Bush blinks, raises taxes...

[Mariner]

on teenagers with college funds. I'd guess this was an accident, but the Times jumped on it (http://www.nytimes.com/2006/05/21/washington/21tax.html?_r=1&th=&oref=slogin&emc=th&pagewanted=print)

The New York Times
May 21, 2006
Despite Pledge, Taxes Increase for Teenagers

By DAVID CAY JOHNSTON
The $69 billion tax cut bill that President Bush signed this week tripled tax rates for teenagers with college savings funds, despite Mr. Bush's 1999 pledge to veto any tax increase.

Under the new law, teenagers age 14 to 17 with investment income will now be taxed at the same rate as their parents, not at their own rates. Long-term capital gains and dividends that had been taxed at 5 percent will now be taxed at 15 percent. Interest that had been taxed at 10 percent will now be taxed at as much as 35 percent.

The increases, which are retroactive to the first day of the year, are expected to generate nearly $2.2 billion over 10 years, according to the Congressional Joint Committee on Taxation, which issues the official estimates.

Over all, the tax bill that Mr. Bush signed Wednesday reduces taxes by $69 billion.

Mr. Bush pledged in 1999 to veto any bill that raised taxes. In response to a question about the tax increase on teenagers in the new legislation, the White House issued a statement Friday that made no reference to the tax increase, but recounted the tax cuts the administration has sponsored and stated that President Bush had "reduced taxes on all people who pay income taxes."

Challenged on that point, the White House modified its statement 21 minutes later to say that Mr. Bush had "reduced taxes on virtually all people who pay income taxes."


* * *

Mariner

 

[Gunny]

LMAO. Typical lefty twisted thinking. Deleting a perk for the kiddies to bring them on line with an ALREADY EXISTING tax rate is raising taxes?

Puh-lease.

 

[insein]

Besides these are just spoiled rich kids winning life's lottery anyway. They need to give back to the downtrodden kids who are the have-nots of the world.

I dont think there should be any special tax brackets for anyone. Everyone pays the same rate. What should have happened was lowering the parents rate to the kids level but whatever. Its a non-issue.

 

[Mariner]

guys--the tax code needs massive simplification.

And I wish redistributive taxation were not a necessity. It does offend a sense of fairness to tax people who earn more at a higher rate. Problem is, if you don't, you get Brazil--a tiny ultra-wealthy class and a large underclass. Redistributive taxation is the only method remaining (now that we don't have tariffs against foreign trade, unionized labor is failing, and we are no longer giving land free to homesteaders) to maintain the existence of a middle class. Already, the top 10% of the population owns 100 times as much "stuff" per capita as the remaining 90% (and as you go up the income ladder, the proportions get more extreme), and Bush's policies are heightening this inequality, to robber-baron levels of the 1920's. I find the idea of an America where most of the wealth is concentrated in the hands of a small elite much more offensive than the idea of redistributive taxation.

Still, taking $2 billion from teens saving for college doesn't look so good when you've just given $8 billion to oil and gas companies--and it does constitute a flip-flop from Bush's "no new taxes" read-my-lips,

Mariner.

 

[Hobbit]

guys--the tax code needs massive simplification.

And I wish redistributive taxation were not a necessity. It does offend a sense of fairness to tax people who earn more at a higher rate. Problem is, if you don't, you get Brazil--a tiny ultra-wealthy class and a large underclass. Redistributive taxation is the only method remaining (now that we don't have tariffs against foreign trade, unionized labor is failing, and we are no longer giving land free to homesteaders) to maintain the existence of a middle class. Already, the top 10% of the population owns 100 times as much "stuff" per capita as the remaining 90% (and as you go up the income ladder, the proportions get more extreme), and Bush's policies are heightening this inequality, to robber-baron levels of the 1920's. I find the idea of an America where most of the wealth is concentrated in the hands of a small elite much more offensive than the idea of redistributive taxation.

Still, taking $2 billion from teens saving for college doesn't look so good when you've just given $8 billion to oil and gas companies--and it does constitute a flip-flop from Bush's "no new taxes" read-my-lips,

Mariner.

That's bullshit and you know it. The national income tax wasn't passed until 1914 and the United States had a healthy middle class long before that. Income redistribution is just Socialism's dirty little stepchild. It hurts the economy and lowers incentive for earning your own wealth, further hurting the economy. Then there's the corporate income tax which supposedly taxes those big, evil corporations we hear all about, but, since corporations cannot accumulate wealth, it translates into a 20-30% price increase in everything you buy. Then there's payroll taxes, also designed to take money from the 'rich' and give it to the 'poor.' What it ends up being is money taken from the 'poor' before it gets into their hands and is instead given to the government. This redistributive income tax is not a necessary evil. It's just evil.

 

[rtwngAvngr]

guys--the tax code needs massive simplification.

And I wish redistributive taxation were not a necessity. It does offend a sense of fairness to tax people who earn more at a higher rate. Problem is, if you don't, you get Brazil--a tiny ultra-wealthy class and a large underclass. Redistributive taxation is the only method remaining (now that we don't have tariffs against foreign trade, unionized labor is failing, and we are no longer giving land free to homesteaders) to maintain the existence of a middle class. Already, the top 10% of the population owns 100 times as much "stuff" per capita as the remaining 90% (and as you go up the income ladder, the proportions get more extreme), and Bush's policies are heightening this inequality, to robber-baron levels of the 1920's. I find the idea of an America where most of the wealth is concentrated in the hands of a small elite much more offensive than the idea of redistributive taxation.

Still, taking $2 billion from teens saving for college doesn't look so good when you've just given $8 billion to oil and gas companies--and it does constitute a flip-flop from Bush's "no new taxes" read-my-lips,

Mariner.

You're such a filthy liar, you pigdog son of a goatheaded she-mule

 

[CrimsonWhite]

You're such a filthy liar, you pigdog son of a goatheaded she-mule

That's mature.

 

[Mariner]

practice his invective because he's writing a screenplay.

I'm perfectly aware that the income tax was a 20th century invention. I never implied otherwise. Earlier (and/or in some cases, concurrently), the middle class was maintained by 1. the fact that we weren't populated by aristocrats, so there was a pretty good level playing field to begin with, 2. land grants and plentiful land, which created a level class of farmers, 3. tariffs on foreign goods, which protected American manufacturing from overseas competition, 4. the labor movement, which responded to the capitalist robber barons' exploitation of workers by uniting them, 5. anti-trust legislation, which made it harder for monopoly industries to exploit their workers, 6. worker safety laws, the minimum wage, and other protections.

This isn't a complete list, but it doesn't change my basic point: the middle class is sadly dependent on some protection, else it ceases to exist. If you have a counterexample--a country where a large middle class predominates, without some form of wealth redistribution, show it to me. Don't forget the massive--and often violent--wealth redistribution that was necessary to move us from aristocratic feudalism to the existence of any middle class at all.

Mariner.

 

[Rico]

practice his invective because he's writing a screenplay.

I'm perfectly aware that the income tax was a 20th century invention. I never implied otherwise. Earlier (and/or in some cases, concurrently), the middle class was maintained by 1. the fact that we weren't populated by aristocrats, so there was a pretty good level playing field to begin with, 2. land grants and plentiful land, which created a level class of farmers, 3. tariffs on foreign goods, which protected American manufacturing from overseas competition, 4. the labor movement, which responded to the capitalist robber barons' exploitation of workers by uniting them, 5. anti-trust legislation, which made it harder for monopoly industries to exploit their workers, 6. worker safety laws, the minimum wage, and other protections.

This isn't a complete list, but it doesn't change my basic point: the middle class is sadly dependent on some protection, else it ceases to exist. If you have a counterexample--a country where a large middle class predominates, without some form of wealth redistribution, show it to me. Don't forget the massive--and often violent--wealth redistribution that was necessary to move us from aristocratic feudalism to the existence of any middle class at all.

Mariner.

Absolute, unadulterated, hogwash. The middle clas exists because PEOPLE WORK FOR THEIR WEALTH. Jeez, socialists like yourself just never can seem to get it through their thick, ape like, skulls, that wealth is CREATED. Hard work creates wealth and in turn the classification of a middle class. If I, as anyone else in the "middle class", had to rely on the government we'd be up a creek. I pay out the wazooo in taxes for which I recieve damned little from the government other than defense.

You cannot support by argument or evidence that the middle class relies on government largesse for its existence. If anything the middle class is well aware that we pay the majority of the tax bill. You are misinformed, misguided, or simply ignorant. PERIOD!

 

[Annie]

practice his invective because he's writing a screenplay.

I'm perfectly aware that the income tax was a 20th century invention. I never implied otherwise. Earlier (and/or in some cases, concurrently), the middle class was maintained by 1. the fact that we weren't populated by aristocrats, so there was a pretty good level playing field to begin with,

Duh!

2. land grants and plentiful land, which created a level class of farmers,

Didn't 'create' farmers, rather provided incentives for them to move 'west', providing food for not only US industrialization, but most of the West in the larger sense. This was not to 'redistribute wealth' as much as to fulfill 'Manifest Destiny,' as it cut off any hope of foreign nations staking a claim, not to mention making it impossible for Native Americans to maintain their lifestyle. Not saying it was 'pretty' but very effective.

3. tariffs on foreign goods, which protected American manufacturing from overseas competition,

Considering the age of the US industries at the times that you are speaking, tariffs were not all that insufferable for other, more established nations. Today, with a few bad apple exceptions, we are the least restrictive market on earth.

4. the labor movement, which responded to the capitalist robber barons' exploitation of workers by uniting them,

Huh, they have never been a significant force in the US, even in their hayday.

5. anti-trust legislation, which made it harder for monopoly industries to exploit their workers,

Not middle class protection, rather nation protection. There never was a question of 'unrestricted capitalism, since a middle class was always a given. In spite of the yadda of the pro-capitalists, the nation was never for profit at the expense of the country, which is what would happen without anti-monopoly in most areas.

6. worker safety laws, the minimum wage, and other protections.

BS. None of those things have done diddly regarding the middle class, not even at the height of the industrial revolution. Zoning, building, and minimal safety laws protected the workers, that generated the wealth. Minimum wage accomplished zip. OSHA has been a waste of $$$.

This isn't a complete list, but it doesn't change my basic point: the middle class is sadly dependent on some protection, else it ceases to exist. If you have a counterexample--a country where a large middle class predominates, without some form of wealth redistribution, show it to me. Don't forget the massive--and often violent--wealth redistribution that was necessary to move us from aristocratic feudalism to the existence of any middle class at all.

Mariner.

 

[Mariner]

consider the fact that the current cutoff below which you get more in gov't services than you pay out is around $70K per year. Yes, the middle class pays the bulk of taxes, but not percentage-wise, and if they were forced to, they'd be impoverished fast. The evidence is straightforward--and not even the most conservative economist disagrees with it--that when you flatten taxes, you widen the gap between rich and poor, and squeeze the middle class. It's happening right now, and I don't think it's good for the country. Here in Massachusetts, it's all too easy to see the development of a leisure class--the parents have a few million in assets. The kids attend private schools and never rub shoulders with the riff-raff. On the flip side of the scale, the minimum wage can't support a family.

I'll challenge you again--show me a country where the middle class maintains its existence without some form of redistribution of wealth or protection.

Kathianne--I don't see where you made any point that affected my argument in any way. Calling something "BS" doesn't make it so. Consider the weekend--it was created by labor negotiation. Prior to that, the standard workweek was 6 12-hour days. Capitalism is the engine--I'm no socialist--but we have to acknowledge that it needs to be guided, else it runs roughshod over workers' rights, the environment, etc. You're seriously going to tell me that giving away trillions of dollars worth of land to homesteaders did not mightily increase the existence of the US middle class compared to what it would have been if that land were sold to, say, corporations?

Do either of you have some alternative explanation for the shrinking U.S. middle class? Workers have never been so productive, so by Rico's reasoning they ought to be wealthier than ever before--but in fact real wages are stagnating and nearly all the current recovery has gone into the pockets of investors and high executives. Corporations currently keep about twice as much of each worker's productivity as they did 30 years ago.

Mariner.

 

[T-Bor]

Preach it Mariner !!!!!

 

[5stringJeff]

consider the fact that the current cutoff below which you get more in gov't services than you pay out is around $70K per year.

 

[Mariner]

Sorry--I looked and looked, and can't find a link that gives the current figure. I've read the $70K figure a few times, but don't know if the exact current amount is higher or lower. Perhaps someone with better googling skills can find it.

Were you suspecting the break-even point was higher or lower than $70K?

Mariner.

 

[5stringJeff]

Sorry--I looked and looked, and can't find a link that gives the current figure. I've read the $70K figure a few times, but don't know if the exact current amount is higher or lower. Perhaps someone with better googling skills can find it.

Were you suspecting the break-even point was higher or lower than $70K?

Mariner.

I believe it's much lower. I make something like $50-55K per year, and I receive zero in direct government benefits. Now are you talking "government services" as in public education, roads, defense, etc. etc.? Then, maybe I could see your point.

 

[Mariner]

be the crossover point for all gov't services totalled, including roads, education, etc. So if you're making $55K, you're getting more in services than you're paying for. A flat tax would raise your taxes significantly.

Conceptually, I too wish that the tax code could be flatter. Practically, there simply doesn't seem to be any more fair way to maintain the existence of the middle and lower classes without impoverishing them. This only becomes more true as Bush's cuts for higher earners, combined with the pressure on lower earners from overseas workers, widens the gap between workers and their bosses. I saw a stat a few days ago showing that from 2000 to 2005, median CEO pay went from $750K to $2.5 million. Over the same period of time, of course, median worker pay and the minimum wage didn't budge. If we flattened the tax code further, workers would simply have even less, and CEOs and the expanding class of people who live on unearned wealth will have more.

It's already too close to two Americas. I spend plenty of time in public schools (I'm a physician working with Deaf children). The other day I attended a presentation at a very tony private school. Tuition there is over $30K per year. You couldn't believe the attitude of some of these kids, some of whom had some very famous last names: appallingy arrogant and condescending towards the "have nots," beyond belief.

We should at least be taxing unearned wealth (currently 10%) at the same rate as earned (15% on average). I hate that someone can sit by the pool and make more money in a week than the pool attendant makes in a year. It doesn't feel like America.

Mariner.

 

[5stringJeff]

be the crossover point for all gov't services totalled, including roads, education, etc. So if you're making $55K, you're getting more in services than you're paying for. A flat tax would raise your taxes significantly.

A flat tax might raise my tax burden, but it would lower my taxes. Big difference.

Conceptually, I too wish that the tax code could be flatter. Practically, there simply doesn't seem to be any more fair way to maintain the existence of the middle and lower classes without impoverishing them. This only becomes more true as Bush's cuts for higher earners, combined with the pressure on lower earners from overseas workers, widens the gap between workers and their bosses. I saw a stat a few days ago showing that from 2000 to 2005, median CEO pay went from $750K to $2.5 million. Over the same period of time, of course, median worker pay and the minimum wage didn't budge. If we flattened the tax code further, workers would simply have even less, and CEOs and the expanding class of people who live on unearned wealth will have more.

When income tax rates go down, tax receipts go up. This was proven in the 1960's, the 1980's, and again with the Bush tax cuts. If we went to a flat tax at, say, 17%, it would be a big tax cut for the rich and middle class (many of whom are taxed at 25%), but it would make everyone's tax burden equal. That, I feel is the only fair way to tax a society.

It's already too close to two Americas. I spend plenty of time in public schools (I'm a physician working with Deaf children). The other day I attended a presentation at a very tony private school. Tuition there is over $30K per year. You couldn't believe the attitude of some of these kids, some of whom had some very famous last names: appallingy arrogant and condescending towards the "have nots," beyond belief.

That's really too bad to hear, and while I don't personally know anyone in the upper classes of society, it sure does fit in with my "snobby-rich" stereotype!

We should at least be taxing unearned wealth (currently 10%) at the same rate as earned (15% on average). I hate that someone can sit by the pool and make more money in a week than the pool attendant makes in a year. It doesn't feel like America.

Mariner.

I'll have to think about that. I have always been in favor of eliminating capital gains taxes, but you present an interesting argument.

 

[Mariner]

pay 17% of your income in federal taxes? I'm not sure I understand your distinction between tax burden and tax rate... ? I've also read very conflicting things on the issue you mention about increased tax receipts when tax rates are lowered. I understand that there's less cheating, and some expansion of the economy, but on the other hand, if you take it to the logical extreme, lowering the tax rate to 0 would obviously lower revenues to 0 also.

Don't you think a good argument can also be made that the playing field that permits people to amass vast wealth in this country is based on the existence of a true middle class and numerous gov't services? Someone who owns a trucking business, for example, receives far more in gov't services than someone who doesn't own a car (in the form of free use of the Interstate Highway system without which his/her business could not exist). Would it be too much to argue that progressive taxation is a way of ensuring that the wealthy contribute to the sustenance of the ground in which their wealth grew?

Remember how Henry Ford was careful to pay his workers enough that they could afford to buy his cars?

With a flat tax, middle and lower income people are simply not able to raise families, have health insurance, buy homes, etc.

Consider the estate tax. It will affect only ~5000 families next year. Yet just 18 ultra-wealthy families have paid for $200,000,000 in lobbying to try to defeat it. Can you imagine, over $10,000,000 per family, simply to try to influence legislators to reduce their taxes?

Do you really want to grow a dynastic class of snobby, entitled rich people who inherited their money, pay less tax on it than you do on your income, and never work a day in their lives? That's where Bush is taking us. It simply seems wrong to me, when 46+ million Americans lack health insurance, when 600,000 American kids are homeless, and when 1 in 5 American children are raised in poverty. These kids did nothing wrong--why are they getting such a raw deal in such a wealthy country?

And I'm not speaking from personal gain--I'd save a ton of money if I only had to pay 17% of my income in taxes. I'm speaking from genuine concern for maintaining a fair society.

Mariner.

 

[Bullypulpit]

on teenagers with college funds. I'd guess this was an accident, but the Times jumped on it (http://www.nytimes.com/2006/05/21/washington/21tax.html?_r=1&th=&oref=slogin&emc=th&pagewanted=print)

The New York Times
May 21, 2006
Despite Pledge, Taxes Increase for Teenagers

By DAVID CAY JOHNSTON
The $69 billion tax cut bill that President Bush signed this week tripled tax rates for teenagers with college savings funds, despite Mr. Bush's 1999 pledge to veto any tax increase.

Under the new law, teenagers age 14 to 17 with investment income will now be taxed at the same rate as their parents, not at their own rates. Long-term capital gains and dividends that had been taxed at 5 percent will now be taxed at 15 percent. Interest that had been taxed at 10 percent will now be taxed at as much as 35 percent.

The increases, which are retroactive to the first day of the year, are expected to generate nearly $2.2 billion over 10 years, according to the Congressional Joint Committee on Taxation, which issues the official estimates.

Over all, the tax bill that Mr. Bush signed Wednesday reduces taxes by $69 billion.

Mr. Bush pledged in 1999 to veto any bill that raised taxes. In response to a question about the tax increase on teenagers in the new legislation, the White House issued a statement Friday that made no reference to the tax increase, but recounted the tax cuts the administration has sponsored and stated that President Bush had "reduced taxes on all people who pay income taxes."

Challenged on that point, the White House modified its statement 21 minutes later to say that Mr. Bush had "reduced taxes on virtually all people who pay income taxes."


* * *

Mariner

Given that the cost of college is rapidly becoming affordable only to the wealthy, it makes perfect sense, and is logically consistent with the Bush Administrations seeming intent to establish an American ruling class. Look out! Oligarchy, here we come!

 

[Annie]

Given that the cost of college is rapidly becoming affordable only to the wealthy, it makes perfect sense, and is logically consistent with the Bush Administrations seeming intent to establish an American ruling class. Look out! Oligarchy, here we come!

Bully, I don't know how you figure college is only affordable for the wealthy? I have 3 kids, all in or finished with college. Other than my paying for books once in awhile, sending them care packages, they have paid for school themselves, I couldn't do more.

The one that didn't receive scholarship money, finished with $12k in debt, which isn't all that much for a 22 year old with a degree. Will it help him delay marriage? Probably a year or two, which isn't a bad thing.

College is affordable and doable for any that are willing to do what it takes, just as it has been for most of the 20th and now 21st centuries.

Now, my friend has 2 children, between her and her husband their income is over 200k. Both kids chose private schools, worked little in college, none in high school. THE PARENTS have taken on over 120k in debt! Sorry, to me that was bad choices all the way around.