As expected the tax cut benefitted the richest 1% of tax payers and this would seem to be the only thing on the Bush domestic agenda. He is a little too busy visiting foriegn countries and trying to help them with their problems.

Does this tax plan benefit the average working class American. Because proportionally the middle class tax burden is actually going up. Progessivity would make the percentage of tax liabilty to rise with the income level, liberals think this is fair. On the other hand conservative claim this will spur investment that translates into better jobs and wages for the middle class (trickle down effect). I personally feel this tax cut benefits the status quo (for the most part) and the poor (a little). I'm not really convinced the middle class benefits from this plan at all.

"Citizens for Tax Justice found that for the lowest fifth of taxpayers -- those earning below $16,000 -- federal taxes would fall 10 percent between now and 2010, while federal taxes for those in the second quintile -- earning between $16,000 to $28,000 -- would fall 12 percent. At the other end of the scale, the decline for the top 1 percent of taxpayers -- those making $337,000 and up -- would be 15 percent.

In contrast, for taxpayers earning between $45,000 and $337,000, the decline would be 7 percent, less than half the cut reaped by the very wealthy."

Tax Cuts

And the question you wish debated is......................

My guess is, from the title,

Just as a useful tip, it really helps us debaters if you restate your question in bold at the bottom of your post.

- Increasing child tax credit helps everyone. Unless only rich people have kids.

Same with lowering marriage penelty. Only rich people get married right?

Yeah, it's sad that the middle class once again get shafted. We should be used to it by now :/

--cheers

The tax burden rose from 25.5% of the total to 26.1% of the total. Not really a huge jump (a 2% hike in the percentage).

Taxes are still lower for ALL income groups, top to bottom.

The facts, as presented, seem to be LOOKING for something to criticize. I guess tax cuts weren't sufficiently "progressive" for some.

I am told I will get $1100 and I am not in the richest 1%.
I am against the tax cuts I would rather collect social security.
I will spend the money to pay visa/mc/discover.
Maybe an outfit or two extra for the wife.
Hope that is the stimulus we are looking for.

That article leaves out those who earn between $29k and $44k, what about them? Isn't that the middle class this article wanted to defend?

Does anyone have a better breakdown of this tax cut? (I'll be searching in the meantime, also).

I watched the arguments on CSPAN yesterday and from what I remember the child credit was for all taxpayers except the bottom rung that make between $10,000-$26,000 who were cut out at the last moment after GOP reps had a closed door meeting with Bush. They claim these kids should be left out because their parents don't even pay taxes.

The argument is that they DO pay taxes- payroll taxes, sales tax, and in some cases property taxes.

Luckily I should be getting a large credit since I have 3 kids and made the cut. Mine will have to go to rent and bills. Hope that helps the economy in some round about way that we won't have to pay for later in losing police officers or other government funded jobs but I too would rather get it back in social security.

I heard on the news yesterday that the dividend cut will give Rumsfeld a $600,000 tax benefit and Cheney over $100,000. I'm sure they need it more than the low income people and I bet they'll be using it to stimulate the economy.

You know, these people they cut out are not welfare beggars. They are hardworking people that are trying to have jobs and take care of their kids while working and living check to check.

I'm not surprised by this little loophole but I am disgusted.

Danya,

I stated in another thread that I think it is a wrong-headed argument to say that a family that pays $0 in income tax should get an income tax cut.

I am not in favor any tax cuts at this point. Spending cuts would be good. Closing the Bermuda shelter loophole is overdue.

I have said a payroll tax cut would have been better than the previous rounds of cuts. But I am not in favor of paying people more in tax refunds than they paid in taxes.

I promised I'd come back with research and here I am. I think I found something better than an analysis by other people. You can do it yourself: Turbo Tax 2003 Tax Relief Estimator. They warn you it takes about 10 minutes.

I was halfway through it before I realized some of the info I needed was at work and I couldn't possibly guess Be prepared with a little income and tax info to be accurate.

This should be a good way for each of us to determine exactly who benefitted from the tax cuts.

Eeyore,

I'm not in favor of any tax cut's either. But to single out the people who really need it most and who qualified for the previous child tax credit but are left out of this one smacks of greed. These low income people are the ones most likely to fall into the welfare rolls because they can't afford to pay child care when the cost is equal to or more than the minimum wages they are making at Walmart or McDonalds. Yet they prefer to work rather than collect welfare and they and their kids struggle on. It seems to me that if this is really supposed to help the economy cutting them out of what can only be called a windfall doesn't make sense. The damage had been done, the bill passed, and that simply added insult to injury, IMO.

I know who benefits from these tax cuts: corporate fat cats who can now receive most of their pay in the form of dividends on preferred stock, for an effective tax rate of 15%. For all the whining about double taxation, that's money that quite likely wasn't taxed even once when it went into the corporate account, and now it's going back out again at a rate lower than that paid by poor people. No amount of *** NOTICE: THIS WORD IS AGAINST THE RULES. FAILURE TO REMOVE IT WILL RESULT IN A STRIKE. *** about "but the rich pay more" can justify that. Under the new tax code, they won't - neither by dollar amount nor even by percentage.

By the time the standard deduction is taken out most poor people pay very little in federal income taxes. Much less than 15%.

Depends what you consider "poor" I guess. Would you want to live at the income levels that would have a tax rate less than 15%? Been there, done that, wouldn't want to do it again.

Let's see from the 1040A 2002 Tax Table

Income after deductions $50,000, total tax liability $7289. Add a standard deduction of $7850, add $3000 per exemption for a family of four we can now add $19850 to taxable income to get actual income. A family of four making $69850 is paying $7289 in taxes, an effective 10.4% income tax rate.

Of course, that same family of four is paying a higher percentage in payroll taxes, state taxes, and all the other regressive taxes some people try to brush off. The overall tax rates are probably pretty comparable for that family of four and the single corporate CEO making tens of millions of dollars. George W. Bush wanted that CEO to pay zero tax on those dividends. Does any of that strike you as fair, or as sound economic policy?

I'm not finding anything incouraging in the News about the Tax cut. This may well be the most disturbing thing I've found. Submitted for your consideration without comment.

"More than 400 prominent economists, including 10 Nobel-Prize-winning economists, signed a petition opposing the Bush tax cuts, that appeared in a full-page ad in the Tuesday, February 11 issue of the New york Times.

The petition stated in part: "Regardless of how one views the specifics of the Bush plan, there is wide agreement that its purpose is a permanent change in the tax structure and not the creation of jobs and growth in the near-term. ...passing these tax cuts will worsen the long-term budget outlook, adding to the nation's projected chronic deficits...To be effective, a stimulus plan should rely on immediate but termpoary spending and tax measures to expand demand, and it should also rely on immediate but temporary incentives for investment. Such a stimulus plan would spur growth and jobs in the short term without exacerbating the long-term budget outlook."


Tax cuts

Of course spending cuts are needed. However, they are not politically expedient.

I really expect some fairly sizable spending cuts after GWB gets re-elected in 2004.

Cutting taxes without doing anything to spending will create bigger defecits, there is almost no argument against that.

However, these tax cuts set the stage for future spending cuts and the road to smaller government. A road we should never have gotten off of.

That's the sales pitch, but is there any indication that the hoped-for spending cuts will actually occur? Seems to me the administration's been very quiet about changing anything on the output side of the equation.

It looks to me like we will be spending less on services and more on interest.

This is a dishonest way to get those results. It is is good government it should be poltically expedient. Sell it directly and pay for your tax cuts. This way a sitting politician gets the tax cuts and continues spending and hamstrings future presidents who will have to spend less and raise more. (A la Bush the First)

Hi-

I don't think that we should be cutting taxes at all right now, we need to deal with the debt before incurring more debt...I'm not sure if it is just being irresponsible or if it's a way to incur enough of a deficit so that other things can't be funded.

I'm all for cutting taxes, just can't do it till the timing is right, which, IMO, would be after these baby boomers retire and we have to deal with not having a SS surplus...sigh...oh well, guess the next generation will have to worry about that one....

Don't you think this is rather putting the cart before the horse, though? Shouldn't the tax cuts come after the spending cuts? I think I'd feel a bit more confident in a government which "set the stage" for lower taxes by first cutting back on spending. Am I missing something? Or are we just to put all our faith in what an administraiton might do if re-elected?

Sometimes people put the cart before the horse because they couldn't care less about the horse; all they want is the cart (or what's in it). Over a week ago I asked if there was any reason to believe that spending cuts will actually occur during this administration, and the silence since then has been deafening. It's pure bait and switch, Wertz, but you knew that.

Some hold that it is politically easier to cut taxes first. Then let the resulting lower government receipts put pressure to reduce, or at least limit the growth of, government.

I am in the lower end of the middle income bracket. Does this tax cut effect me? Yes. Are these taxes good, Yes. I will tell you why.

Over four months ago I bought stock in a company whose shares where very low and did not look to go much further. This tax cut from what I can see (along with other things) has had the effect to spur investors to invest. What this did for me was bring my low stock up to a point where I have made a very good amount of money on the return in a short amount of time. This has given me the ability to purchase more stocks in other companies thus I am investing in smaller companies giving them the cash needed to grow and expand. As companies grow and expand they hire new people on the low end of the economic scale to the upper end.

I am a single person, who lives within my means, debt free with out a child. I do not have many loop holes to use because of my income and expenses. Yet I still benefited from this.

The income tax cut will always “benefit” those who pay more then those who pay none. I myself want to see all the “rich” to make more and more money this will always bring up the ability for others to grab on to those coat tails and catch the ride like I have done. Now, is it my fault or anyone for that matter that people can not live smart and live with in their means?

Those who are in the lower end of the scale, who do not pay INCOME TAX, meaning what they pay in they get back in full at tax time can’t get an INCOME TAX cut because they pay NO INCOME TAX so to speak. The payroll tax from what I understand is SS and Medicare which everyone pays and everyone doesn’t get back. As far as sales tax and property tax, those are state issued and collected and the Federal Government has no real say or ability to lower or raise those taxes. So to use those two for your arguments against a Federal tax cut doesn’t hold up.

As far as spending cuts, yes, it would be a whole lot better to cut spending before giving tax cuts, this I will agree. However, please tell me how spending cuts will cause the economy a “shot in the arm” as far as growth? If for instance you cut spending this year (with a war going on) Where would you cut spending? What is the fall out of those spending cuts? Would jobs be lost because positions have been eliminated?

I know spending cuts is a good thing for the economy, but I do not understand how spending cuts can immediately effect the economy in a short amount of time that tax cuts have.

Again, hugo: are there any actual signs of this occurring, or that it will happen any time during Bush's term? Does the sales pitch have any connection to reality?

The Undergraduate Dean of Economics at the University of Houston told me this was the theory of those in the Reagan Administration. They never truly believed that tax cuts would pay for themselves. An analysis of the effect of the '86 tax cuts would be a whole debate in itself. A lot depends on if you credit the Reagan Administration or the Clinton Administration for the 90's boom and how much credit you give the tax increase under Bush 1 for reducing the deficit. I am quite skeptical of any serious attempts to even reduce the growth of government spending under Bush. I somewhat concur with Galbraith that "(i)t is more conservative to tax and spend then borrow and spend".

Having said that clearly there is a point where deficit spending creates a political liability and either government spending will need to be cut or taxes raised. Tax cuts obviously put some pressure to cut spending. The conservative bastardization of the Keynesian multiplier effect ignores reality.

I'll take that as a no.

It's a no for the current administration, a maybe for the next one. Maybe Ross will make a comeback.

It is quite obvious who benefits.

Ari Fleischer announced, "The president does not believe in punishing people because they are successful." Indeed. According to the Brookings Institute, a typical teacher, police officer or fire person could expect a return of $350 to $500 under Bush's plan, while the typical multi-millionaire could expect about $88,000.

-Robert

So, what we should do is punish the rich for being, well, rich?

CP

We should use fiscal responsibility. We should not create more unfunded mandates for states (Homeland defense issues and Leave No Child Behind as examples) and run social security to its demise and wage a war on terror and press for a Prescription Drug benefit.

The beneficiary of this tax cut is the Bush administration which gets credit for spending programs and tax cuts and saying they are tough on terror at home and for education and friends of the elderly while making the next administration and the states figure out how to pay the bills.

If we cut taxes the wealthy will always get more of the benefit because they pay the overwhelming majority of the taxes.

Without the capital gains tax a CEO might not have to pay any income taxes at all. Paying your share of taxes isn't punishment, it's fairness.

Fair share, what is fair share? Fair share is not enough so the gov't can function and so that you can take care of the lower class.

CP

Because they make more money in the first place. Has simple math eluded you??

If you are paying more into the system and there is a reduction in the %, then you will have a greater reduction.

Within the last year my position and pay at work has changed dramatically. I am now paying more taxes in a month than I used to make in a month. According to the link Jaime had provided to the Turbo Tax site where you can figure your tax savings for the current tax cut, I will have to pay $3,200 less than I would if this tax cut had not passed.

The rich deserve tax cuts, the middle class deserve tax cuts, even the poor deserve tax cuts. The only ones who don't deserve tax cuts are democrats (but hey, they don't want em anyway). Seems like there's a simple solution to me. Only tax democrats!!

America is generating debt at unsustainable levels. The national debt is in the Trillions and growing. These tax cuts are going to make it grow exponentially. When the debt starts to compond we are in real trouble. Ross Perot tried to get them to get this under control but we are back into deficit spending on a grand scale. I agree that the government should not be involved in everything but they are. The tax cuts are the only thing on the Bush agenda, like his father our president brings no domestic agenda to the American people. This Reagonomics ploy satisfys the rich and threatens to bankrupt out Federal government.

I need more then a war on terrorism and tax cuts. I want substance and fiscal resposability. We are not getting this from Bush, Clinton was at least aware of this problem. Maybe we need Jessey Ventura to run for President, at least he would make some sense.

Exponentially? Really? Please give me the mathematics behind this prediction.

There is an old story of a man that did a favor for a king. When the king asked what he wanted for a reward the man asked for a kernal of grain on the first square on a chess board, then two kernals on the second...by the time it gets to the last its 250 times the total wheat production of world. Exponential growth is what we are heading for, if it ever compounds.

A $400 billion deficit would be nearly 4 percent the size of the U.S. economy. Many economists consider that to be a significant measure of the government's ability to afford its red ink. As the condition of the budget worsened in the 1980s and early 1990s, there were seven annual federal deficits that were at least that large compared to the economy.

"This year will mark the second consecutive one with a budget deficit, following four straight annual surpluses in the second term of the Clinton administration.
deficit spending

By one set of estimates, as of 1989 the present value of future government spending was $25.4 trillion, the government's net wealth was—$0.5 trillion, and the present value of net payments of current generations was $21.2 trillion. This left $4.7 trillion to be paid by future generations.

The government can conduct any real economic policy and simultaneously report any size deficit or surplus it wants just through its choice of words. If the government labels receipts as taxes and payments as expenditures, it will report one number for the deficit. If it labels receipts as loans and payments as return of principal and interest, it will report a very different number. "more cited math

Its Reganomics revisited, they say that they can grow us out of deficits but we keep getting deeper. I dont know at what point it will compond but the interest causes it to grow exponentially at that point. You do the math, the constants and the variables are all out there for you to find with minimal effort.

Exactly! Starting next month, my tax bracket goes from 28% to 26%, so I wll be taking home 2% more of my paycheck each month. But wait, the guy making $300k a year gets more than me, it's not fair! What's that you say, 2% of $300k is more than 2% of $65k? Oh, well it still is not fair, I want my share of the money! This is definitely a tax cut for the rich, long live Ted Kennedy.

I really don't think people have a clue as to the real danger of this tax cut. Americans want the government to do everything from building roads to subsidizing catfish farms. The trouble is that no one wants to pay for it. Nelson A Rockefeller was Governer of New York from 1959-1974. He had promised to fix roads, improve schools and hospitals. Of course when he was elected he needed money for all of this. Repeatedly he put referendums on the balots for bond issuance but the voters rejected every one of them. In 1990 he was speaking before a Congressional committee he said, " I was unable to obtain public approval of state bond issues. We therefore devised and innovative approach" (Albany News, Nov. 31.1990) Innovative was an understatement! This move was downright creative.

Getting no help from the people of his state he turned to a Wall Street wizard named John A. Nelson. You might remember him from the Watergate scandle when he was convicted on felony charges. He tells Rockefeller how he can get the money without referndums, you just issue bonds off budget. "Old Nelson espoused my theory like it was the salvation of mankind he treated the money like manna from heaven" Why no one is concerned that we are into record deficits of 400 billon dollars annually on budget and twice that off budget I dont know. Its the mystery of American selfishness or self interest if you prefer a subtler way of describing it.

Instead of asking who benefited from the tax cuts I could have asked if it was a good idea. The trouble is that everyone is more interested in whats in it for me. Last time I checked roughly 2 trillion dollars comes into Washington a year. There is no sense in these ridiculas deficits, we got along fine without them for four years with Clinton and for 200 years before Reagon. I dont know when the bubble will burst but weather its 1/2 or 1 quadrillion dollars but its coming. But hey, who cares? We get to eat our cake and have it too today. We'll let someone else worry about the bills we are running up tommorow.