$550 billion more in tax cuts - wtf?
 

So, will $550 billion in tax cuts really 'spur a sagging economy'?

Something just seems a little screwy to me...

http://www.cnn.com/2003/ALLPOLITICS/...ush/index.html


WASHINGTON (CNN) -- President Bush used the backdrop of tax day Tuesday to press Congress to approve $550 billion or more in tax cuts he says will spur a sagging economy.

The tax cuts he has proposed would create 1.4 million new jobs by the end of 2004, he said Tuesday -- the deadline for Americans to file their federal income tax forms.

"The proposals I announced three months ago were designed to address specific weaknesses slowing down our economy and kept companies from hiring new workers," Bush said. "Those weaknesses remain today."

Bush's original plan for $726 billion in tax cuts -- half of which would have come from the elimination of taxes paid by shareholders on corporate dividends -- has been whittled down in the Republican-controlled Congress. The House voted to approve $550 billion in new cuts, while a Senate proposal would limit the package to $350 billion.

In speaking to small-business owners in the White House Rose Garden, Bush acknowledged for the first time that his full proposal is no longer on the table. But he urged Congress to avoid putting arbitrary limits on the tax bill, which he says would create jobs by boosting investment.

"We need tax relief totaling at least $550 billion to make sure our economy grows," he said.

Most Democrats argue that the cuts would do little for average taxpayers or to revive the economy. And some moderate Republicans in the Senate, like Sen. Olympia Snowe of Maine, have argued that a burgeoning budget deficit and the costs of the war in Iraq make new tax cuts unwise.

"Senator Snowe believes $350 billion reflects what may be the highest number in tax cuts a majority of the Senate will support," her spokesman, Dave Lackey, told CNN.

Lackey said the economy needs a short-term stimulus to grow, but Bush's plan amounts to "financing long-term tax changes with deficits. Those should be paid for."

The president's proposed budget shows a deficit of $304 billion for the 2004 fiscal year, not counting the costs of the war and occupation of Iraq. Bush said victory in Iraq is "certain, but not complete" and "desperate and dangerous elements" remained at large.

The president is trying to avoid the fate of his father, former President George H.W. Bush, who won a war in the Middle East only to be turned out of office in 1992 amid a sluggish economy.

Less than a month after a U.S.-led invasion force moved into Iraq, combat there has decreased dramatically. But the Federal Reserve said Tuesday that the war slowed U.S. economic activity more sharply than many analysts had expected, and unemployment was steady at 5.8 percent in March.

desperate hope for re-elaction

Its a fact that the liberals won't tell you about. Cutting tax rates = more money paid in taxes.

its a difficult concept to understand, thats why the liberals don't understand it.

"could" lead to more tax income... point to some examples that have worked please, US or G7 even.

Funny how Republicans are now Keynesians.
:1orglaugh

blah blah blah, everyone bitching

i feel there be a massive new tax system real soon

elimination of the income tax replaced by the Federal Sales tax
except on food,transportion, and housing

Not likely, consumption taxes are bad. Regressive...it affects poor people far greater than wealthier...(as a percentage of income spent etc...)

Those poor wealthy people! They sure need this tax break!

Someone get this Reagonomics moron out of the white house already.

When we were having a tax discussion on another thread I said that there's no documented proof that tax cuts directly affect the economy. You said post some proof or shut up.

Now you're saying that tax cuts=more revenue collected.


Post proof or shut up :thumbsup

well it works on Gas, Alcohol, and cigerettes.

currently each state has its own sales tax,

when i lived in Texas there was no state income tax, but there was a huge sales tax, plus there are other states that do the same. if it works on the state level why won't it work on the federal?

12 Clicks I am not sure to many people pay US Federal taxs, and if they do, it is not at the highest rate....

Think about the amount of tax revenue you need to replace. In addition you would drastically effect consumption habits. There is a reason why gas, alcohol and tobacco can be so heavily taxed.... most folks who use them have a fairly inelastic demand for those goods.

Bush calls it tax "relief". The part I like is how Republicans always try to explain were better off if they give the tax relief to big corporations instead of giving it to us.

12Clicks:
Its not hard to explain at all. The theory is corporations will use the extra money to create more jobs. The truth is their just as likely to use it to move offshore or give themselves bonuses.

Now if the Republicans only give tax relief to corporations that DO use it all to create jobs, that would be a different story. Until they do that, its a bunch of bullshit.

Ending double taxation of corporate dividends is probably a good long-term idea, but it won't stimulate the economy one bit. Just like the war in Iraq wasn't about Sept. 11, but was a good idea.

The Bush administration has a problem telling the truth, not all members of the American public are ignorant.

:1orglaugh :1orglaugh

I challenge you to bring forth the name of a SINGLE politician who understands economics whatsoever.

Kaynesians? Ha. FDR was an idiot when he listed to him. Now its just the "assumed" position.

Greenspan is an idiot who is worshiped as a demi god. Not a single senator understands a word he says. They approve his recommendations without 10s of thought.

its your money, you deserve to spend it how you want. If you prefer communism, head on out to china or cuba or ultra socialist countries like canada.

We are. I'm amazed at the limited understanding of economics on this board. *some* of you have had to have run a business before.
Corporation X makes 100million in profit if it pays NO tax at all, it has 100million extra dollars at the end of the yr to do something with. Now I'm sure those of you working out of your bedrooms think that what a corporation thinks is that it should give its CEO the 100million and piss on the little guy but that's just your tinfoil hat talking again. What they think is that by expanding their business using the 100million, they will make more money in the long run for the CEO and everyone else involved. So you're *way* more likely to have 100million in new business than you are to have 100million in new bonuses.
Now lets sat the corp is taxed at 39% (arbitrary number, I'm just using a personal tax rate #)
Now, the corp got to keep a little more than half their profit. They then have half as much to expand with. I'm sure you'll find a way to tell me that having 61 million will make a company expand faster than if they have 100million (because of your liberal thinking) but thats just not the case.

12Clicks:
Its not hard to explain at all. The theory is corporations will use the extra money to create more jobs. The truth is their just as likely to use it to move offshore or give themselves bonuses. [/B][/QUOTE]
No, this isn't the truth it's your theory


its bullshit to the people that don't know any better.
What is a corporation? is it a person that uses government services? no it isn't yet they are taxed.
If corporation X takes its 100million and gives it ALL to their evil CEO, the CEO will have to pay tax on the 100million. The logic that corporations should pay ANY tax is flawed and the real problem with our economy.
You need to tax the PRODUCT not the engine producing it. When you tax the engine, it makes it harder to expand. Which means fewer jobs, less productivity and just an overall less stable economy.

Oh, and to whoever it was saying show my proof. it aught to be elementary (well, for some it is) when you tax a corp on 100million, you make considerably less revenue than distributing that money out as wages and collecting tax on the wages, then collecting property tax on the houses that those wages buy, then collecting taxes on the cars that those wages buy, then on the every day goods and services those wages buy, then by taxing the wages used in building the cars and houses bought with the original wages, and so on and so on including taxing the interest the money earns in the bank.
When you take the money out at the corporate level, you take it out of the economic loop where it would be taxed over and over and over. bringing in more revenue.


shit, I just did all this typing and some of you dopes still won't get it. :321GFY

sales tax should be eliminated and added to income tax.

ontop of the 40% ppl already pay for taxes?

its not like taxes would increase...

sales taxes would be abolished...

That's a known economic fact, that has worked since the Roman empire or before. Anyone that has taken Economics101 knows that...

The real questions are:

A. Are they really cuts, or just "re-aligned" taxes. Many of the govt. tax cuts aren't really cuts, but just a fancy polical shell game. Cut taxas from Person or Corp. A and raise them for person or Corp. B... which doesn't work.

B. If they are real cuts, will they have a effect before next Nov. the bottom line is Poor Economy=No Re-election.

If people don't have food, shelter, jobs, etc.... They could give a fuck, how many wars you win, terrorists you capture or kill... Another basic economic fact... :winkwink:

And yet Canada has a consistently higher standard of living than the USA!

BAD SOCIALISTS!

:1orglaugh

For some of us, we only pay fedreral Income Taxes and there's no federal Sales tax, they are state taxes. So, how do you propose to collect this?


I'm all for a federal sales tax, instead of a income tax....


:thumbsup

What kind of crack are you smoking?

state sales taxes included. sales tax is complete bullshit. its a tax for the 50's not today.

??????? That makes no sense.... I don't pay state income tax, the state makes it's money from sales taxes... So, if you do away with sales tax, how does the state get it's money? Each state is automous when comes to taxation.

The point most analysists are making now is that that more corporate profits won't lead to more investment.

There just isn't any demand for more products. Instead it's likely the shareholders will want any extra profit to cover losses.

Basically the only thing which has kept the economic downturn from being much worse is the consumers who have basically kept on as long as they could, investments has dropped much more.

Many believe the projected future profits are wrong for a large amount of sectors which means that stocks are currently overvalued already. Another thing which suggests most investors will add the extra money to their piles and wait and see.

Basically the only thing these corporate tax cuts will do is help the investors get more money for future investments, which are not likely to come now.

I think creating more product demand by giving the consumers more money instead of the corporations had been the better way.

this makes as much sense as the rest of his dopey posts. :1orglaugh

when you pay your federal income taxes, provincial income taxes are added on.

with the internet around, sales taxes are bullshit.

12clicks, as I'm sure you know, the reasoning behind corporations being taxed is redistribution of income. The % that is taken from corporations, on top of employee salaries is to stabilize the 'weaker' side of the economy. Mind you, yes, I realize if a corporation could put 100 million back into itself, it would create jobs and expand, and then those new salaries would be taxed. The problem with that though is with technology, there is nothing making that 100 million go into more jobs -- could even end up taking away jobs.

Cheers,
Matt

Though I don't like this tax cut plan right now... the end of double taxation would be awesome. More of a stick it up your ass to middle class and poor but for those who run their own businesses - you'd get the increased limitation of liability in a C Corp without the increased taxes. :thumbsup

Good ole republicans -- give more to the rich

its called communism. we all know how well that worked.

what is the weaker side of the economy and how does it stabilize it?

This is only your opinion and I do not share it. Growth creates more jobs than no growth regardless of the field.

there are no taxes on food here.

Jeff, until both rich and poor pay the same % of their income to the tax man, your statements look silly.

The reason republicans can sell tax cuts for the wealthy to the public is because most people don't understand the way the tax code works.
The current tax rates for a single taxpayer are
0-6000 10%
6001-27950 15%
27951-67700 27%
67,701-141250 30%
141251-307050 35%
307051 and up 38.6%

Now, here's where the confusion is for most people, and the right wingers use this to their advantage.
If you make 400K a year, then you're in the 38.6% bracket. But you DO NOT PAY 38.6% on everything you made, you only pay 38.6% on the amount you made OVER the 307K threshhold.

In other words, let's say 12clicks makes 400K a year. (I don't care what he really makes, this is just for an example)
On his first 6K dollars, he only pays 10%, the same as the guy flipping burgers.
On the amount between 6K and 28K he only pays 15%, the same as the guy who only makes that much.

It goes on like this until you get to the highest bracket.
So when you cut tax rates for the lowest bracket, EVERYONE gets a tax cut. Because even 12clicks pays the lowest rate on his first 6K dollars a year.

When you cut tax rates for the middle bracket, everyone in the middle bracket AND EVERYONE ABOVE the middle bracket gets a tax break, because of the way the tiering system works.

When you cut tax rates for the highest bracket, ONLY the people in the highest bracket get a break.
When you cut tax rates for THE LOWEST bracket, EVERYONE gets a tax break.

So for the wealthy to say the tax system is unfair because you only pay 15% and they pay 39% is totally untrue. Its a distortion of the facts.
There are currently 6 income tax brackets, so if you cut rates for all of the brackets, then the wealthy get SIX TAX BREAKS, because they get the lower rate at every step along the way.

Also, the biggest drain on the paychecks of the bottom 3 tax brackets isn't income tax, its social security tax. (Which was raised by the Reagan administration in 1982 BTW)

There's a cap on social security tax. I don't know the exact number, but its between 80-90K this year.
So while the lower 3 brackets pay in thier 7.65% on everything they make, the guy who makes 400K a year only pays 7.65% on the first 80K or so, on the other 320K he pays no social security tax at all.
So once you hit that threshhold, your income tax rate goes from 27 to 30%, but you pay no social security tax, so in effect your rate dropped to 22.5%
And on the highest bracket, 38.6%, it drops to about 31.1%, when you're comparing the actual % of income you have to pay to the feds compared to the lower three brackets.

Booyah! I get sick to my stomach when I hear people who have given in to the fucking brainwashing about taxes and how much we need them for this or that. If people had any clue what low % of the tax dollars actually gets used instead of misused they'd fall over. Lazy minds don't want to study the system of this government or follow history so they give in to the rhetoric they see on the tube.

wow! lockstep liberalism. I love it!

let's say Lenny2 makes 50K a year. (I don't care what he really makes, this is just for an example). he would pay $10146.00 or about 21% of his income.
Now lets say someone else makes 400k he would pay $108855.77 or 28% of his income to the tax man.
Now to the liberal Lenny's of the world who hate success, this is perfectly logical. Once the the highest rate = the lowest rate, I would agree taxes should be cut across the board but until then, there is NOTHING wrong with giving those of us propping up the rest of you, a tax break.

the entire idea of paying a % of your income is offensive to me. why should someone pay 108k for the same services old Lenny2 gets for 10k?
When you go to the supermarket to buy food, do I pay 50.00 for a steak while lenny pays 5.00 just because I make 10 times as much? of course not.

Lenny, I'll wait for you to distort more facts. :1orglaugh

income tax should be illegal.

Then we wouldn't have enough weapons to beat countries like Iraq down when they get out of line.