Tax Breaks

[Baiter]

An interesting topic, which tends to fall along party lines.  Here's the brief summary, keeping to the individuals effects:

Obama (note "rich" is defined as > $250k household income)

The Problem

Increasing Debt: Under President Bush, the federal debt has increased from $5.7 trillion to $8.8 trillion, an increase of more than 50 percent.

Irresponsible Tax Cuts: President Bush's policies of giving tax breaks for the wealthy will cost the nation over $2.3 trillion by the time they expire in 2009.

Barack Obama's Plan

    * Reverse Bush Tax Cuts for the Wealthy: Obama will protect tax cuts for poor and middle class families, but he will reverse most of the Bush tax cuts for the wealthiest taxpayers.

McCain ("It's not the job of the government to define who is rich")

McCain's plan would cater to wealthy taxpayers and corporations by extending and expanding President Bush's tax cuts, slashing corporate taxes and weakening the estate tax, but it would also aid taxpayers across the board by making the full Bush cuts permanent.

Under his proposals, McCain would make all the 2001 and 2003 Bush tax cuts permanent. That would keep the two highest tax brackets at their current rates of 33% and 35% -- rather than reverting to 36% and 39.6%, where they were during the Clinton administration.

"the Tax Policy Center has warned that both plans -- coupled with the candidates' high-cost healthcare proposals -- would balloon the $9.6-trillion national debt. The center's analysis reported that McCain's tax proposals would add $5 trillion to the debt over the next 10 years, while Obama's would add $3.6 trillion."

Interesting stuff.  What it boils down to is how to get the deficit in check.  The trickle-down economics that McCain is continuing the Bush tax cuts that obviously haven't trickled down (or else the deficit wouldn't have risen 50% in the past 8 years), and Obama's goal is to flat out raise taxes on the "rich" to make up for deficits.  It is acknowledged that the capital gains cut does work, but the rest (especially McCain's corporate tax breaks) is the real debate.

[TheBatman]

Taxes suck. I wonder why everyone feels they have to take a Bush all or nothing approach to taxes, and can't meet somewhere in the middle?  Can't ANYONE think of a plan to make MOST of the people tolerable of it?  It seems it's either fully tilted so the wealthy (mostly Republican) people pay the lion's share, or give the wealthy lower taxes (like currently) and the middle class and poorer people are SUPPOSED to be paying their fair share, although that doesn't seem to work, since they don't have any money to pay. Those of the latter that DO pay have a very difficult time paying anything extra.  Why can't anyone find a happy medium, like 20% for EVERYONE? ...someone educate me.  I guess the easy answer is there just isn't enough money any other way to run the country and keep spending all the money the government spends.

The elections really seem to be rich (Republican) vs. poor (Democrat), whether people want to admit it or not.  I wish the people who vote Republican and LOVE Bush should just admit it.  It's OK to not want to give up your money, I really understand that.  If I had a decision to vote for someone who would cost me, say an additional $25K a year in taxes (just pissing money out the window), which equates to $100K over four years...hell yeah, I'd have to admit I'd think long and hard about voting to give away $100K.  That's a lot of pins!  I'm not sure how fair it is that the rich HAVE to carry the burden, so I can understand them voting Republican for no other reason than lower taxes.  And, let's face it, that's basically ALL Bush has done, and he did it RIGHT away within a few months into his presidency, and probably the main reason most vote that way. Maybe not ALL Republicans, but I have to believe that's a main factor.


But...the thing that really pisses me off is how (arguably) there was no debt when Bushy took over...not enough money for all the programs needed in the country, but somehow there's plenty of money for a war. So, what is it, $20 BILLION a month in Iraq?   OK,  where the HELL is all THAT money being spent?  Are they paying all our soldiers (138,000 of them) all that money (WHATEVER they get paid, it's not enough...anyone know?), or are they shooting THAT many bullets? I think not.  Maybe it's the price of gas for the tanks.

Which leads to...let's go with the 20 billion/month figure.  The 2 biggest effects on the economy from the war I see are 1) the bill from Haliburton and 2) the increase for gas, and how the war has increased the price of gas SOMEHOW after WE took over one of the gas producing countries.  So, I see lots of money that coincidentally just happens to benefit the president and vice president's pocket books, since they are both heavily invested in both of these industries.  Fortunately (for them) we HAD to go to war and good thing for them at least the two of THEM benefit from it. No big hurry to set a deadline or anything.  I'm sure NOBODY can make any connections here...what the hell is up with that? 

The interesting thing is it seems BOTH Bush's had a total disregard for the budget balancing, and spent like crazy (each with their own Iraq war) and left the country in a deficit.  After Bush 41, Clinton comes in and whether you argue it or not got the national debt back in check.  Bush 43 comes in and fucks it all up WAY to hell, who cares?  HE doesn't have to worry about fixing it.  People wonder why they have to pay taxes when leaders have no concept or care of what they spend.

So, no money to take care of the rest of the people in the country for some reason.  Just keep the taxes low.  Let the next president worry about it.

[sirmatt]

The trickle-down economics that McCain is continuing the Bush tax cuts that obviously haven't trickled down (or else the deficit wouldn't have risen 50% in the past 8 years)

Dude....dude...duuuuuuuude....WTF are you talking about? The national deficit has little to nothing to do with trickle-down.

Alright...I am a neutral dude. I think a good point is a good point - which is why...

I want to take a second...

*** To throw a party for Jeff's awesome response! Nice work, bro. Your tone is appreciated and needed. Even though I don't agree with everything, U DA MAN!!! ***

- alright, back to the reply:

I am a neutral dude...and you can go to just about any economics department in any major university and realize that trickle down is quite real...the problem with it is it's not always instantaneous nor will it smack anyone in the face. It's subtle but definitely measurable.

Here's the thing:

The only way a rich dude is going to let money sit doing nothing is...well, he won't. That's just the thing.

He will spend it on manicuring his immaculate garden, which goes to Bill the gardner and Juan his assistant.

He will spend it on a new Maserati - which goes to Raphael it's maker as well as to the companies that supplied the metal parts, who will in turn pay the metal miners, etc.

More than any of that, though, he will INVEST it. That big scary thing rich people do with the majority of their money.

In other words, he will hand over his money to a company who will in turn buy computers with it (which goes to dell, it's sales reps, it's line workers, etc.), they will buy post-its (which benefits 3M factory workers), printers (more factory workers),

Trickle down INTUITIVELY works. It's why you and I draw paychecks every day.

I work in transportation. I get paid because a rum company wants to move a product from point a to point b so they can get paid for the sugarcane they bought from a farmer and turned into legal drugs to sell to Washington DC (who btw drinks a shitload, I can tell you for a fact). I am sure you could construct your own scenario.

But it's a very intuitive concept. It's just not nearly as immediate as "here's a check for YOU! All your problems are solved! (or are they?)"

- Matt

[sirmatt]

Oh and Jeff - Clinton was pushed mightily by the Republican congress for budget balancing. Well, they pushed one another. It was regarded as one of the great *bi*-partisan accomplishments, my friend. It jus' weren't Clinton's doin' one-hunnerd percent.

[TheBatman]

Yeah,

I will submit that a president basically either OK's or vetoes what's put on his desk, THEY aren't the ones that actually write the bills (I don't know if any of them are actually smart enough). So yeah, Clinton agreed to what congress fed him.   Apparently SOMETHING had to change though, so congress had to do SOMETHING to get out of the Bush 41 mess.  It makes you wonder what all the debate is over the "experience" needed to run the county.  WTF... I've been reading proposed bills on the ballots every time I vote all my life also.  If you like it you vote for it, you don't like it you don't vote for it.  Wow.  Maybe I have enough "experience" to be president also.

[Chris]

As long as we vote for Democrats and Republicans, the deficit spending will continue to insane levels. They know exactly what they're doing, and why should they care? They'll be out of office when it all comes down. Since I'm in my early 20's, I can't help but get upset that the boomers are setting my generation up for an upcoming budget crisis. And if they think my generation is going to help bail them out of the social security mess they created, they have another thing coming.

If only there was something on our budget that could be cut in order to bring down the deficit spending... if only...


I'm all for a flat tax, but I also think we should be able to choose where the money goes. I feel like I should be able to choose whether my money goes to education or military, etc. and maybe we can start making our tax dollars work for us, instead of flushing it down the toilet on billion dollar airplanes because a lobbyist group says they should.

As far as tax cuts, I don't think anybody deserves one. The economy isn't THAT BAD. We should stop whining about our broken tax system and start fighting for tax reform. Problem is, people put their interests and party interests in front of the country's interests. Obama and McCain know this, and they're expoiting it. They don't care they're inflating the debt, because they know we don't care. We just want our free money.

[TheBatman]

Chris,

thanks for that pie diagram, it does help explain things. However, I notice it's from 1999, so NOW it might even be MORE out of whack, and the military HALF (!!!) of the budget might have even overtaken MORE of the pie by now.  Maybe it's less, but I doubt it.  It does explain in layman's terms why there's not enough money to go around for things in THIS country.  I'm all in favor for a big decrease in that military budget to help fix some of the other areas in need....but also agree why HAVE to have a military budget (although perhaps not so much, especially if there's not a war).  I guess this is the big debate and difference back and forth between Republican and Democrat thinking.  People vote for what they think is more important.  I think they're ALL important and not an easy thing to figure out, take away from one area to benefit another isn't an easy decision to make.  But for those against Bush's war and spendings it's an easier decision where to get more money from.

[Baiter]

The national deficit has little to nothing to do with trickle-down.

I am a neutral dude...and you can go to just about any economics department in any major university and realize that trickle down is quite real...the problem with it is it's not always instantaneous nor will it smack anyone in the face. It's subtle but definitely measurable.

To respond to your trickle-down example, while the rich spend some money and invest the rest, poor people spend all their money.  Proof of the effectiveness of what the poor spend is in Bush's recent stimulus package - let's send a check to every man woman or child, regardless if they paid taxes, to give a bump to the economy.  If trickle-down was the better way to stimulate the economy he should have written bigger checks to the rich.  I have to assume both contribute equally to the economy.

Going back a little, the reason Clinton had a balanced budget because of the tax windfalls of a crazy internet economy that crashed about a year before Bush took office.  Bush inherited a budget based on the tax economy that assumed that craziness would continue.  He decided to both cut taxes and declare war on a country that has cost us over $500 billion so far, so it's not hard to see why those 3 factors led us into a deficit increase of $3.1 trillion.  Bush was in control of 2 of those 3 factors, and frankly didn't do a good job as a financial conservative.

So now we have to elect a new President that needs to fix the problems.  How do you do it?  Cut spending and/or increase taxes.  There's no other choice.  Obama wants to raise taxes on the top 1.5% of the US population, leaving 98.5% of us alone.  McCain has professed to leave taxes alone, and continue the war.  In addition both have to deal with a recession brought on by the after-effects of another bubble - real estate, which is why it is projected neither will reduce the deficit but that Obama will do a better job.

[Chris]

Good analysis of the situation. This is what makes this election so bizarre. We have a Republican candidate that has vowed to continue massive deficit spending, and we have a Democratic candidate who also wants to increase the deficit, just not quite as much. Whatever happened to the party of fiscal conservatism? I think this all started with everyone's neo-conservative hero, Reagan. (let the flamewar commence)

If a presidential candidate says he wants to increase taxes, he/she will not be elected. I guess the problem is the American People don't really understand that we can't just run crazy with Uncle Sam's credit card; at some point we have to at least pretend to try to pay it off, or we lose trust in the global economy. Just look at the housing crash; we all need to take a Finance 101 class.

A large defense budget is definitely necessary these days (but I don't think even close to half our country's budget should be), but really, why was our budget over 50% post-9/11? All those billions of dollars, and look what happened: NORAD and government intelligence had one massive screwup after another. Seriously, how the hell do you let a group of amateur rogue terrorists drift a jet out of airspace and hit buildings not once, but three times?

Your tax dollars at work.

[Baiter]

Here's a nice side-by-side comparison of each candidate's tax plans as they affect individuals (you).  One interesting note is that under Obama it doesn't show any increase in taxes unless household income is > $600k.  Also another relevant statistic is that households with less than $32k only account for around 3% of income tax revenues, so any tax cuts under there just don't matter in the big picture.

http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html