NewsWeek: Why Your Tax Cut Doesn't Add Up

[BadGimp]

Why Your Tax Cut Doesn't Add Up
Behind the promises to save you money, a hidden agenda is at work, with a stealth tax to pay for it all

Bush has been open about each item he wants: lowering taxes on capital income, such as dividends and capital gains; creating two big new income-sheltering investment plans; eliminating the estate tax. But he's not been at all forthcoming about the ultimate effect of his program. If Bush gets what he wants, the income tax will become a misnomer—it will really be a salary tax. Almost all income taxes would come from paychecks—80 percent of income for most families, less than half for the top 1 percent. Meanwhile taxpayers receiving dividends, interest and capital gains, known collectively as investment income, would have a much lighter burden than salary earners—or maybe none at all. And here's the topper. In the name of preserving family farms and keeping small businesses in the family, Bush would eliminate the estate tax and create a new class of landed aristocrats who could inherit billions tax-free, invest the money, watch it compound tax-free and hand it down tax-free to their heirs.

By drastically favoring investment income over salary, fees and other "earned income," Bush would make it harder for people who start out with nothing to earn their way up the economic ladder, because they'd pay full taxes on almost everything they make, but he'd shower rewards on people who have already made it to the top rungs.

condt..

http://www.msnbc.msn.com/id/4660655/

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Is anyone out there paying attention?

[keopeli]

1. Clear, concise message on who Bush* wants to tax

Rich: Taxes are going way down!

Middle Class - Don't worry, your taxes aren't going up!

This is what Repubs are selling to their followers. Wow!

Good post, BadGimp

[truthisfreedom]

2. hmm. i wonder if anyone reads this stuff.

[The Land of the Free]

5. that is scary

to a youngster like myself

[Alpharetta]

6. his rich supporters read it and rub their hands in anticipation

his middle class supporters ignore it because it is discordant with their beliefs

[LittleApple81]

7. We do thanks to DUers who are on top of the news. Thanks. n/t

[LittleApple81]

3. answered the wrong thread. sorry.

[Warpy]

4. the left has paid attention for 40 years

...to the fact that the working and middle classes have been systematically looted from both ends, by a tax scheme that favors inherited and unearned income over that earned by the sweat of one's brow, and by shortsighted and stupid trade policies that shift good jobs overseas and depress wages for the very people they're looting to pay for their empire.

This cannot sustain itself. Consumer markets are already depressed, and it will only get worse. Since 2/3 of the economy is consumer driven, we'll be faced with a choice: either resume a progressive tax code that offers opportunity to all but is a disincentive to rabid greed, or accept the fact that we are just another failed republic under the heel of a permanent aristocracy.

[slinkerwink]

8. Dean was right...

*sigh*

[mzmolly]

11. Yes he was slinkerwink, about so many things....

It's becoming clearer by the day aint it? :hi:

[SpiralHawk]

9. Always remember the Republican motto:

"A rising tide lifts all yachts."

[phiddle]

10. The direct solution, winning the tax simplification debate for us:

1. Treat all income equally; no favored treatment for capital gains (current tax rate, 15%), interest or dividend income.
2. Apply the 15.2% FICA (SS-Medicare) tax to all income. (It is currently applied to only the first $88,000 of income.) This means, effectively, removing the cap.
3. Use the money thus gained to drastically increase the personal exemption, thus creating a much more progressive tax structure.

[Ready4Change]

12. Most peoples taxes vary so much, year to year...

That they don't actually KNOW if they're paying more or less, or why.

So, unless they expend special effort (you know, by THINKING) they just parrot their parties line, or that from their favorite news shows, papers, or radio hosts.

[BostonTeaParty04]

14. Most also, ignorantly, think a return of money is a give away to them!

They have NO IDEA that the $800 or $400 they get back just means that they DONATED too much to uncle sam over the year... that uncle sam earns interest on that money and then gives it back to them. They really think it's a govt payout.

I do taxes for a lot of people... and they get soooo excited when they are getting a chunk of change back. I try to explain: why not change your deductibles (esp if your financial life is so simply that you use the 1040EZ)? KEEP the money from the beginning. These are the responses:

"Oh, I might end up having to write a check to uncle sam"

"This is like a savings account" (with ZERO interest return. Oh yay!)

Brainwashed...

[NMDemDist2]

15. as a self employed person i write a check every quarter

that equals 25% of the net profit. It is so true that if the great masses actually had to write a check every month or quarter there would be a MASSIVE revolt!

[drfemoe]

13. PNACeconmics

... The argument that the Bush Administration employs to justify its devastating fiscal policy, and tax cuts that exponentially benefit Americans making over $1,000,000, is predicated on the idea that everyday Americans now have more money in their pockets in which to spend and prosper. This simply is not true. With increased property taxes, higher college tuitions, the rising cost of health care, and rising state taxes to cover funding negligence at the national level, there was no Bush tax cut for middle class Americans. This economic reality cannot be stressed enough. Even if Americans had more money in their pockets from tax breaks, the citizens of any nation will not jump start their economy through increased spending when they are in fear of losing their jobs, can't find work, suffer from catastrophic deficits, face devaluation of their currency, and must desperatley protect their savings for fear of bankruptcy. The convergence of all these factors creates dismal consumer confidence which is further eroded when security conditions in America steadily deteriorate under the Bush Administration's lack of "urgency" in counterterrorism policy.

What's your share of the Bush Tax cut? The facts speak for themselves. If you have an income of $50,000 per year your average federal tax cut would be $450. For a yearly income of $150,000 you receive a tax break of $2,500. However with a yearly income of $1,000,000 you are eligible for a tax cut of $85,000.

http://www.blogforamerica.com/archives/004156.html