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New Tax Cut for 226,000 Americans(29 posts)

New Tax Cut for 226,000 AmericansCARBON110
Apr 22, 2003 11:13 AM
The Presidents NEW tax cut will benifit 226,000 Americans only. Its a GIGANTIC tax cut after our last GIGANTIC tax cut. Who the hell is he kidding? Don't tell me GW gives two sh1ts about our countrys economy or the welfare of its people. What a block Head to even propose this, but with apporval numbers through the roof after "" successful war "" taking the stage of every frickn news station, don't expect to hear anything about it. O by the way, the largest oil contract ever for the "" New Iraq "" was given to non other then a USA company who is DICK Cheeneys former employer. I thought it was "trickle down" economics not "flush up" economics. Can't wait for more bright ideas from this fabled administration. I have lost my respect for Yale as well. If GW can graduate from Yale, anyone can. He is the most inarticulate man ever to be on TV since silent movies.
How could it be that bad then?TJeanloz
Apr 22, 2003 11:22 AM
If a tax cut benefits only 226,000 people, how can it be gigantic? Unless those 226,000 people are already paying way more than everybody else. I actually have no idea which tax cut you are specifically referring to, given the complete lack of objectivity in your post. Furthermore, Haliburton doesn't deal in oil; they are an oil field services company - it was a services, not an oil contract.

I don't even know why I'm responding to that drivel...
Address the issueCARBON110
Apr 22, 2003 11:36 AM
First off I will be amazed if you are one of those 226,000 people and you are actually going to attempt and support an idea like this. The logic is that the 226k are the most wealthy people in the nation. They there for pay the most taxes. So we give them , I think it was 600Million in tax cuts or was it a cool Billion now proposed ( I will double check ) and they will spend that money on whatever. So we are giving people who already have most of the wealth, more wealth for them to spend to boost the economy. More then likely they will just bank it. Regardless of whether or not Haliburton deals in oil its in the industry, and its unacceptable for a Vice Pres of the USA to give his former employer the biggest contract for that part of the industry. Why don't you address the issue? Why the hell are we having a tax cut that doesnt support the poor and middle class incomes that are struggling to remain so after the market became the Titanic of the new millenium?
Even if we just bank it...TJeanloz
Apr 22, 2003 11:51 AM
You are WAY off on your facts. The problem here is that we pay taxes as a percentage of income. So it should be fairly obvious that any cut to somebody making $1MM is going to be larger than any cut to somebody making $50K. It is thus true that ANY across-the-board tax cut will effect the richest more than the poorest. I can spin the Bush tax cut my way too:

The richest group sees its tax rate lowered by 6.6% to 33% of their taxable income.

The poorest sees its tax rate lowered by 5% to 10% of their taxable income.

The richest seem to be paying both more in dollars and in percentage.

A tax cut to only the poor and middle class wouldn't do anything, because they barely pay taxes in the first place.
Furthermore, it is often suggested (as you have) that only the top 226,000 people are getting a tax cut. This is not true. Everybody who pays taxes is getting a tax cut. People bias the statistics by inventing this "millionaires" bracket - but, in fact, the top bracket is at $136,750.

But regardless of the fairness of a progressive tax system, your economics need some work too. Even if, as you say, we just bank the tax savings - what does that do? Well, it gets loaned out for cars, houses, and whatever else people borrow money for. I don't have a big vault full of $100 bills like Saddam Hussein, every dime I have is somewhere in the economy.

On the Halliburton issue, I think we can be sure that it will be completely investigated, and I highly doubt that anybody as politically savvy as Dick Cheney was aparty to any wrongdoing (at least overt wrongdoing).
TJ - tsk, tsk - your math is showingmoneyman
Apr 22, 2003 1:26 PM
A reduction of 6.6 points, from 39.6% to 33% is actually a reduction of 16.67%. A reduction of 5 points, from 15% to 10%, is actually a reduction of 33.33%. The poor ONCE AGAIN get the best deal, yet they produce so much less than the rich. What did they do to deserve it? Nothing! They are just less productive members of society, and that is why they are poor. There is no justice.

TJ - tsk, tsk - your math is showingLive Steam
Apr 22, 2003 1:42 PM
I was going to point out that the lower percentage payers were actually getting the biggest cut. It may amount to less dollars and cents, but the facts are always skewed by the Left in order to raise rabble with the less educated. No offence Carbon. That wasn't directed at you :O
I did that on purpose,TJeanloz
Apr 23, 2003 7:05 AM
Your argument, which I believe is more correct, is more inflamatory, so I chose to use the more conservative viewpoint. My tax proposal looks like this: hold government spending constant, plus a COLA. Tax the top income earners at 99% until you have enough money (we can live on 1%, trust me). Everybody else pays nothing, but they aren't allowed to complain. The beauty of the system is that I would know that my taxes couldn't go up any more, and everybody further down the line would have to pay for any incremental government service.

I would be angry with the system, if I, in fact, paid much in taxes at all...
While usually very clear and rational...DougSloan
Apr 23, 2003 8:05 AM
...that doesn't make any sense to me.

It doesn't make any sense at all, economically,TJeanloz
Apr 23, 2003 8:13 AM
It doesn't make any sense, but at least the middle class wouldn't be able to complain anymore. Though I'm sure they'd find something...
I get it, reductio ad absurdum, sort of nmDougSloan
Apr 23, 2003 9:17 AM
Are you sure about that?czardonic
Apr 22, 2003 3:47 PM
First, I think that the relative tax burden of those slated for a cut is irrelevant. This tax cut is not being sold on its progressiveness, or at least not so much as it is being sold as and economic stimulus.

Maybe you've got numbers that prove otherwise, but speaking as a person of the middle class I can tell you that I am not about to go buy a new car because interests rates drop thanks to an influx of cash into your bank accounts. You seem to be implying that the economy can be stimulated by making it easier and cheaper for the middle and lower class to spend money that they don't have (i.e. borrowing it). Speaking as a consumer, I don't spend more money when I have easier access to credit. I spend more money when I have more money. As such, only a tax cut that puts money in my hand will stimulate me to spend it.

So, I disagree with your conclusion that that a tax cut to the poor and middle class will do nothing because they pay so little tax. It will do relatively little in terms of reducing the tax burden on Americans in general, but it stands to do a lot more in terms of stimulating spending (again, the advertised effect).
Halliburton ...sacheson
Apr 23, 2003 5:27 AM
Halliburton's major competitor in the OFS industry is Schlumberger (although not a direct competitor in this early reconstruction phase). They are French. The choice will be justified from the "lesser of two evils" selection to restructure Iraq's petro-chemical industry since a) the US-French relations are strained and b) Schlumberger is in a world of hurt after their $6.5 bn IT shopping spree in 2000 destroyed investor relations. Halliburton is a very capable company, and even though I think Dick Cheney will profit from this contract (the primary reason they shouldn't have gotten the contract), Halliburton is probably the best choice for the contract.

Incidentally, does anyone remember the news flash a couple of months ago with Halliburton losing that dirty bomb quality radioactive material in Africa?
Apr 23, 2003 6:45 AM
Your are correct regarding Halliburton/Schlumberger; I didn't make the point because of my relationship with Schlumberger.

It should also be noted that no Iraqi, or Middle Eastern, company is qualified to do the OFS work that has been contracted.
my relationship with Schlumberger ...sacheson
Apr 23, 2003 8:34 AM
... was dissolved last week.

Are you in the OFS side? I was unfortunate enough to be a part of that shopping spree that didn't pan out. I worked for this little company of oil and gas consultants in Denver that was purchased. We were lumped into that IT acquisition even though we didn't fit that group very well ... hence 3/4 of the office's current employment status ...
Mine is both more and less direct...TJeanloz
Apr 23, 2003 9:52 AM
I don't work for or with Schlumberger, but I have a pretty close relationship with some people pretty far up the food chain.

The SchlumbergerSEMA bullsh!t was bad news from the start. Nobody knows why they had to ruin the good thing they had in OFS.
Apr 23, 2003 11:19 AM
They were outsourcing IT to Sema. The clients didn't want the extra security nightmare with a third party and their highly sensitive data. Schlumberger had the option to create their own IT branch, or buy an existing one. Sema seemed good on the surface, as they'd provided good service when used. They soon found out, it was a nightmare under the hood.
Don't forget the100,000...cycleaddict
Apr 22, 2003 12:32 PM
of us over here at "the world's biggest airline" that just voted ourselves a tax cut through a 30% pay cut!!
And then we hear that our boss (the single largest individual donor to GWB's campaign in the state of Texass) gives himself and his closest buddies a big fat bonus!
I know, the lurking neo cons will slam me with the "it's a free country and you could've become a corporate crook but were just too PC" line!
A couple of points here.chopper
Apr 22, 2003 12:48 PM
"...So we are giving people who already have most of the wealth, more wealth for them to spend to boost the economy... "

First off Carbon, the government isn't giving anybody anything. If one receives a tax cut the government isn't giving them anything, they are letting them keep what was already theirs to begin with. Believe it or not some people who actually make more than $136,000/year actually earn their money and work hard for it. Not everybody is a Trust-Fund Kennedy.

Cycleaddict: I'm right there with you on the bonus thing with AA. How can any executive justify a bonus when the company is facing bankruptcy? Its shameful and i'm disappointed it took a public flogging for them to reject the bonus.
that bonus thing was bizarre; bad form nmDougSloan
Apr 22, 2003 1:07 PM
After reading your post...Captain Morgan
Apr 22, 2003 1:47 PM
I don't think "anyone" could graduate from Yale. I also didn't know silent movies were on TV. Perhaps your post was written this way on purpose as a troll-like feature.

But I will take the bait and say that the largest part of this tax cut is the elimination of double taxation of dividends. FYI, we are the only major developed country in the world that double taxes dividends. Do you even know what that means?

Also, I must say as a middle class taxpayer with children, my tax situation has definitely improved tremendously since Bush took office, so "the rich" are not the only major beneficiaries.
oh come on...mohair_chair
Apr 22, 2003 3:02 PM
I see silent movies on TV all the time! You just aren't looking hard enough. TCM has been playing Harold Lloyd films recently on weekends, including the comedy classics "Safety Last" and "The Freshman." It's brilliant stuff.
if we are going to end double taxation of dividendsrufus
Apr 22, 2003 7:15 PM
then we should eliminate the taxation at the corporate level, not at the individual. this provides the corporation with more money to re-invest in itself and other businesses, creating jobs and providing a real growth stimulus to the economy.

again this will cause cries of class warfare, but most middle and lower class investors in the markets have their money in tax free accounts, either ira's or 401k's. as such, they will recieve no additional benefit if dividends are not taxed at the individual level. the people who most benefit from this are the very wealthy who hold vast amounts of stocks in taxable accounts.
You are SO right...on both accountsPaulCL
Apr 23, 2003 6:37 AM
Let's say IBM has $20MM pretax for dividends. After their tax (@42% corp level), they distribute $11.6MM to shareholders who are then taxed (say 20%) for a net spendable income of $9.28MM for shareholders.

Eliminate shareholder tax on dividends equals the net of $11.6MM for shareholders (that's us, folks)

Eliminate corporate tax on dividends means $20MM flow to shareholders minus shareholder income tax (20% again) equals $16MM or a NET 38% increase in income for shareholders.

But you are so right to say that the Democrats (yes, I'm afraid it would be the Democrats on this one) would scream about corporate deals...unfair to the common man...yadda yadda yadda...even though it would benefit the common man SO much - since >65% of all Americans own stock (individual equities, mututal funds, etc.). The problem is that politicians aren't too bright and they just want to get on TV and not necessarilly do the intelligent or right thing. Its' more important for pol's to be heard than to make sense. That's all politicians - dems and repubs alike.

OK...I'll put my calculator down and stepoff my soapbox.
Careful, talk like that cost Paul O'Neill his job (nm)TJeanloz
Apr 23, 2003 7:09 AM
And I'm not talking about the Yankees.
so are you saying....rufus
Apr 23, 2003 10:35 AM
that bush doesn't want to eliminate dividends to spur the economy, but instead to line his buddies' pockets with more cash?
Apr 24, 2003 5:34 AM
double taxation of the same dollars is the government lining their pockets with more cash. For the moment, we can leave the economic "spurring" out of the picture for now - though it would help.

"His buddies" or I take your meaning as public corporations, would not benefit - we, the shareholders, would benefit. They will still pay out the same amount of dollars from earnings. Its' just a question of whether your government taxes it before or after it is mailed to you.

Your comment is a perfect example of the immediate reaction I would expect from the Democratic camp. Knee-jerk negative ... just think it through. Look at the numbers. Who cares which group gets the tax break becuase it benefits all of us MORE to not tax the corporations. It will put more dollars in YOUR pocket...and yes...probably more dollars in the pockets of a friend of Bush' and a few friends of Clinton and Kennedy and Daschle...get my point?
Double taxation of the same dollars is wrong. After agreeing on that, we should look for the best way to put more money in the taxpayers pocket. My math shows how.
i was actually rsponding to TJeanloz...rufus
Apr 24, 2003 7:38 AM
making a bit of a tongue in cheek, sarcastic comment. i'm assuming he was in full agreement with your post, as am i, i feel that if we have to end the double taxation of dividends, it makes much better fiscal and econmomic sense to do it on the corporate side.

TJeanloz quipped, "careful, it's talk like that that cost paul o'neill his job" in response to your post. so i'm assuming that o'neill feels the same way, that it would be better for the economy to do it on the corporate side. obviously, if bush fired him because of this view, then he feels it's better to end the tax on individual dividends. by "his buddies", i meant that bush would rather see his very wealthy friends save thousands on dividend taxes rather than actually pursue a course that would spur economic growth. i feel that ending the tax on the corporate side makes more economic sense, because then the company has more money that it choose how to use most efficiently-either pass it all on to shareholders by increasing the dividend payout, or invest that money back in the company. either way, the company's value has grown, providing economic stimulus.

as i mentioned, most lower and middle class investors wouldn't see that huge a benefit if their dividend taxes were ended, because they hold stocks in tax free accounts. sure the value of those stocks would be higher, giving them some benefit, but not as great a benfit as those who hold stocks in taxable accounts, usually the very wealthy. whether those individuals choose to plow that money back into the economy is not guarenteed.
Apr 24, 2003 9:18 AM
Sorry to take you as the wrong side.
Apr 24, 2003 9:30 AM
O'Neill came under heavy fire from critics for saying that the corporate profit tax didn't make much sense economically. Many economists agree with him. Most Democrats seem not to. This is a classic case of being right, but the concept is far too complicated for the man-on-the-street to understand, and too easy for it to be (believably) twisted into "Paul O'Neill, like everybody else in the Administration, wants to give corporations a big tax break." Never mind that corporations can't pay taxes in the first place. I'm quite sure that GWB agrees with O'Neill on the corporate tax -- but no politician in his right mind would vocalize that sentiment.

On a side note, that is mildly amusing in the context, there is another famous Paul O'Neill, who plays outfield for the Yankees -- the two met after O'Neill had been appointed Secretary of the Treasury, and O'Neill the outfielder quipped about how much he was looking forward to having his name appear on dollar bills; two which O'Neill the Secretary replied that he was very much looking forward to being able to get restaurant reservations in New York on short notice.