120 Days to Go Until the Largest Tax Hikes in US History

[peter12]

Originally Posted by Vulcan

So let me guess, you're a Palin supporter who has no problem concentrating even more of the wealth among the top few.

Nothing that he said would indicate your accusation is true and you have yet to answer his question. How do small business owners have any incentive to innovate and take risks when the government will tax the heck out of them?

[VladtheImpaler]

Originally Posted by peter12

Nothing that he said would indicate your accusation is true and you have yet to answer his question. How do small business owners have any incentive to innovate and take risks when the government will tax the heck out of them?

What does he care as long as his cheque comes every two weeks?

[troutman]

Originally Posted by peter12

Nothing that he said would indicate your accusation is true and you have yet to answer his question. How do small business owners have any incentive to innovate and take risks when the government will tax the heck out of them?

What do small business owners in Scandanavia and Switzerland do? Are they any less innovative or any more risk adverse?

Maybe we need to define what "tax the heck out of them means"? How much is that?

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

[oilyfan]

Even the biggest proponent of the free market and smaller government, Alan Greenspan says that lower taxes are better, but not using borrowed money.

The tax cuts were only put in place by Bush (other than idealogical reasons, which I will ignore) because Alan supported them. Economists were predicting surpluses in the US economy for many years to come. This would have caused a "distortion" so it was decided that the cuts would be a good idea.

Obviously the situation has changed now.

There are many arguments for leaving the tax cuts in place, I will give the rebuttal to them:

- Economic recovery will enable the US to pay down their debt: The consensus is that the economic recovery is very far away, and the US is building (or has already built) unsustainable debt levels in the meantime

- The Reagan theory of "starving big government" by continually reducing revenues: We can see that this hasn't worked, especially since the abolishment of the policy to reduce government spending by the same amount as any tax cut implemented

- The singular and most common argument, that it will stunt the recovery: you cannot have a recovery so heavily based on borrowed money, it could and will come and bite you in the ass. The devaluation of the US dollar is the most obvious consequence.

[Vulcan]

Originally Posted by VladtheImpaler

What does he care as long as his cheque comes every two weeks?

I write a dissenting opinion, and the best you have is to throw insults.

[Vulcan]

Originally Posted by peter12

Nothing that he said would indicate your accusation is true and you have yet to answer his question. How do small business owners have any incentive to innovate and take risks when the government will tax the heck out of them?

and nothing I said would indicate his accusation is true and so I threw it back at him. What did small business owners do before this tax break? What do they do in other countries?
The right is crying that we can't pay for Obama's incentives but as soon as the opportunity to bring the taxes back in line occurs they scream like little girls.

[VladtheImpaler]

Originally Posted by Vulcan

I write a dissenting opinion, and the best you have is to throw insults.

I believe you are in a glass house. I have yet to see an opinion - what does "Ha, the old trickle down theory, sounds good if you can outlaw greed otherwise it's a farce." even mean??? I said the middle class pay all the taxes and you responded with that. Then you attacked someone else without answering their question either. So, what the fata are you trying to say? Based on what you had written so far, I naturally assumed you had a sense of entitlement, commonly notable in our eastern provinces.

[Vulcan]

Originally Posted by VladtheImpaler

I believe you are in a glass house. I have yet to see an opinion - what does "Ha, the old trickle down theory, sounds good if you can outlaw greed otherwise it's a farce." even mean??? I said the middle class pay all the taxes and you responded with that. Then you attacked someone else without answering their question either. So, what the fata are you trying to say? Based on what you had written so far, I naturally assumed you had a sense of entitlement, commonly notable in our eastern provinces.

From what I understand this only affects those making over $250,000/year, so how does that make the middle class pay more taxes?

[Calgaryborn]

Originally Posted by oilyfan

Even the biggest proponent of the free market and smaller government, Alan Greenspan says that lower taxes are better, but not using borrowed money.

The tax cuts were only put in place by Bush (other than idealogical reasons, which I will ignore) because Alan supported them. Economists were predicting surpluses in the US economy for many years to come. This would have caused a "distortion" so it was decided that the cuts would be a good idea.

Obviously the situation has changed now.

There are many arguments for leaving the tax cuts in place, I will give the rebuttal to them:

- Economic recovery will enable the US to pay down their debt: The consensus is that the economic recovery is very far away, and the US is building (or has already built) unsustainable debt levels in the meantime

- The Reagan theory of "starving big government" by continually reducing revenues: We can see that this hasn't worked, especially since the abolishment of the policy to reduce government spending by the same amount as any tax cut implemented

- The singular and most common argument, that it will stunt the recovery: you cannot have a recovery so heavily based on borrowed money, it could and will come and bite you in the ass. The devaluation of the US dollar is the most obvious consequence.

But the answer has got to be for the Federal Government to make better history by shrinking to line up with their current revenue.

At the same time they should reign in the Enviromental Protection Agency. Congress and the President need to be deciding what needs to be protected from industry and where the wealth industry produces is worth the environmental loss: Not unelected career environmentalists.

[VladtheImpaler]

Originally Posted by Vulcan

From what I understand this only affects those making over $250,000/year, so how does that make the middle class pay more taxes?

The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Quoted from the OP...

[Flames Fan, Ph.D.]

Originally Posted by VladtheImpaler

[LEFT][COLOR=#000000]The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).

Do you have a source for this?

[opendoor]

Originally Posted by Flames Fan, Ph.D.

Do you have a source for this?

That was the cut in 2001, so when it expires it returns to its previous level:

http://en.wikipedia.org/wiki/Economi...on_Act_of_2001

[Flames Fan, Ph.D.]

Originally Posted by opendoor

That was the cut in 2001, so when it expires it returns to its previous level:

http://en.wikipedia.org/wiki/Economi...on_Act_of_2001

sorry, i was unclear

I was questioning the "this is also the rate at which two-thirds of small business profits are taxed" part of the post.

Edit: No reason to play coy. The impaler's conjecture is demonstrably false, but I was just curious about the source.

Anyways, here is the table:

http://www.taxpolicycenter.org/numbe...83&DocTypeID=7

Note that this captures Schedule C (for self-employment or sole proprietorships), Schedule E (for S corporations) and schedule F (for farms). Only about 2% of all of these are impacted in a situation where the tax cuts for the highest bracket are rescinded.

[Jason14h]

Suppose that every day, ten men go out for beer and the bill for all
ten comes to $100.
If they paid their bill the way we pay our taxes, it would go
something like this:

The first (poor) would pay nothing.
The second (poor) would pay nothing.
The third (poor) would pay nothing.
the fourth (poor) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The sev enth would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the
arrangement, until one day, the owner threw them a curve. 'Since you
are all such good customers, he said, I'm going to reduce the cost of your
daily beer by $20. Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so
the first four men were unaffected. They would still drink for free.
But what about the other six men - the paying customers?
How could they divide the $20 windfall so that everyone would get his
'fair share?'
They realized that $20 divided by six is $3.33.
But if they subtracted that from everybody's share, then the fifth man
and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the
amounts each should pay

And so:

The first would still pay nothing.
The second would still pay nothing.
The third would still pay nothing.
The fourth would still pay nothing.
The fifth man now paid nothing (100% savings) The sixth now paid $2
instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before.
And the first four continued to drink for free.
But once outside the restaurant the men began to compare their
savings.

I only got a dollar out of the $20,'declared the sixth man.
He pointed to the tenth man,' but he got $10!'
'Y eah, that's right,' exclaimed the fifth man. I only saved a
dollar,too.It's unfair that he got ten times more than I!' That's true!!'
shouted the seventh man.
'Why should he get $10 back when I got only two?
The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get
anything at all. The system exploits the poor!' The nine men surrounded the tenth and beat him up.The next night the tenth man didn't show up for drinks, so the nine
satdown and had beers without him. But when it came time to pay the bill,
they discovered something important.

They didn't have enough money between all of them for even half of the
bill!

And that, boys and girls, journalists and college professors, is how
our tax system works.The people who pay the highest taxes get the most benefit from a tax reduction.Tax them too much, attack them for being wealthy, and they just may
not show up anymore.

In fact, they might start drinking overseas where the atmosphere issomewhat friendlier.
.

[opendoor]

Originally Posted by Calgaryborn

But the answer has got to be for the Federal Government to make better history by shrinking to line up with their current revenue.

At the same time they should reign in the Enviromental Protection Agency. Congress and the President need to be deciding what needs to be protected from industry and where the wealth industry produces is worth the environmental loss: Not unelected career environmentalists.

In my experience, most people (other than libertarians) aren't actually willing to accept the lower entitlements of a much smaller federal government. Ideologically they often support smaller government, but when it actually begins to affect them directly or they're forced to pay for things out of pocket that they feel entitled to, things often change. Obviously that's a huge generalization, but if Americans actually had the stomach for massive cuts in government spending and the things that come along with it, things would have been done. Instead they're willing to borrow their grandchildren's money to prop their standard of living up temporarily.

Ultimately, spending should have been reigned in along with the tax cuts in 2001 but they weren't, the federal government became even more bloated on the backs of huge deficits. In fact, the whole reason the tax cuts expire is because of the PAYGO law in the US at the time where you could not enact any permanent measures that would greatly increase budget deficits. In order to allow massive tax cuts without any cuts in spending, they had to make them temporary.

It's pretty simple, if you're going to cut the government's income, you must also cut its expenditures. GWB and congress did only one of those things, the much easier one I might add. They refused to actually tackle the real problems and the successive governments are now only delaying the pain that years (and eventually decades) of deficit spending will cause.

[VladtheImpaler]

Originally Posted by Flames Fan, Ph.D.

sorry, i was unclear

I was questioning the "this is also the rate at which two-thirds of small business profits are taxed" part of the post.

Edit: No reason to play coy. The impaler's conjecture is demonstrably false, but I was just curious about the source.

Anyways, here is the table:

http://www.taxpolicycenter.org/numbe...83&DocTypeID=7

Note that this captures Schedule C (for self-employment or sole proprietorships), Schedule E (for S corporations) and schedule F (for farms). Only about 2% of all of these are impacted in a situation where the tax cuts for the highest bracket are rescinded.

That whole post was pasted entirely from the OP article - there is no conjecture on my part. So, not sure what you are yammering about.

[Flames Fan, Ph.D.]

Originally Posted by VladtheImpaler

That whole post was pasted entirely from the OP article - there is no conjecture on my part. So, not sure what you are yammering about.

The next time you cut and paste it, I would recommend removing the false item about the bracket that 2/3rds of small businesses fall into

[VladtheImpaler]

Originally Posted by Flames Fan, Ph.D.

The next time you cut and paste it, I would recommend removing the false item about the bracket that 2/3rds of small businesses fall into

I didn't write the OP or the article, so why would I edit it? BTW, I am not arguing one way or the other on this issue - I just wanted to point out that Vulcan's "tax the rich" attitude is naive and silly.

[Mike F]

Originally Posted by Jason14h

And that, boys and girls, journalists and college professors, is how our tax system works.The people who pay the highest taxes get the most benefit from a tax reduction.Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas where the atmosphere issomewhat friendlier.

Where are they going to go?

This is from Wikipedia, so take it for what it's worth, but it's illustrative:

[VladtheImpaler]

Originally Posted by Mike F

Where are they going to go?

Looks like: