posted by internook at 2:34 AM on June 24, 2003
From the article:
For example, two single parents with one child, each making about $13,000 annually, are each eligible for a credit of $2,506, or $5,012 total. But the combined credit for a married couple with two kids is only $1,728 -- a marriage penalty of $3,284.
Are we talking about real tax relief or not? I get confused with the "but they don't pay taxes" part ... Sure it is a redistribution of wealth, but is there another reason to tax citizens?
posted by magullo at 5:06 AM on June 24, 2003
For example, two single parents with one child, each making about $13,000 annually, are each eligible for a credit of $2,506, or $5,012 total. But the combined credit for a married couple with two kids is only $1,728 -- a marriage penalty of $3,284.
Are we talking about real tax relief or not? I get confused with the "but they don't pay taxes" part ... Sure it is a redistribution of wealth, but is there another reason to tax citizens?
posted by magullo at 5:06 AM on June 24, 2003
Well in that group of 1 million we'll put Cheney. Lets just say he got back 2000000 of taxes he actually paid (assuming he pays taxes).
You could at least make an effort. Five seconds of googling got this :
"Vice President Dick Cheney and Lynne Cheney made $945,051 in 2002 and got a tax refund of $95,858. The Cheneys had paid $436,972 in taxes through withholding and estimated tax payments, when it turned out they owed $341,114, his office said."
FWIW.
posted by stavrosthewonderchicken at 5:42 AM on June 24, 2003
You could at least make an effort. Five seconds of googling got this :
"Vice President Dick Cheney and Lynne Cheney made $945,051 in 2002 and got a tax refund of $95,858. The Cheneys had paid $436,972 in taxes through withholding and estimated tax payments, when it turned out they owed $341,114, his office said."
FWIW.
posted by stavrosthewonderchicken at 5:42 AM on June 24, 2003
Mid: If you're poor, the refund goes back into your own community, helping those who live near you. A dollar back to you not only helps you, but helps the clerk at the grocery store and her children.
If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
Now I really don't understand. Is there any empirical evidence that rich people are more likely to spend their money on "foreign" goods than poor people? For example, a ton of the stuff at Wal-Mart and similar stores is imported. I buy a yacht from Germany, you buy a bunch of clothes made in China. Is there a difference?
Mind you, I'm all for soaking the rich -- I just don't understand that argument that poor people will more effectively distribute refund checks into the economy.
posted by Mid at 5:44 AM on June 24, 2003
If you're wealthy, the refund very likely does not go back into the community. Indeed, it may not even go back into America: it might purchase a German-built yacht, Italian-made loafers, or an off-shore investment bank.
Now I really don't understand. Is there any empirical evidence that rich people are more likely to spend their money on "foreign" goods than poor people? For example, a ton of the stuff at Wal-Mart and similar stores is imported. I buy a yacht from Germany, you buy a bunch of clothes made in China. Is there a difference?
Mind you, I'm all for soaking the rich -- I just don't understand that argument that poor people will more effectively distribute refund checks into the economy.
posted by Mid at 5:44 AM on June 24, 2003
Stavros - Not to mention the really, really swank salary and benefits Cheney will pull in after he leaves office and rejoins Halliburton which, under GW Bush, has been granted exclusive authority to rebuild and run Iraq's oil infrastructure........(forever?)
"Sales and property tax are a moot point. The Federal Government imposes no sales or property tax, if these taxes exist in your area they are imposed by State and Local Governments. If you believe that your state's sales and property taxes should be "progressive" then your beef is with the state and local governments. It has nothing to do with Federal Income Tax Cuts." - Steve_at_Linnwood
This argument is disengenuous at best. It has been the Republican program for over two decades to completely eliminate the progressive nature of government. The strategy towards this end has been to cut Federal aid to States for various progressive (redistributive) programs while, at the same time, cutting taxes and running up the Federal deficit. The ensuing budget squeeze locks Federal legislators into more cuts, in the future, in Federal outlays to the States.
This strategy was first coined during the Reagan Adminstrations. GW Bush is continuing the project. The end goal is exactly what Steve_at_Linnwood lays out: No Redistribution! Repeat this after me over, and over, and over again -
"Redistribution is unfair! redistribution is unfair!,
redistribution is unfair!........"
Only....
Wait a minute....didn't the endless corporate scandals of the last few years, Tyco, Enron, Worlcom and so on, which involved (among other things) the gutting of corporate worker retirement savings, amount to schemes which redistributed money upwards?
So much talk on the right is about the evil of government redistribution - but it's always the redistribution towards the poor which is supposed to be evil and unfair.
Well I have news for you Steve. The redistribution of wealth flows both downwards and upwards too. The GW Bush adminstration tends to make decisions which speed the redistribution of money upwards.
Isn't this the reason that corporations are donating an expected record campaign war chest for Bush in 2004?
Strange, you know - during the First Bush Administration, that of George Bush Sr., the Saving and Loan Scandal broke (Neil Bush, GW's brother, was the head of one of the early big banks to fail - "Silverado savings and Loan" - a 1 billion dollar loss).
The Savings and Loan scandal amounted to, quite simply, a mess of sweetheart loans, insider loan deals which amounted to, once again the redistribution of money - upwards. Loans were made for shady speculative real estate deals and sometimes the projects were never implemented or built. Sometimes they were just dumb projects. Then the real estate bubble of the late 1980's burst, and the whole thing came crashing down.
Guess who footed the bill? The Federal Government, to the tune of several hundred billion dollars. So it's strange to me that an even larger wave of corporate insider scandals, upwards wealth redistribution schemes, if you will, just happened to break as GW Bush came into office.
Redistribution of wealth upwards is just fine in Republican ideology, I think. It's the government programs which seek to redress, or slow this trend by sending money downwards to the poor - who Republicans seem to loath so much - which is called "evil and "unjust"
"People who do not pay any Federal Income Taxes should not receive money when Federal Income Tax rates are cut. That is not a tax cut, it is a redistribution of wealth." - Steve_at_Linnwood
Oh dear. That bad, bad word. Redistribution. But it's really a code word for "downwards wealth redistribution" because the other type, "upwards wealth redistribution" is never talked about.
I see nothing more in this sloganeering about the evils of "redistribution" - the downwards kind, that is - than a rhetorical cover for the perogatives of wealth and power in US society.
posted by troutfishing at 5:48 AM on June 24, 2003
"Sales and property tax are a moot point. The Federal Government imposes no sales or property tax, if these taxes exist in your area they are imposed by State and Local Governments. If you believe that your state's sales and property taxes should be "progressive" then your beef is with the state and local governments. It has nothing to do with Federal Income Tax Cuts." - Steve_at_Linnwood
This argument is disengenuous at best. It has been the Republican program for over two decades to completely eliminate the progressive nature of government. The strategy towards this end has been to cut Federal aid to States for various progressive (redistributive) programs while, at the same time, cutting taxes and running up the Federal deficit. The ensuing budget squeeze locks Federal legislators into more cuts, in the future, in Federal outlays to the States.
This strategy was first coined during the Reagan Adminstrations. GW Bush is continuing the project. The end goal is exactly what Steve_at_Linnwood lays out: No Redistribution! Repeat this after me over, and over, and over again -
"Redistribution is unfair! redistribution is unfair!,
redistribution is unfair!........"
Only....
Wait a minute....didn't the endless corporate scandals of the last few years, Tyco, Enron, Worlcom and so on, which involved (among other things) the gutting of corporate worker retirement savings, amount to schemes which redistributed money upwards?
So much talk on the right is about the evil of government redistribution - but it's always the redistribution towards the poor which is supposed to be evil and unfair.
Well I have news for you Steve. The redistribution of wealth flows both downwards and upwards too. The GW Bush adminstration tends to make decisions which speed the redistribution of money upwards.
Isn't this the reason that corporations are donating an expected record campaign war chest for Bush in 2004?
Strange, you know - during the First Bush Administration, that of George Bush Sr., the Saving and Loan Scandal broke (Neil Bush, GW's brother, was the head of one of the early big banks to fail - "Silverado savings and Loan" - a 1 billion dollar loss).
The Savings and Loan scandal amounted to, quite simply, a mess of sweetheart loans, insider loan deals which amounted to, once again the redistribution of money - upwards. Loans were made for shady speculative real estate deals and sometimes the projects were never implemented or built. Sometimes they were just dumb projects. Then the real estate bubble of the late 1980's burst, and the whole thing came crashing down.
Guess who footed the bill? The Federal Government, to the tune of several hundred billion dollars. So it's strange to me that an even larger wave of corporate insider scandals, upwards wealth redistribution schemes, if you will, just happened to break as GW Bush came into office.
Redistribution of wealth upwards is just fine in Republican ideology, I think. It's the government programs which seek to redress, or slow this trend by sending money downwards to the poor - who Republicans seem to loath so much - which is called "evil and "unjust"
"People who do not pay any Federal Income Taxes should not receive money when Federal Income Tax rates are cut. That is not a tax cut, it is a redistribution of wealth." - Steve_at_Linnwood
Oh dear. That bad, bad word. Redistribution. But it's really a code word for "downwards wealth redistribution" because the other type, "upwards wealth redistribution" is never talked about.
I see nothing more in this sloganeering about the evils of "redistribution" - the downwards kind, that is - than a rhetorical cover for the perogatives of wealth and power in US society.
posted by troutfishing at 5:48 AM on June 24, 2003
Mid - that argument can be expressed quite simply:
The rich, by definition, have lots of extra money and tend to have most of what they want - in terms of consumer goods, homes, cars, boats, planes, etc. They are simply less likely to spend their tax cut money. They are far more likely to invest it rather than spending it. Some of this investment will not be within the US economy at all.
The poor, on the other hand, are by definition always in a cash crunch, and always living with deferred real needs - things they need but lack the cash for.
And when they spend their tax refund money at Wal-Mart - even on consumer goods made in China, much of that money still stays within the US economy, to juice it along. This is so because only a fairly small amount of the purchase price of those foreign made goods purchased at Wal-Mart goes back to the foreign producer as profits. The greater share stays in the US.
But when the rich invest their tax refund dollars, it means less - especially right now. Money is not tight. Interest rates are at historic lows. The availability of (invested) money to be lent out - for loans to build new plants, buy/build homes, whatever - is not the problem in our current economy.
It's the lack of consumer demand.
This problem - of an economic slump caused by a lack of consumer demand - has been dealt with before in the US economy.
Henry Ford summed it up best when he noticed that, unless there was a demand for his cars, it was pointless for him to produce them. Ford realized that the best thing he could do to sell his cars was to promote the emergence of a middle class in the US which could afford to buy his cars.
To this end, he paid his factory workers wages which were thought to be extremely high for the time, but Ford's strategy worked very, very well. ( see; Fordism and Fordism: Gramsci's view )
But lately, Fordism has been breaking down: the US middle class has been little by little slipping towards poverty. The current fears of deflation have to do with this in a crucial way: Henry Ford's industrial-goods-buying, affluent middle class is shrinking.
posted by troutfishing at 6:14 AM on June 24, 2003
The rich, by definition, have lots of extra money and tend to have most of what they want - in terms of consumer goods, homes, cars, boats, planes, etc. They are simply less likely to spend their tax cut money. They are far more likely to invest it rather than spending it. Some of this investment will not be within the US economy at all.
The poor, on the other hand, are by definition always in a cash crunch, and always living with deferred real needs - things they need but lack the cash for.
And when they spend their tax refund money at Wal-Mart - even on consumer goods made in China, much of that money still stays within the US economy, to juice it along. This is so because only a fairly small amount of the purchase price of those foreign made goods purchased at Wal-Mart goes back to the foreign producer as profits. The greater share stays in the US.
But when the rich invest their tax refund dollars, it means less - especially right now. Money is not tight. Interest rates are at historic lows. The availability of (invested) money to be lent out - for loans to build new plants, buy/build homes, whatever - is not the problem in our current economy.
It's the lack of consumer demand.
This problem - of an economic slump caused by a lack of consumer demand - has been dealt with before in the US economy.
Henry Ford summed it up best when he noticed that, unless there was a demand for his cars, it was pointless for him to produce them. Ford realized that the best thing he could do to sell his cars was to promote the emergence of a middle class in the US which could afford to buy his cars.
To this end, he paid his factory workers wages which were thought to be extremely high for the time, but Ford's strategy worked very, very well. ( see; Fordism and Fordism: Gramsci's view )
But lately, Fordism has been breaking down: the US middle class has been little by little slipping towards poverty. The current fears of deflation have to do with this in a crucial way: Henry Ford's industrial-goods-buying, affluent middle class is shrinking.
posted by troutfishing at 6:14 AM on June 24, 2003
What troutfishing so eloquently said. Thank you troutfishing.
The Federal Government imposes no sales or property tax
Ever buy a gallon of gasoline? Tell me that's not a federal sales tax.
posted by nofundy at 6:21 AM on June 24, 2003
The Federal Government imposes no sales or property tax
Ever buy a gallon of gasoline? Tell me that's not a federal sales tax.
posted by nofundy at 6:21 AM on June 24, 2003
...crap in the toilet tanks (affectionately known as an "upper decker")
WTF?! Why would you conceive that such an act, much less even know a name for it?
I despair of civilization.
posted by five fresh fish at 8:42 AM on June 24, 2003
WTF?! Why would you conceive that such an act, much less even know a name for it?
I despair of civilization.
posted by five fresh fish at 8:42 AM on June 24, 2003
Now I really don't understand. Is there any empirical evidence that rich people are more likely to spend their money on "foreign" goods than poor people? For example, a ton of the stuff at Wal-Mart and similar stores is imported. I buy a yacht from Germany, you buy a bunch of clothes made in China. Is there a difference?
Mid, I think it's a fair question, and others have given fair answers, but I'm going to give it a shot. It depends on whether or not you think most loans are given by banks for the purposes of consumption or production. Consumer lending is a big business, and I think it's fairly safe to say that everyone under the sun is refinancing their mortgages these days, but I wonder how much new property is being bought. Little, I expect, from the slow way real estate moves in my state these days. That's the primary market for consumer lending... that and home add-ons and cars. Car sales aren't going terribly well, but people still buy them, so maybe there's still some moderate demand for consumer lending.
I think where banks often make their money these days, however, is in commercial/enterprise lending, and that's money spent on production which, in a depressed economy, may or may not be consumed. Given that risk, those likely to invest in production may likely be inclined to do it very cautiously if at all. And lenders are likely to lend carefully, considering the fact that inflation is very low (DE-flation is the threat), and interest rates are low as well....
posted by weston at 2:03 PM on June 24, 2003
Mid, I think it's a fair question, and others have given fair answers, but I'm going to give it a shot. It depends on whether or not you think most loans are given by banks for the purposes of consumption or production. Consumer lending is a big business, and I think it's fairly safe to say that everyone under the sun is refinancing their mortgages these days, but I wonder how much new property is being bought. Little, I expect, from the slow way real estate moves in my state these days. That's the primary market for consumer lending... that and home add-ons and cars. Car sales aren't going terribly well, but people still buy them, so maybe there's still some moderate demand for consumer lending.
I think where banks often make their money these days, however, is in commercial/enterprise lending, and that's money spent on production which, in a depressed economy, may or may not be consumed. Given that risk, those likely to invest in production may likely be inclined to do it very cautiously if at all. And lenders are likely to lend carefully, considering the fact that inflation is very low (DE-flation is the threat), and interest rates are low as well....
posted by weston at 2:03 PM on June 24, 2003
Let's don't mix up facts with our views about social policy.
Earned Income Credit is a refund of payroll taxes for people with children who meet a number of other requirements; you get one amount for child and a greater amount for more than one child; that's it. (You can get a few hundred dollars if you have no children.) The maximum income you can have is $34,178 if married filing jointly and the maximum EIC is $4,140 which is 12.5%. The per cent is higher for lower incomes.
Payroll taxes are a regressive tax. You pay your 7.65% (for Social Security and Medicare) and your employer matches it so the total is 15.3%. The reason I say regressive is that above a certain salary the SS parts cuts off and you just pay the smaller Medicare part.
The employer-matching part is really your money but by doing it this way, you only end up being double-taxed (paying income tax on the same income you already paid payroll tax on) on half of the payroll tax, not all of it.
Since the cut-off applies to an individual worker, in the case of a married couple where both spouses work, there may be a payroll marriage tax in that they may pay more payroll taxes than in the situation where only one spouse is an earner and the total is above the cut-off. (However the case of two workers may get more SS after they retire; hard to tell.)
All payroll taxes--except those returned as EIC--go into the same federal pot as federal income taxes and are used for current expenses with an IOU for the considerable amount that current payroll taxes exceed SS payouts written to the so-called Social Security Trust Fund.
Now to an opinion. Spending the excess payroll taxes for other items bothers me and I am concerned that the IOU won't be honored!
posted by Sixtieslibber at 5:50 PM on June 24, 2003
Earned Income Credit is a refund of payroll taxes for people with children who meet a number of other requirements; you get one amount for child and a greater amount for more than one child; that's it. (You can get a few hundred dollars if you have no children.) The maximum income you can have is $34,178 if married filing jointly and the maximum EIC is $4,140 which is 12.5%. The per cent is higher for lower incomes.
Payroll taxes are a regressive tax. You pay your 7.65% (for Social Security and Medicare) and your employer matches it so the total is 15.3%. The reason I say regressive is that above a certain salary the SS parts cuts off and you just pay the smaller Medicare part.
The employer-matching part is really your money but by doing it this way, you only end up being double-taxed (paying income tax on the same income you already paid payroll tax on) on half of the payroll tax, not all of it.
Since the cut-off applies to an individual worker, in the case of a married couple where both spouses work, there may be a payroll marriage tax in that they may pay more payroll taxes than in the situation where only one spouse is an earner and the total is above the cut-off. (However the case of two workers may get more SS after they retire; hard to tell.)
All payroll taxes--except those returned as EIC--go into the same federal pot as federal income taxes and are used for current expenses with an IOU for the considerable amount that current payroll taxes exceed SS payouts written to the so-called Social Security Trust Fund.
Now to an opinion. Spending the excess payroll taxes for other items bothers me and I am concerned that the IOU won't be honored!
posted by Sixtieslibber at 5:50 PM on June 24, 2003
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"Everyone who pays taxes—especially middle-income Americans—as tax rate reductions passed by Congress in 2001 are made effective immediately. Middle-income families will receive additional relief from accelerated reduction of the marriage penalty, a faster increase in the child tax credit, and immediate implementation of the new, lower 10 percent tax bracket. "
posted by the fire you left me at 2:45 PM on June 23, 2003