Poll: Bush's tax cuts..good or bad policy?

[CADsortaGUY]

Originally posted by: rchiu

Originally posted by: CADkindaGUY

<sigh> Did I just tell you that the "rich" will get a bigger amount...BECAUSE THEY PAY A BIGGER AMOUNT! It's a pretty simple concept to grasp....or atleast I thought it was
Well, the inheritance tax helps because it is essentially it taxes the transfer of money that doesn't represent a transaction.
The divident tax is basically a double tax.

CkG

<Double Sigh> If you give 10 cents back for every dollar any tax payer pays, yes then rich get a bigger amount because they pay bigger amount propotionally. But is that Bush's tax cut? Bush tax cut gives money back to stock holders and people with rich relatives. Those money only goes to the higher income group so it is not evently distributed. Is it that hard a concept to grasp?

No you are wrong. That money doesn't "only" go to the "rich". And yes THAT(ten cent argument) is Bush's tax-cut - look at the changes in the tax rates

And no the dividend tax is not double taxation. A corporation is a totally seperate legal entity from the stock holders so what is wrong with taxing two totally seperate entities? Plus dividend is not always related to profit, so how is taxing profit equals to taxing dividend?

You earn money - you invest in a company(take ownership shares) - the company makes profit and is taxed on that profit - you(invester/owner) gets a dividend and are again taxed. So you got taxed as a company "owner/investor" and you get taxed when you get paid a return on that investment.

Even if dividend tax is double taxation, so how does reducing dividend tax help the economy and if it is the best thing to do right now in this economy? Again the debate here is not about if the tax cut was the reasonable thing to do but if it benefits the economy.

Huh? /me looks at thread title...then back at your statement....

The dividend reduction will spur more investment - thus giving capital for businesses to grow and employ more people.

So I'll see your "double sigh" and raise it a "triple-dog sigh"

CkG

 

[rjain]

Um, this tax cut WAS spread evenly across all levels. It's just that a 10% tax cut on the rich is a BIGGER AMOUNT because they're already paying so much MORE.

 

[CADsortaGUY]

Originally posted by: DealMonkey
<triple sigh> Cad, when are you going to finally admit that Bush's tax cuts favor the rich? Just because Rush Limbaugh tells you stuff doesn't mean it's true. Seriously, a fair tax cut would be spread evenly across the income levels. Since when do the poor either (1) Own stocks for which a dividend tax cut would apply, or (2) Have wealthy relatives that they're inheriting money from? If either of these applied, they probably wouldn't be poor, now would they?

A truly fair tax-cut is one that affects everyone the same way. As in rchiu's example: $0.10 per every dollar paid.

How much in NET taxes to the "poor" pay? Hmm... Yeah - I guess we should just use incometax refunds as a weath redistribution vehicle .... oh wait -we already do

Net $0

CkG

 

[rjain]

The fact that dividends are being increased due to this change benefits EVERYONE. It may not give them a tax cut, since the money may be in a retirement account. It still gives companies encouragement to pay dividends and therefore gives fund managers a way to see if execs are cooking the books.

 

[DealMonkey]

Originally posted by: CADkindaGUY

Originally posted by: DealMonkey
<triple sigh> Cad, when are you going to finally admit that Bush's tax cuts favor the rich? Just because Rush Limbaugh tells you stuff doesn't mean it's true. Seriously, a fair tax cut would be spread evenly across the income levels. Since when do the poor either (1) Own stocks for which a dividend tax cut would apply, or (2) Have wealthy relatives that they're inheriting money from? If either of these applied, they probably wouldn't be poor, now would they?

A truly fair tax-cut is one that affects everyone the same way. As in rchiu's example: $0.10 per every dollar paid.

How much in NET taxes to the "poor" pay? Hmm... Yeah - I guess we should just use incometax refunds as a weath redistribution vehicle .... oh wait -we already do

Net $0

CkG

I didn't mean "poor" in the sense of those paying NO tax, I meant "poor" only in comparison to the uber-wealthy (and upper middle-class) who would be the ones to primarily benefit from dividend and inheritence tax cuts. After all, only 1/2 of all Americans even own stock. Most middle-class folks own stock via 401(k) plans and would not benefit.

 

[amok]

Well, that's your problem then, you think this tax cut was only "for the rich". Doesn't it make sense that if you are going cut taxes...that the people who PAY THE MOST might just get it? Have you factored in that the tax RATES were lowered ACROSS THE BOARD? To say that this tax cut was only for the rich is assinine - they pay more - they get a bigger amount cut. You pay little in taxes(amount) you get little(amount) cut. It's not a hard concept to grasp. If you cut only the lower income groups the rich WILL increase the amount(percentage) of the federal income tax burden which is already at 38+% for the top 1% of wage earners.

1. I don't believe in FORCED gov't income redistribution - so you can forget about your "social engineering" talk.

2. Let's look at who INVESTS in America's economy, who PAYS your paycheck, who CREATES jobs, SPENDS the most money. Yeah, I'd say the rich would spend it....you know...because they "already have enough money"

CkG

Cad, if you think anybody in the top 1% is actually paying 38% you are nuts . Because of the generous rules on dividends and capital gains taxes now in place, the top 1% probably pay a lesser percentage than the middle class. I know this. Almost 87% of my earnings this year will be from dividends and capital gains, and I would tend to guess that a lot of other people in my income range or above have a similar (or even more lopsided) distribution. If I pay a higher percentage in taxes than you do, I'll put "I Lick CkG's Arse Everyday AND LIKE IT" as my sig.

 

[DealMonkey]

Originally posted by: amok

Well, that's your problem then, you think this tax cut was only "for the rich". Doesn't it make sense that if you are going cut taxes...that the people who PAY THE MOST might just get it? Have you factored in that the tax RATES were lowered ACROSS THE BOARD? To say that this tax cut was only for the rich is assinine - they pay more - they get a bigger amount cut. You pay little in taxes(amount) you get little(amount) cut. It's not a hard concept to grasp. If you cut only the lower income groups the rich WILL increase the amount(percentage) of the federal income tax burden which is already at 38+% for the top 1% of wage earners.

1. I don't believe in FORCED gov't income redistribution - so you can forget about your "social engineering" talk.

2. Let's look at who INVESTS in America's economy, who PAYS your paycheck, who CREATES jobs, SPENDS the most money. Yeah, I'd say the rich would spend it....you know...because they "already have enough money"

CkG

Cad, if you think anybody in the top 1% is actually paying 38% you are nuts . Because of the generous rules on dividends and capital gains taxes now in place, the top 1% probably pay a lesser percentage than the middle class. I know this. Almost 87% of my earnings this year will be from dividends and capital gains, and I would tend to guess that a lot of other people in my income range or above have a similar (or even more lopsided) distribution. If I pay a higher percentage in taxes than you do, I'll put "I Lick CkG's Arse Everyday AND LIKE IT" as my sig.

Heh, heh. I bet Caddie boy would get a kick outta that. Seriously, Cad where do you get this stuff from? How do we really know that America's wealthy would spend the tax cut money and not SAVE it? Personally, I think they'd just save it, but if you have some proof that they're spending it - fire away.

Sounds to me like you're just floating theories, as usual. Just like the current administration. Didn't Bush say that tax cuts would create jobs? Hell, we're in a job-loss spiral at the moment. The economy's doing better, sure, but it's shaping up to be a job-loss recovery and not just a jobless recovery.

 

[LunarRay]

Originally posted by: naddicott

Originally posted by: LunarRay
Alot of stocks that pay dividends are held in 401k and other 'tax deferred' or roth ira (no tax on gain) so the middle or 401kers get to pay tax on the dividend anyway as I read the law.. when they retire. I read you pay tax on the full amount of the distrabution regardless of the nature (muni are tax free on the yield but you still pay tax as if it was taxable)

You don't pay tax on a Roth distribution (assuming it isn't early). With Roth, you still have to inclue the amount you are contributing on your income taxes the year you are contributing it. After the money is contributed into the Roth, however, that money will never be taxed again while you're alive, assuming you don't pull it out early.

If you have money to put into long term savings, and expect to be in a higher tax bracket when you retire than you are now, then a Roth IRA should be among the first places you consider putting your money. If you expect to be in a lower tax bracket when you retire - a regular IRA may be the better option.

That's my point! If you get a dividend that is now tax free no matter the vehicle used you lose. In roth you'd get the draw (speaking to dividends) tax free but it was already tax free. In 401K you'd get the draw and pay tax (speaking to dividends) on the entire draw but, the dividends were tax free and are now taxable. Again, I don't see in the statute a provision to adjust for non taxable income to derive taxable draw...

 

[CADsortaGUY]

Originally posted by: amok

Well, that's your problem then, you think this tax cut was only "for the rich". Doesn't it make sense that if you are going cut taxes...that the people who PAY THE MOST might just get it? Have you factored in that the tax RATES were lowered ACROSS THE BOARD? To say that this tax cut was only for the rich is assinine - they pay more - they get a bigger amount cut. You pay little in taxes(amount) you get little(amount) cut. It's not a hard concept to grasp. If you cut only the lower income groups the rich WILL increase the amount(percentage) of the federal income tax burden which is already at 38+% for the top 1% of wage earners.

1. I don't believe in FORCED gov't income redistribution - so you can forget about your "social engineering" talk.

2. Let's look at who INVESTS in America's economy, who PAYS your paycheck, who CREATES jobs, SPENDS the most money. Yeah, I'd say the rich would spend it....you know...because they "already have enough money"

CkG

Cad, if you think anybody in the top 1% is actually paying 38% you are nuts . Because of the generous rules on dividends and capital gains taxes now in place, the top 1% probably pay a lesser percentage than the middle class. I know this. Almost 87% of my earnings this year will be from dividends and capital gains, and I would tend to guess that a lot of other people in my income range or above have a similar (or even more lopsided) distribution. If I pay a higher percentage in taxes than you do, I'll put "I Lick CkG's Arse Everyday AND LIKE IT" as my sig.

No no - you misunderstood what I said the top 1% pay 38% percent of ALL Federal Income taxes that are collected If you read the whole sentence and the way I posed those statistics all through this discussion you would know what it means.

Uhh, and you can keep you sig empty

CkG

 

[LunarRay]

Originally posted by: rjain

Originally posted by: LunarRay
IF dividends are tax free versus taxed at 15%. The dividend income would not be taxed. I understood current law to eliminate tax on dividends.

That's a common myth.
Are dividends issued by 'C' corporations taxable to the receipient under current law?

You'd want to still pay into SS to secure the benefits

Ok, but what does that have to do with this? He's paying that tax, so he's entitled to the benefits of it.
In context, he'd still pay himself a salary but a lower one. To insure he met the 40 quarters then it would be not an issue.

Maybe not fudge the books but, some can take better advantage than others..

Eh? Decreasing the dividend tax to a sane rate makes it more reasonable to pay out dividends, making it more apparent who's cooking the books and who's not.

I understood the new tax stimuli package eliminated the tax on the recipient of such dividends that would otherwise be taxable under previous law.

I am aware of dividends paid to corporations who hold the underlying stock (under appropriate accounting provisions) as being 85% tax free under prior law.

 

[LunarRay]

Originally posted by: rjain
Um, this tax cut WAS spread evenly across all levels. It's just that a 10% tax cut on the rich is a BIGGER AMOUNT because they're already paying so much MORE.

What 10% tax cut was this? Are you speaking to the marginal tax rate on $ over X amount? If so, this also affects the middle class.

 

[CADsortaGUY]

Originally posted by: DealMonkey
How do we really know that America's wealthy would spend the tax cut money and not SAVE it? Personally, I think they'd just save it, but if you have some proof that they're spending it - fire away.

Sounds to me like you're just floating theories, as usual. Just like the current administration. Didn't Bush say that tax cuts would create jobs? Hell, we're in a job-loss spiral at the moment. The economy's doing better, sure, but it's shaping up to be a job-loss recovery and not just a jobless recovery.

Personally I think they'd spend it, but if you have some proof that they're saving it - fire away

tango anyone?

Sounds to me like you're just spouting more rhetoric BS, as usual. Just like the rest of the lefties. Didn't you say that the tax-cuts were "only for the rich"? Well...?

The economy is coming around - read this thread and comment there on the economy.

CkG

 

[naddicott]

Originally posted by: LunarRay
That's my point! If you get a dividend that is now tax free no matter the vehicle used you lose. In roth you'd get the draw (speaking to dividends) tax free but it was already tax free. In 401K you'd get the draw and pay tax (speaking to dividends) on the entire draw but, the dividends were tax free and are now taxable. Again, I don't see in the statute a provision to adjust for non taxable income to derive taxable draw...

I get what you're saying now. The people who couldn't afford to invest more than they were already in their 401K + IRAs (lower-middle-class mostly) are getting zero marginal benifit from the Bush capital gains / dividends tax cuts. Lower the tax rates on capital gains and divedends a little more, and there would be no point in bothering with 401K/IRA paperwork in the first place.
---------


amok - Nice to see someone benefiting from Bush's cuts acknowledging just how good they have it now, and that there's nothing particularly fair or egalitarian about the current tax structure. Reminds me of a petition going around to reinstate the inheritance tax that is mostly being signed by people who would be subject to it. The head of that movement is Bill Gates Sr.

In my opinion, taxes never will be fair, and some people are always going to feel mistreated. On the other hand, the last few rounds of tax cuts were more poorly thought out than usual, not linked to spending cuts, and sold to the public with a combination of politicized economic theories that no serious economists subscribe to and misleading statistical trickery. Truth, lies, and statistics... what else is new?

[edit: formatting]

 

[LunarRay]

Naddicott,
I get what you're saying now. The people who couldn't afford to invest more than they were already in their 401K + IRAs (lower-middle-class mostly) are getting zero marginal benifit from the Bush capital gains / dividends tax cuts. Lower the tax rates on capital gains and divedends a little more, and there would be no point in bothering with 401K/IRA paperwork in the first place.Personal tax cuts go back to Jan. 1. As a result, employees will see fatter paychecks during the last half of the year.
*********************
2003 tax cut highlights

Many parents will get an advance refund worth up to $400 per child this summer.

Married couples who pay higher taxes than they would if filing as two single taxpayers will see some of that "marriage penalty" disappear.

Investors will see the tax rates on their earnings drop, as the top rates on dividends and capital gains fall to 15 percent. Dividends are currently taxed like ordinary income at rates as high as 38.6 percent, and capital gains at 20 percent.



I was simply implying in my normal cryptic manner, that today you defer the tax on the receipt into 401K of dividends of 15% but, may pay (in real terms if this is possible to predict) 20 % on that portion that represents dividend income when it is drawn out. The 5% difference is the loss on the deferral. Given under any case the same amount went in and earned it is only when it is drawn out and at what rate you are in then that matters.



link

 

[rjain]

Originally posted by: LunarRay

Originally posted by: rjain

Originally posted by: LunarRay
IF dividends are tax free versus taxed at 15%. The dividend income would not be taxed. I understood current law to eliminate tax on dividends.

That's a common myth.
Are dividends issued by 'C' corporations taxable to the receipient under current law?

Actually, I don't know. Dividends paid by REITs are taxable as income, as is interest on bonds, so maybe there are more exceptions.

Maybe not fudge the books but, some can take better advantage than others..

Eh? Decreasing the dividend tax to a sane rate makes it more reasonable to pay out dividends, making it more apparent who's cooking the books and who's not.

I understood the new tax stimuli package eliminated the tax on the recipient of such dividends that would otherwise be taxable under previous law.
I am aware of dividends paid to corporations who hold the underlying stock (under appropriate accounting provisions) as being 85% tax free under prior law.

Right now dividends paid by your typical publicly traded corporation are 85% tax free. I know there are some special cases when it comes to largely-owned subsidiaries and stuff, and I don't know how that's changed.

 

[rjain]

Originally posted by: LunarRay

Originally posted by: rjain
Um, this tax cut WAS spread evenly across all levels. It's just that a 10% tax cut on the rich is a BIGGER AMOUNT because they're already paying so much MORE.

What 10% tax cut was this? Are you speaking to the marginal tax rate on $ over X amount? If so, this also affects the middle class.

The only tax cut that we've been discussing here. I don't know if it's exactly 10%, but it cuts rates ALL across the board and moves the thresholds around a bit, too, IIRC.