We are screwed ( NSR )

[board]

This is a perfect example of why career politician's are dooming your future

WASHINGTON, Sept. 22 - Putting aside efforts to control the federal deficit before the elections, Republican and Democratic leaders agreed Wednesday to extend $145 billion worth of tax cuts sought by President Bush without trying to pay for them.
At a House-Senate conference committee, Democratic lawmakers abandoned efforts to pay for the measures by either imposing a surcharge on wealthy families or closing corporate tax shelters.
"I wish we could pay for them, but this is a political problem and we have people up for re-election,'' said Representative Charles B. Rangel of New York, the senior Democrat on the House Ways and Means Committee. "If you have to explain that you voted for these tax cuts because they benefit the middle class and against them because of the deficit, you've got a problem.''
Fearful of being attacked as supporters of higher taxes, Democrats said they would go along with an unpaid five-year extension of the $1,000 child tax credit; a four-year extension of tax breaks intended to reduce the so-called marriage penalty on two-income families; and a six-year extension of a provision that allowed more people to qualify for the lowest tax rate of 10 percent.



This country even at the highest levels is running a credit card mentality " let's party now and damn the future " I predict a generation civil war in the next 25 years. Medicare and social security are currently being managed on a level of honesty about equal to a pyramid scheme. This house of cards will collapse and if you are 45 or younger you will be under it.

here is the rest of the article: http://www.nytimes.com/2004/09/23/po.../23tax.html?hp

[mr_gyptian]

You're complaining about middle class tax breaks?

your complaint is an echo of the 80s scaremongering. Remember the deficit ticker?

The economy runs in cycles. down the road, taxes might increase. programs might be cut. the economy will boom and all will be fine. (not necessarily in that order)

generational civil war? riiiiiiiiiight.

[Telenater]

The economy runs in cycles. down the road, taxes might increase. programs might be cut. the economy will boom and all will be fine. (not necessarily in that order)

Bull shit. That's the same logic as living off your credit card now because you're going to get a better job next year. Sometimes that might be true, but it isn't a safe bet most of the time.

[Buster Highmen]

At least we're safe from Cat Stevens ever flying in US airspace. Who needs taxes on capital gains when we've got Capitol gains?

[grrrr]

People often forget that Reagans tax cuts didn't last through his second term. Reagan vowed taxes would raise over his dead body during the 1984 re-election campaign. It got him re-elected.

Taxes then went up in 1984, 1985, 1986 and 1987.

Even many conservative pundits expect taxes to go up after this election, regardless who gets elected. Reaganomics didn't work, and they won't work this time.

What is truly unfortunate is that neither candidate has given us any reason to expect that they will be fiscally responsible.

[freshie247]

You can't run a government contrary to all known laws of economics,accounting,common sense ,fiscal responsibility & business in general ,& then expect people that actually think to buy into it.The tooth fairy approach taken by congress & PARTICULARLY THIS EXCRABLE ADMINISTRATION ,is about as realistic as compasionate conservatism.

How does the right wing have the bravado to talk about how they don't want big government ,when the government is bigger than ever.They say they don't want big government in your back pocket. I agree,that's not good enough,they want it up your ASS!!!!!!!!!!!!!!!!!!!

[board]

You're complaining about middle class tax breaks?

.

I thought I spelled it out clearly ? What I'm complaining about is both democrats and republicans acting in a way that anyone with a high school econ class level of education knows is doomed to catastrophe ! "I wish we could pay for them, but this is a political problem and we have people up for re-election,'' you have politicians KNOWINGLY voting for a bill that is fiscally irresponsible because they fear not being reelected even though it's the right thing to do. once again you are so damn partisan what immediately comes to your mind is " how can a screaming liberal democrat like board not want middle class tax cuts ???" I am a liberal because of my INDIVIDUAL decision making on each issue, not liberal and therefore blindly adhering to those ideologies.

[joshbu]

You're complaining about middle class tax breaks?

Heh. Middle class. You're funny. A lot of people where I work have a LOT of money. The amount of money that this tax cut saves them is incredible: more than most middle class people make in a year.

And, no, if you were wondering no one here is planning on reinvesting a dime of that money in the economy: it's all going into the bank.

edit: UBB tag.

[13]

Blammo -- a dose of reality from joshbu.

Smart kid ... For UM alum.

[1080Rider]

They won't re-invest that $$$ because they're "republican," right? How do you know what they do w/ their $$$? How do you know that they don't donate to their church, local YMCA, or other charities? Yeah, maybe they'll invest most or all of the $$$ but I doubt you really know what the hell they're going to do. Plus, the AMOUNT they'll still pay in taxes would prolly shock you and I. But whatever, I think we should tax all rich people (read, republican's only) at like 77%. That would be cool.


Edit: commenting on the original post- it is fucked up!!! These people only want to retain their seat in the house. I would guess that most or all politicians are like this. They'll claim that "I can't do any good if I'm not in office." Well, if this is how you "do good" then maybe we don't need them in office. I'm really fed up w/ politics (and not due to the board- just the bullshit that goes on in general). These fackers waste more $$$ in a day than any of us make in a year.

[Clack]

That's the same logic as living off your credit card now because you're going to get a better job next year. Sometimes that might be true, but it isn't a safe bet most of the time.

Or taking a student loan?

[joshbu]

OK. The thing about rich people is that they got there either by scrimping and saving their whole life, or because they inherited and are now safe guarding the family fortune. It may SEEM like they are spending a lot, but % wise, as you go higher up the wealth ladder, people spend less and less. (Or they don't stay rich long: eg rock stars)

Also, charitable donation follows the same curve: with the notable exception of Bill Gates, pretty much everyone else on the Fortune 500 is not giving the same % as lower class citizens. They certainly ain't tithing 10%!

Now, the cut is exactly opposite: the further up you go, the higher the % gets. (Not even counting the dividends tax break.)

Finally, assume that people will continue to spend and donate at the same % levels as they did before the cut (they always do.) And you see what I mean.

[trainnvain]

This is classic. A totally bipartisan thread is smelling the threat of becoming a split issue and the parrot is leading the way. Shocker.

[Mcwop]

From Econopundit
As promised earlier, I've begun to explore implications of the current tax cut, which has been variously reported as $150B, $145.9B, and $131.4B over ten years.

Approximating the cut at $15B per year, one's first job is to figure out exactly how to plug this number into the Yale econometric model. At first glance this is no easy matter. The basic federal government exogenous variables Fairmodel allows you to modify are:

COG - Purchases of goods (real)
D1G - Personal income tax parameter
D2G - Profit tax rate
D3G - Indirect business tax rate
D4G - Employee social security tax rate
D5G - Employer social security tax rate
JG - Number of civilian jobs (millions)
JM - Number of military jobs (millions)
TRGH - Transfer payments to households (nominal)
TRGS - Grants in aid to state and local governments (nominal)
SGP - Fed. gov. surplus (+) or deficit (-), NIA basis (nominal)

None is exactly right for the job, so I followed the following procedure to get an approximately correct "setting" for the D1G variable. (1) I increased SGP on an annual rate basis by $15B for each quarter (2) I let the model compute D1G values that would have generated that result, and (3) I re-ran the model using an average of these values for the D1G setting best approximating regulations enforcing current tax cut proposals.

Here are the results of the initial "D1G computation" run:
http://64.78.48.77/_taxcutsimulation.GIF

What this tells us is a deficit increase of $15B per year -- if forced to change nothing but the personal income tax rate -- generates an average change in the D1G parameter over the prediction period of -0.00163. This is is the number I then used in a re-run of the model to simulate the tax cut.

So: to generate the new run I added -0.00163 to each of the preexisting D1G values. (Note: be careful to follow the program's instructions here: "Enter a value above and press the return key to affect the change locally. Click [the 'commit to changes'] button to store the new values to disk". Not noticing the highlighted words in these instructions can cause some confusion.

After pushing the "solve" button the results come thru. First, with regard to the deficit:
http://64.78.48.77/_simdef.GIF

This "dynamically scored" tax cut winds up increasing the deficit by an average of $13.5 B over five years. Most, but apparently not all, results from reduced federal revenues:
http://64.78.48.77/_simrev.GIF

The revenue loss amounts to an average of -$11.5 over five years -- what accounts for the $2B difference? Employment, corporate profit taxes, investment (despite mild interest rate effects), and everything else I've looked at all seem to move in a positive direction.

The answer turns out to be easy. It appears to be (doh!) federal interest payments, which (of course) go up with higher interest rates and a higher level of debt:
http://64.78.48.77/_interest.GIF

More results, elaborations, qualifications, to come soon. Meanwhile, you can access my dataset by opening the Fairmodel data set "EconoPundit_tax_project" with the password "expim."

[meatdrink9]

I know this doesn't necessarily exactly speak to the issue at hand, but I'm all for tax cuts for the rich. Lord knows they pay 10 times more per year than the average citizen (in actual dollars not percentage points). Why punish those that worked harder? My wife and I work our asses off and we're taxed up the ass. On weekends I'm working on my house or maintaining another house or doing freelance after work (like tonight). So because I want to better my life and the life of my family I now have to pay more than the guy who spends his free time drinking beer in the alley? Why punish those that work harder? When my wife works overtime they tax her so heavily that the extra half time that the company includes almost gets swallowed completely. How are you going to punish people for working harder? It makes no sense to me.

Taxes are out of control. As a politician if you cut government jobs you're evil. If you create more bullshit government fat jobs you're a hero. But then the deficit goes up. So you tax everybody. Hell, I'd be fine with taxes if I could choose where mine went. The ultimate vote is money. If you could fill out specific programs you wanted your tax dollars going towards that would kick ass. Obviously a certain degree would be needed for basics, but I sure as hell wouldn't be funding a war in Iraq. Then partisan politics wouldn;t be so out of control. The dems can fund the projects they'd like on their tax forms and rupubs could do the same. They're both represented by the dollars they put in. Now somebody will quote a dead sailor that tried this 72 years ago when we all found it couldn't work after his rubix cube started spurting blood, but damn anything has got to be better than what's going now.

[/md9 hates paying more for working more, the lazy guy should pay the same]

[slim]

At least we're safe from Cat Stevens

Tax cuts or no tax cuts, Cat Stevens will still hate all our infidel asses.

[Mcwop]

I know this doesn't necessarily exactly speak to the issue at hand, but I'm all for tax cuts for the rich. Lord knows they pay 10 times more per year than the average citizen (in actual dollars not percentage points). Why punish those that worked harder? My wife and I work our asses off and we're taxed up the ass. On weekends I'm working on my house or maintaining another house or doing freelance after work (like tonight). So because I want to better my life and the life of my family I now have to pay more than the guy who spends his free time drinking beer in the alley? Why punish those that work harder? When my wife works overtime they tax her so heavily that the extra half time that the company includes almost gets swallowed completely. How are you going to punish people for working harder? It makes no sense to me.

Taxes are out of control. As a politician if you cut government jobs you're evil. If you create more bullshit government fat jobs you're a hero. But then the deficit goes up. So you tax everybody. Hell, I'd be fine with taxes if I could choose where mine went. The ultimate vote is money. If you could fill out specific programs you wanted your tax dollars going towards that would kick ass. Obviously a certain degree would be needed for basics, but I sure as hell wouldn't be funding a war in Iraq. Then partisan politics wouldn;t be so out of control. The dems can fund the projects they'd like on their tax forms and rupubs could do the same. They're both represented by the dollars they put in. Now somebody will quote a dead sailor that tried this 72 years ago when we all found it couldn't work after his rubix cube started spurting blood, but damn anything has got to be better than what's going now.

[/md9 hates paying more for working more, the lazy guy should pay the same]

Bingo. It has always been about the government spending, which is an area that Bush has failed miserably. The only time in recent history that spending was held to reasonable increases (even some cuts) was during the 90's. My wife stopped doing her overtime at the hospital (she is a nurse; nursing has a bad shortage too), becuase each additional dollar is worthless compared to the extra effort. We are not rich.

I feel for you on the freelance stuff, which you probably have to pay the self-employement tax , which pushes the marginal rate on each freelance dollar to around 45% when you include federal, state, and payroll taxes.

[365wp]

Self-employment taxes got me the first time I did freelance stuff.

But there are ways to make the situation work to your advantage. If you're doing work for somebody else, form a LLC. The tax rates are way lower than the self-employment tax, I think it only costs $50 or so in CO (as opposed to MA, where it's $450 to sign up and $500/yr ), and you can start deducting expenses like hardware and software. Find a good accountant who can help you out.

Also, I just came across this:

If you get a second mortgage and use it all for home improvement, that is also considered acquisition debt.

Now I'm starting to think about getting another loan for all the work we'll be doing on the kitchen in our place...since the interest would be deductible.

[1080Rider]

I'm in w/ MD9 on this one. I know the "flat tax" has been brought up and that nobody thinks it'll work but its because they wanted a flat tax w/ exceptions. If you just throw a flat % tax on every person earning a wage and every corp turning a profit, I bet the rate would be super low. I bet as it is now each earning corp/person only pays 10% (when the amount of collected taxes are divided by the amount contributing- obviously the ditch digger prolly pays less than this and microsoft pays more). So if you did away w/ the loopholes it'd prolly make it lower, and more fair, across the board. Next, get rid of taxing $$$ passed on to kids!!! For fuck sake, if my dad builds a million dollar corp, sells it before he dies, and gifts it to me, why in the fuck should that be taxed??? He paid taxes on the $$$ when he made it, so leave it alone when its gifted/inherited.

MD9- if you're finding you're doing enough freelance stuff, start writing off EVERYTHING. Lease a car- write off, buy a computer- write off, make one room of the house your office- write off, take a friend to lunch (who happens to be a client)- write off.

And, going along what 365 said, for our generation, the safest thing we can invest in is our house. Our houses will never depreciate (though our IRA's and retirement funds just may- when I left the firm I was at, my retirement account was making -22% per year for me). If you build a good amount of equity you'll be able to use the capital gains deduction right around retirement to supplement your retirement. Just something to think about. Past that, all we can do is work our asses off!!!

[board]

Ok guy's I want everyone to feel free to discuss whatever interests you about this topic however please do not lose sight that the reason I posted this had nothing to do with higher taxes, lower taxes, unfair taxes, etc simply that politicians on both sides are pandering to the electorate in lieu of anything resembling common sense. This could be about any subject frankly. We should all be frightened that Dems and Repubs are both more concerned about their reelection than what is truly good for the country. This is why I was ranting the other day about the uniformed electorate.

MD9 - prepare to get an earful from me on sat !

[1080Rider]

I've posted this story before but it really is a good one and it telling how the system corrupts. Politicians really are in a shitty position. If they think they can help us then they have to be in office. To get/stay in office, they need to get $$$, sometimes from places they may not like.

I had a poli sci professor at SDSU who ran for a city council position. He lived in a jurisdiction w/ residential zoning. There was a vacant corner where someone wanted to put a gas station, I imagine a little zippy mart. The local residents objected as did Prof. He promised that he wouldn't allow the zoning to change, this would keep the gas station out. Everyone's happy about this. It gets to about 1 month from the election, he's trailing in the polls. Gas station guy calls him up. They meet, Prof's offered $100K for his campaign. Prof REALLY needs this $$$ to get into office. He has nothing left but needs to make a strong push to make up some ground. Obviously Gas man wants him to change the zoning but never makes it a speific condition for the $$$. Just a check for $100K and a wink. Prof takes the $$$ and loses. He never had to make the decision to change the zoning but what would he have done?

Point is, he was willing to take $$$ from a person w/ goals totally opposite to his own platform. Prof was a good guy. I think he sincerely had problems w/ this but he really wanted to help everyone out and the only way to do that was to be in office. This is a REALLY small example but shows how corrupt the candidates/system is. I don't know the answer but the whole system right now is FUCKED UP!!! The election goes to the highest spender. PUBLIC OFFICES ARE FOR SALE. That's the biggest problem, and that's what we should be fighting.

[AntiSoCalSkier]

I'll vote for any politician that gives me tickets to the circus, and maybe some Wonderbread too.

[Tippster]

MD9 - you're right as long as your basic supposition holds up:

That all people who make less $$ than you are lazy, layabout abusers of the system.

Ask your employer's custodian, your garbageman, a road crew worker, or a Nanny how they feel about this. Ask them if they think this is unfair: the person "only" paying 35% of their $25,000 income (leaving them $16,500) or the poor guy unfairly paying 45% on his $200,000 income (Net: 110,000.)

Ask yourself who works "harder," and who needs a break more.

Yes I oversimplified the situation, but so does the rhetoric that says "rich people" are getting punished. I might be in the top tax bracket - but I also have the disposable income to pay for an accountant who finds ways to hide my money. We NEVER pay taxes on more than 70% of our combined take thanks to loopholes, tax shelters, and other non-standard deductions not available to the folks I mentioned above. My father-in-law is a wealthy man. He brags that as far as the Government knows he makes less than $50K a year, yet he owns 4 Corvettes, a vacation home at the Jersey Shore, and has no problems buying his wife "shiny things" for X-mas.

Who do you people think shoots down the whole flat tax idea every time it comes up? It certainly isn't the "poor" people, but those who will "lose" much more money by losing their deductions: the "rich."

[Grange]

Not long ago we had a bill come up for concealed weapons. Republicans wanted it Democrats didn't was the basic premsis (not 100% but close). Since the Republicans outnumber the Democrats the bill was passed only to meet the veto pen of the Democratic. Gov. Well and over ride vote was tried but failed by one vote. The deciding vote was by a Democratic Congressman. His reasoning for his vote was because he didn't want his parties Gov. to be the first Gov. to have a veto overridden. Now the shitty part of this story is that the deciding vote was cast by one of the Authors of the original Bill. If that isn't "politics as usual" I don't know what is.

[1080Rider]

I know board, I'm off topic again...

Tip- it was Forbes that proposed the flat tax last wasn't it? I don't think that guy is poor. I don't know if I agree that the "rich" don't want a flat tax. I think even the richest most greedy guy would say, "well if the garbage man is paying 8%, and that's all I have to pay, I'm in." And I know what you're saying about your father-in-law. I bet he's paying somewhere though. Maybe he only earns $50K from his corp and the corp owns all the toys but I'm sure the corp pays some taxes too.

Now if it comes down to it and the flat tax rate is like 35% for everyone, I don't think anyone will go for it.