Debate Over Bush-Era Tax Cuts

[guywithashovel]

http://money.cnn.com/2010/12/07/news...obama/?cnn=yes

Well, it looks like the cuts are going to be extended . . . unless they get stalled somehow.

[Rageaholic]

EDIT:

I saw a video of Obama's speech on this issue.

http://www.youtube.com/watch?v=UGlYxnJFNd4

I'm still pretty confused. Why extend the tax cuts for the rich? How does that help the middle class?

[protege]

I'm still pretty confused. Why extend the tax cuts for the rich? How does that help the middle class?

It doesn't. What everyone seems to be forgetting, is that these tax cuts...will benefit *all* of us.

[Andara Bledin]

It doesn't. What everyone seems to be forgetting, is that these tax cuts...will benefit *all* of us.

Only for the short-term, unfortunately. We'll eventually be paying what we're not paying now, and it'll hit those with the least far harder than those with the most.

^-.-^

[Fuzzykitten99]

This might help some understand the basics of economics by taking the rhetoric and emotion out of most of it, and it has been around in various versions, but the basic facts remain the same.



Suppose that every day, ten men go out for beer and the bill for all ten comes to $100 and If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." so drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected...They would still drink for free...But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'...They realized that $20 divided by six is $3.33...But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer..So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before...And the first four continued to drink for free...But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

This is a simplified example of how our tax system works. The people who pay the highest taxes do NOT get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start "drinking" overseas where the atmosphere is somewhat friendlier.

[Ipecac Drano]

Do you actually believe the crap you had Copy and Pasted from some neocon website? I'm sorry, I was hasty with that remark. Obviously, you are one of the top 2% so you can relate to other super-rich people and must defend them. I'm sorry.

[ditchdj]

Hell I've even heard some rich people in the news admit that they dont even need the tax cuts.

[protege]

This is a simplified example of how our tax system works. The people who pay the highest taxes do NOT get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start "drinking" overseas where the atmosphere is somewhat friendlier.

That's *exactly* what has happened. I've seen it locally, albeit on a smaller scale. Why is it that the city of Pittsburgh is losing population...but the areas *outside* the city...are for the most part, growing? The simple reason? Many residents, not to mention some businesses, got tired of the constant tax increases, said "fuck you," and moved.

...and before I get attacked for being in the "top 2%," let me tell you, I'm not. I can't see why I should pay a job tax (inside the city limits) of 3%...when it's only 1% or less out in the suburbs. Why should I pay massive property taxes inside the city...when a similarly-sized house (on a bigger lot, I might add!) in the 'burbs is taxed less?

[Ipecac Drano]

What people don't realize is how little programs cost them. Here is a breakdown of how much things really cost us:

2009 tax receipt for a taxpayer earning $34,140 and paying $5400 in federal income tax and FICA (selected items):

Social Security

$1040.70

Medicare

$625.51

Medicaid

$385.28

Interest on the National Debt

$287.03

Combat Operations in Iraq and Afghanistan

$229.17

Military Personnel

$192.79

Veterans' Benefits

$74.65

National Parks

$69.36

Federal Highways

$63.89

Health Care Research (NIH)

$46.54

Foreign Aid

$46.08

Education Funding for Low Income K-12 Students

$38.17

Military Retirement Benefits

$32.60

Pell Grants for Low Income College Students

$29.75

NASA Space Program

$28.09

Internal Revenue Service

$17.69

Environmental Clean Up (EPA)

$11.67

The FBI

$11.21

Head Start

$10.91

Public Housing

$10.50

Drug Enforcement Agency

$3.14

Amtrak

$2.23

Smithsonian Museum

$1.12

Funding for the Arts

$0.24

Salaries and Benefits for Members of Congress

$0.19

http://voices.washingtonpost.com/ezr...t_a_recei.html

[ditchdj]

What's even sadder is that when you try to speak out against the bullshit that the government's been doing, people attack you.

Then they wonder why nothing changes and things just keep getting worse.

[Fuzzykitten99]

Do you actually believe the crap you had Copy and Pasted from some neocon website? I'm sorry, I was hasty with that remark. Obviously, you are one of the top 2% so you can relate to other super-rich people and must defend them. I'm sorry.

Funny how you judge before you know the facts.

1. I am a single mother, two kids ages 4 & 7.

2. I am a Full-Time culinary student, graduating mid-May 2011 with about $35-36k in debt. I am 30 years old, and this will be my first completed college education degree, an AAS in culinary arts.

3. I am a co-proprietor (with my fiancee) of a retail cigar shop only opened 8 months ago. Due to a low sales environment from September through the end of November, I haven't taken a paycheck (regular salary amount set at $1200 gross monthly) since August 1st.

4. My fiancee lost his 6-figure job about 2 years ago this month. His severance ran out long ago and he's been on unemployment since then. The store has not generated enough revenue to pay him anything either. We are at about 60% of break-even point to be able to pay either of us anything. He has an MBA (that HE paid for out of pocket), with emphasis in project management and director-level management, 15+ years experience in his field. He has only been able to get 3 interviews in the last 18 months of applying for jobs daily. Even ones well below where he was at. They tell him he is over-qualified.

5. He took his WHOLE 401k and invested it into building the business-a little over $80,000. We still came in under-capitalized, and his dad is confident in our retail store concept and helped us with the rest.

6. My fiancee's truck broke down beyond reasonable cost to repair, about 3 weeks ago. So we are down to just my car. I drive 40 miles one way to school, 4 days a week. My car has 192,000 miles on it right now. The power steering went out of my car the next day and my dad helped me pay for that, which was nearly $300.

7. At this time, we live off of his net income (and our tip jar at the store) after he pays his ex for child support for 3 kids, of $1500 per month. Barely. Especially when we each have our kids over (totaling 5), and we pay for what they consume as well.

8. The IRS is after my fiancee for taxes for 2008 of over $15,000 (on top of the $45,000 he paid in paycheck deductions), but because he is now bringing in $24,000 per year, 1/3 of which goes to his ex-wife, he has no ability to pay.

Yeah, we are definitely one of the top 2%.

A saving grace at this point will be if I get hired at my internship site, which is possible, but a long-shot because the restaurant is a high-profile place in DT St. Paul.

[FArchivist]

Yeah, we are definitely one of the top 2%.

Then I fail to understand why you would be in favor of the Bush-era tax cuts, as they will not benefit you or your fiancee in the least. Especially when such noteworthy top two percent people like Bill Gates and Warren Buffett are saying that no, they will not benefit you, and they should go away.

[Ipecac Drano]

Funny how you judge before you know the facts.

The 2% comment is what's known as "irony". But, if you really want the "relief" to go to the obscenely rich instead of the rest of us, well, uh, okay...

[smileyeagle1021]

Hell I've even heard some rich people in the news admit that they dont even need the tax cuts.

And it doesn't take much to understand why. People who talk about trickle down don't understand how money flows... yes, rich people employ people, but who do you think buys the stuff rich people are selling that makes them rich... if you answered the 98% of the country that don't count as ultra rich, you're probably right. Of course Bill Gates wants his tax cut to go to the middle class, because if the middle class has more money they are more likely to buy his products. Same thing with the Walton's, if they are smart they are calling for tax cuts for the lower and middle class because who exactly shops at WalMart, it aint the rich.

[Fuzzykitten99]

Then I fail to understand why you would be in favor of the Bush-era tax cuts, as they will not benefit you or your fiancee in the least. Especially when such noteworthy top two percent people like Bill Gates and Warren Buffett are saying that no, they will not benefit you, and they should go away.

Because I don't pay taxes right now in the first place! Neither of us makes enough, even if we were to get married this year.

I do not and will not believe myself to be entitled to money I did not earn or put into the system (such as unemployment taxes). I do not believe it is up to 'the wealthy' to pay my way through life solely because they have more than I do. I work for what I want in life. NOTHING is ever owed to me that I did not earn beforehand. Those who have more than I do can do what they like with the money they have-I really do not care. I have NO right to tell them they HAVE to give it to others.

The tax cuts will ultimately benefit my store in the long run (if they become permanent), because it is set up as a C-corporation. At this time, we do not have any 'employees' other than myself.

Once our sales hit the amount where we can pay anyone, the person we hire will benefit because the less we pay in corporate taxes, the more we can invest in the business and the higher the raises we can give and the more we can pay out as a commission percentage.

If our store concept really takes off (and it seems to be doing well all things considered) and we are able to open another store location in another city, then that makes 2-5 MORE people that we can employ.

By starting this company, we now put in 12-14+ hour days, 7 days a week, and even staying open on some holidays-and at this point, it is unpaid. We are working for what we want. We don't expect ANYONE to give us anything except the patronage and business we earn honestly.

When the store gets to the point where we are not needing to work anymore and we are financially well-off, what gives you the right to say that because we are reaping the benefits of our sweat and time, we are somehow obligated to give more than half of it to those who DID NOTHING to help build our business to where we hope it is someday?

In the mean time, we donate items to local golf charities and silent auctions/benefits, and we recently paired up with the Tex-Mex restaurant in our same building and did a Toys-For-Joy tequila tasting in our lounge with all the donations going to the charity. We raised $250 in the 2 hours they were here, average donation being $5 per person.

Even though we could use the products to earn money on by someone purchasing them (we are still in the red, financially), we feel compelled to help out our community in the small ways we can.

Stop with the 'haves' vs. 'have-nots'. Methinks that you grew up in a materialistic family who never taught you to not envy things that others had, but instead find out how they were successful in achieving the level of income to do so.

I would love to have a restaurant on-par with Thomas Keller's French Laundry, or Tim Mckee's La Belle Vie one day. If I look at them and I am just jealous and angry at their successes because they may have had advantages I did or do not have, how close do you think I will come to that goal with that kind of attitude? I look at those chefs as well as others in the industry and I mimic every action and every attitude they show. I do what I can to learn FROM them and work my way towards my own place. My fiancees and my store's success will come from what we put into it, and I will have my place someday. Right now I am working to get there.

You know what your real problem seems to be? Laziness, bad attitude, and jealousy. Those three will always keep you down-and you will never be truly happy because you will always be worried about what you don't have instead of really seeing what you do have, and working towards what you don't. Yet you will always find ways of blaming others because that is exactly what the government wants you to do. Blame others rather than looking at your own decisions and actions that led you down the path. Sometimes bad luck hits. Sometimes it seems like you can't just catch a break. WELCOME TO REAL LIFE! It is NOT fair, no matter how much your mother tried to make it for you! Don't like it? Get a helmet and a kevlar vest, and I have a spare bukket for your tears. Butch-up Sally!

Some days when we have consecutively slow sales, we feel like giving up. But we don't. We keep plugging along. We keep trying. As long as people keep coming in the doors, we will find a way to stay open. In the mean time, we hang in there, and give it all we have, plus more.

Steve's education and experience (again, all paid for by working his way through school) in finance and project management and direction is definitely a far cry from owning and operating a simple retail store. He could be so mad at the world for his being laid off and displaced out of the only career he knew. But you know what? He was willing to try something new, even if it meant a HUGE risk. He went from gross earnings of $135k, working 12-14 hour days, to unemployment at $24k, working the same number of hours. He could be sulking and whining about how the rich get all the breaks, and how he got the shaft, no one wants to hire him, etc. But he was willing to downgrade his career and do something else until he is able to get back into the career he was in.