Bye, Bye Tax Cut

[Orbius]

You've learned the Republican double-speak well eTech, you know when you're talking about tens of millions of dollars that even small percentages amount to a much larger amount of cash. Republicans love saying 'rich people deserve tax cuts too they work for their money', to which I say fine, give all Americans the same amount of cash back. Are rich people more of a 'person' because they make more money. The Republicans seem to think so because the ultra rich will get millions back while i'll only get a couple of thousand at most.

This tax cut plan is infantile stupidity and I encourage anyone with any sense to stand against it.

 

[Fiddy]

<< Since we are in recession, and it's going to get worse because Greenspan waited FAR too long to react, he'll get it passed as a stimulus to rectify the Fed's stupidity. >>



I couldn't agree more. Take a look at the stock market, look at all of the companies filling Chapter 11, ie; Montgomary Wards, OMC and others. By the way, OMC manufactured Johnson and Evinrude outboards since the early 1900's in addition to boats like Four Winns, Hydrostream and ChrisCraft. Sears is closing 89 stores, Office Depot doing the same. These are big players falling by the way side. Think about it, did you spend as much this year on Cristmas as you did last year? If you did, you're in the minority. The 4.0% unemployment number that just came out on friday is bullshlt. Gm, Ford and Chrysler have all laid off people and idled plants. At Mongomery Wards alone 38000 jobs were lost.
First, Greenspan hits the economy with too many rate hikes and doesn't allow them to work through the system. The he waits WAY too long to cut. Part of the problem was the election nonsense being drawn out through the FOMC meeting in November. Then in December, all they did is change the bias since it's Fed policy not to go directly to a cut from a rate hike. The big question now is whether we get a tax cut OR another 50 basis point rate cut at the end of January FOMC meeting. Right now we need another 50 but with the bullshlt employment number being inline with estimates it's uncertain right now what the Fed will do. As someone who trades everyday, all day in the stock market, I see the effects as they happen and it's ugly. The next six to nine months are going to be lean folks.

 

[Michael]

Orbius - You seem to lack a basic grasp of how the different levels of tax cuts at different levels of society work. You also are exhibiting crass classism and envy of those better off than you.

First, tax cuts only can give back taxes paid. Since higher income (rich is relative depending on where in the country you live, I define rich as being able to comfortably live off of investments without working) people pay higher taxes, they will definition gain more absolute dollars back from tax cuts. Lower income people receive relatively more dollars back as etech's posts have already shown.

Unless you want to change the US to a much more socialist country with even more income distribution from one group to another group, tax cuts in and of themselves will give more money to higher income people.

The proposed tax cuts will give the most benefit (in absolute dollars) to working high income couples and to owners of small businesses. Take my personal circumstances, for example. My wife is an MD and I am a fairly high level Finance executive making a decent salary. We are hit by the marriage tax penalty. Even though our incomes are fairly high, we also live in the Silicon Valley area and just bought a house last year. We are not rich relative to the area we live.

When the marriage tax penalty us rescinded, we will gain a decent amount of $$$ from it. I will take the extra income and invest it in three areas i) college fund for my daughter, ii) paying my mortgage off faster (I have an aversion to debt, even tax subsidized debt), and iii) retirement savings (I already contribute the max $ amount allowed to my 401(k), so I need the limits raised to really be able to do much more here). My wife will pay her student loans off faster (so she can stop working and raise our current child and the one or two more we're planning on having).

Like you said, we're rich and we're just putting the savings &quot;in the bank&quot;. Let's examine the consequnces of the &quot;banking&quot; actions we're planning on doing. By investing, I am creating a higher demand for stocks. This will either contribute to helping stop the current decline or start to push the stock market higher. This will create a wealth effect and increase consumer confidence. It makes the IPO market better and this can lead to more jobs.

As my wife and I pay off debt, it increases the money supply that the banks have to loan to others who need it. Increased supply of cash available to loan means lower rates for everyone. In the long term, the higher investment gains in my 401(k) will lead to higher income in the future which will be taxed as I withdraw it. Look as it as me extending my current salary well past my retirement date.

The really rich already pay little or no tax. They have most of their wealth tied up in stocks (which only trigger taxes when they are sold which the really wealthy rarely have to do) and they tend to live off of interest coming from tax free sources such as treasury bills. They also already are using structures such as generation skipping trusts to protect themselves against estate taxes (although they are intersted in reform here).

Small business owners typically are hit by the estate tax. This creates a big roadblock for them to allow their family to benefit as much as they should fromt ehri ahrd work. The estate tax also hits farmers pretty hard.

Lower income people will get a big payback relative to their current income. It would be nice if they invested the savings for the future (even if it were in the form of buying a house). Chances are that they'll spend it or reduce debt incurred from past spending. It will make a big difference to their standard of living while the the tax changes for the &quot;rich&quot; will make little difference to them.

The important thing is not just the tax cuts, it is controlling government spending.

I will also add that if you're accusing etech of falling for the &quot;Republican&quot; spin, you are swallowing the &quot;Democrat&quot; spin hook, line, and sinker.

Michael

 

[etech]

Orbius, are rich people &quot;less of a person&quot; because they make more money? That is what you seem to be implying.

 

[Orbius]

First off I could care less about the 'mechanics' of a tax cut on the system. I don't care! All I know is that under the Bush plan I'll get a bit of cash back and rich people will get a ton of cash back. Thats the reality of the situation. This country is already 'rich' friendly compared to the rest of the world, this is just another slap in the face of the hard-working people in this country.

More than likely this is a political move by Bush anyway, he can say 'this plan will solve our economic problems' then the Democrats will kill the bill, and then Bush can say 'look I tried to save the economy but the Deomcrats killed the bill.' Isn't politics wonderful?

 

[Orbius]

etech, how does my suggestion that each working American should get an equal tax cut implying that? Actually you're implying that regular Americans are somehow 'less of a person' than rich ones by agreeing that the rich should get a much more substantial amount of money back from the Government.

Remember average Americans pay probably about 60%-80% of their income on necessities while the rich may spend 5%. Obviously there is a higher burden on regular folks so am I wrong in saying that we should say to hell with percentages, lets give the assistance where its needed most.

 

[Michael]

Orbius - You're getting less because you make less. Ok, since you're just acting out of jealousy, I'll skip real explanations with you in the future.

I will give you one bit of advice. Work harder and make more money. It's more productive than whining about those who are already following that advice.

Michael

 

[Orbius]

Michael you can take your smarmy assumptions and shove them. Jealously, ha not hardly, theres plenty of money in my family, so I have a better idea of how the games played than you ever will.

 

[etech]

Orbius, my nearsighted friend.

Tax Relief for Families of Four
A family of four making $35,000 will receive a $1,500 tax cut, a 100 percent reduction.
A family of four making $50,000 will receive a $2,000 tax cut, a 50 percent reduction.
A family of four making $75,000 will receive a $2,500 tax cut, a 25 percent reduction.

It's difficult to cut more then 100%

 

[Orbius]

etech I re-christen you percentage monkey. Bury your head back in the sand mr.Ostrich.

 

[etech]

cute Orbus, shall we call you Robin Hood for trying to steal from the rich to give to poor. He was a myth also as is your contentions.

Your class envy is showing loud and strong.

 

[Orbius]

haha you fool my father has millions, i've been on both sides of the fence unlike you, maybe one day you'll be rich then all your illusions about wealth can be dispelled.

 

[Michael]

Orbius - then you're not only jealous of what others make, but you're specifically jealous of what your family makes as well. I take that from the fact that you said that you're getting less of a tax break in absolute $ terms and yet your family has &quot;money&quot;.

I'm should be amazed that you feel that you somehow have a better idea of how the game is played than I do, but since you had adopted a victim's mentality and are asking for handouts, I'm not surprised.

You also are failing basic math. If lower income people spend 90% of their money on necessities, then $1,000 means a hell of a lot to them. So etech's figures show a huge change in % terms not only to their tax paid but their net income as well. You could give a credit that disappears as income increases (resulting in a tax break for lower income people but nothing for higher income people). That creates a marginal tax problem at the inflection point, however. I'm already affected by the Roth Education IRA limits as I make too much to be able to take advantage of it but am living in an area where my income is not really as high as the limit intends.

Michael

 

[Orbius]

hahaha Michael you've got me in stiches mate. .

My question is, I wonder when the economy really tanks and you lose your job, will you still think the rich deserve a massive tax cut while all the entilements for the poor have been slashed to pay for it all. Something to ponder when you're in the breadline my friend.

 

[Michael]

Orbius - My wife's an MD. People will always get sick. I'm an accountant. Good times or bad, there always is need for an accountant. I made it through the '80's and '90's without being laid-off (and I worked in Aerospace and for companies like AlliedSignal which are experts in layoffs). My dangers are 1) my company is bought out and 2) I get fired for something (the higher you are in a company, the greater the risk). I have a very good mix of accounting, audit, operations finance, and SEC reporting experience, I'm not too worried. I also bought a house that is no where near what I was approved for. Between my emergency fund, unemployment insurance, and my wife's salary, I'll be fine.

You will note that I took steps to ensure that I was protected, unlike you who seems to feel that the government is responsible.

Cutting the tax rates has nothing to do with the safety net out there for recently unemployeed people or poor people. That would take cuts in government programs.

Michael

 

[Orbius]

<< I'm an accountant >>



Say no more. That explains a lot. ;D

 

[Michael]

Orbius - glad to see that you finally conceeded. <grin> Now go work harder and earn more money so you'll benefit more from the tax cuts that are coming.

Michael

 

[mazdarx7]

Glenn1,

I won't apologize for questioning anyone's vote, especially since it has come to light that so many votes were thrown out because a) more than one selection was indicated b) a selection was attempted and not sufficiently recorded.

Motives for voters should really be questioned, especially since campaign promises are made for the desparate or even greedy that in reality are a never never land of coming to fruition. The tax cut was offered as a free lunch, as we know doesn't exist. Those who voted for the tax cut have jeopardized this nation's future over the prospect of getting a couple grand (?) somewhere over the rainbow. I posted prior to the election on the excite poll opinions on this very topic of the tax cut. I will tell you what I said about it here. Bush will not get you the tax cut, first, he doesn't have to deliver this in 2001, because, he is sworn into office 2001, he won't have his sh*t together to get you a tax cut on year 2000 income. Therefore, there won't be anything for 2001 income as well. Now it will be 2002, before he can even mount a tax reform bill to get this tax cut thru. This won't happen either and if it does, will apply to 2002 income, which you won't see until end of 1st q 2003/2nd q 2003. Then 2004 arrives and if he hasn't gotten the tax cut thru, he'll blame the democrats and he'll be on his way out of office because he just wasn't qualified for the job in the first place. But he and Daddy Bush will be laughing and having a good time @ Texas baseball games collecting their Presidential pensions. It's funny how people see themselves differently in a more prosperous time. Put a little jingle in their pocket and all of a sudden their regular republicans.

 

[jjm]

I'm surprised that this thread still lives!

A few responses and observations in no particular order.

The initial point of this post was to assess the likelihood of Jr getting his full set of tax cuts through. I referred to direct quotes from the players involved to back up the assertion that I thought his chances for success were zero. Partisanship, short time, evaporating surpluses, and Greenspan will all conspire against him succeeding.

Some people then wanted to know my background and biases, which I shared (and have revealed in prior threads too). The point is that my case was built upon direct evidence. Who cares what anyone's background or expertise is if a case is built on observable fact? My experiece is completely unimportant and should not be held in higher regard than any sound case built on facts. It appears that lots of people had no counter-arguments to make, so they just resorted to looking for areas off the main point to attack.

The most emotional responses came from those who said that Democrats don't want tax cuts and just want to keep all the money and spend it. That's just patently false.

The Democrats' position is for targeted tax cuts today with wider and deeper cuts once the debt is substantially retired. To me, that is the most fiscally responsible way to handle the massive debt built up in prior generations. Perhaps those arguing for &quot;fairness&quot; should advocate taxing anyone over the age of 30 for the money to retire the debt. After all, those people accummulated the debt, so they should pay for it, right? For the record, I favor tax cuts, but I want the debt at least two-thirds retired before we go past an initial $500 to $700 million in tax cuts.

Very few participants in the discussion even tried to offer fact-based responses to the original point I made. Saying &quot;I wanna; I hope; and I deserve to keep my own money&quot; is emotional political-speak, but is not based on factual analysis.

All I asked was for people to stick to the point and honestly assess the likelihood that GWB's package would pass. It would seem that very few can find good evidence to support his succeeding.

 

[Ornery]

&quot;fact-based&quot; my ass! All you offered is opininon, the same as anybody. Join your new Dem buddies that just jumped in. You deserve each other!

 

[Michael]

jjm - My pompous fellow poster, your posts with &quot;Raygun&quot; and Jr. were as bad as those you are attempting to look down your nose at (you were &quot;trolling&quot. You offered your opinion, nothing more, and I didn't find any of your arguments more persuasive than others that were offered that were counter your point of view. Since the basis for your opinion is rooted in your training and experience that is twisted with your political beliefs, it will be irrelevent to the average person and ignored by those who differ from your political views.

Michael

 

[GD695372]

Well how about the trickle-down effect? it cough(lie) really works!

 

[chess9]

Orbius:

Hey! I like your thinking! I want double my money back from Uncle Sam! Let Bill, Ted, and their ilk pay for it. They have too much money anyway. (Ted's always giving it away to some charity that doesn't knock on my door. )

Sounds good to me.

I think I could spend $5000 without any problem. I saw a Softride at $4999 in Triathlon mag. OOOOOOh, sweet!

Anyway, if Bush is going to buy my vote, I'm not selling cheap. Say the right number and in 2004 &quot;Bush For President&quot; will be on my bumper.

Bwuahahahahahahaha!

Ain't America just the sweetest place to live?

 

[jjm]

Uh, oh, those mean-spirited Republicans are resorting to their usual attack modes!:Q

Gee, Michael, your last post seems out of character with your initial posts in this thread. Where did your reasoning on the merits of the arguments go? I did not attack you at all. Others did, but I did not; nor did I support others in their attacks. At least Ornery does not hide his more visceral tone. Stick to the facts. The attacks are childish and petty.

I took no personal shots at anyone posting in this thread. My characterizations of certain politicians sure seems to have hit an emotional chord in some of you. Are some of these politicians saints in your religion or something? I think any politician is fair game for criticism. I don't see a reason to hold an emotional attachment to any of them. (That last statement was an opinion.) And all this is still off the topic anyway.

Fact: It's now three weeks since Jr begged Uncle Alan for endorsement of his tax cuts. The only thing Uncle Al has delivered is silence and a dramatically-timed rate cut. (Note that I take shots at Uncle Al too. I think Slick Willy or Teflon Bill also deserves his monikers.)

Fact: Democrats consistently have expressed opposition to the size of the tax cut being proposed, preferring to see the debt substantially reduced as a first priority. Some Republicans are on record with the same concern and have stated that they believe only more limited cuts can pass.

Fact: By virtue of their year-end votes on spending bills, both parties proved that certain limited tax cuts can be achieved.

Fact: Senate leaders have caved in to Democratic demands for power sharing. The more conservative Republican senators have criticized Lott for the arrangement (more partisanship?).

Fact: Opposition (partisanship?) is now bubbling up in full display with cabinet hearings looming.

Opinion: I don't like the partisanship, but my assertion was that it was bound to happen. Politicians can't stop themselves.

Opinion: These circumstances will make it impossible for the full extent of GWB's proposals to pass.

I asked anyone to take the same set of facts, or bring in others too, and offer reasonable arguments for expecting that the package will win full approval. Michael tried. I don't agree with his outcome, but he made some logical arguments. Any others?

 

[Michael]

jjm - I just had to bump this. Isn't Mr. Greenspan doing just what I said he was going to do?

Michael