Is it a good or bad idea to keep the "middle-class" part of tax cut ?

[kentuck]

Try not to tie the idea to any of your favorite politicians, whether you are for or against. But, is it wise to do away with this part of the taxcut at election time? Is it a good idea to separate it from the taxcut for the top income earners?

If we can simply look at this from a political standpoint, which is important when you want to be elected, how does it appear to the average American? And shouldn't this be an idea that all the candidates could get behind?

What is the downside for repealing the taxcut? And what is the upside? In an off-year, it might sell if we could offer healthcare or some wothwhile benefit in return for the taxcut. Otherwise, we continue to give all taxcuts to the wealthy - at the expense of the working middle-class.

[SCantiGOP]

1. I never opposed the tax cut

I opposed the way it was done, but a tax cut targeted towards lower and middle income families would have been good for the economy. And, you're right that no matter how much sense it might make, it is never good to be talking about tax increases, or reversing tax cuts, during an election. I would like to see the Democratic candidate talk about "redirecting" the tax cuts.

[dembones]

2. The end of the GOP

Make income tax free until $30,000 single, $50,000 married. 10% rate after that up til $50,000 single, $75k married. Then go to 20% income above $75k single, $100k married. Once ya hit $120k single, $150k married, 40% tax rate. It would lower the taxes on everybody basically who are in the middle class, and let the wealthy take up the slack, but not enough to make it unprofitable for them to continue accumulating wealth.

[AP]

7. 40% starting at 150K? Uh, that's even more regressive and flatter

than the current rates. You know Bush wants to make the highest bracket start at 150K?

We need a PROGRESSIVE structure...more brackets, with people paying low rates in the middle and high rates at the top, and you need unearned income taxed at higher rates, progressively.

[SCantiGOP]

8. Right on, dembones

I have proposed your tax method on many occasions. It is fair, equitable and would be easy to enforce. The only case I can see against it would be the huge numbers of lobbyists, accountants and tax attorneys who would have to look for another line of work. While we could discuss the relative merits of the income/tax levels you propose, the basic methodology is sound.

[AP]

14. It is highly UNFAIR!!!!

We need something like this:

0% $0-50K
3% $50-75
6% 75-110
9% 110-180
17% 180-250
20% 250-400
30% 400-900
35% 900-1.5 m
37.5 1.5-3 m
38.5 3m-5m
40% 5-10m
45% 10m-15m
46.6 15-18m
and it keeps goin in increments like that.

GET THE PICTURE?!?!

PROGRESSIVITY.

and those are the corporate and individual rates, and no more separate rates for cap gains and dividend income. It all goes into earned income and is taxed progressively (or you have separate progressive rates for those forms of income).

And I don't care if you have complicated deductions and credits which promote socially valuable behavior. Anyone who isn't willing to spend an hour or two figuring out the math to save $1000 is an idiot.

[pansypoo53219]

22. is this all income?

as the rich make their $$ on investment and NOT actually working wages. and higher cap gains tax will stop short term sell for profit. but no double taxation then.

[AP]

28. Double taxation is a red herring.

Money is always taxed where it changes hands -- where it circulates -- and that's a good thing. If you didn't tax one avenue where it circulates, the rich would make sure all their money changed hands via that method. The poor who don't hape the option of dictating how they get paid, will get the shaft (eg, 40% marginal rate on earned income!).

As for cap gains, either have them included in earned income, have a % included in earned income, or have a separate PROGESSIVE rate scale for cap gains, which somehow considers how much other income you receive.

[realFedUp]

18. Yes

rescind the one on the really rich.

[elifino]

40. "the end of the GOP"

I like it, better than what we have now. A step in the right direction.

[AP]

41. "better than what we have now"??? HELLO? This is basically what

Bush wants to do. He wants to lower the bottom of the top rate to 150K and they wouldn't mind top rate on earned income which is higher than the one we have now because they know the rich are going to get all their income from sources other than unearned income (like the new 15% rate on dividend income).

[Dhalgren]

3. I say repeal the tax cut, period.

No one is being asked to return the money from the Bush give-away-to-the-rich, they just won't get it again. The poor and the middle class didn't get enough to make much of a difference and maybe it's time again to ask Americans to make some sacrefices. Our nation is circling the drain, we have to get a handle on this shit or we are gone. If the people of this nation can not understand that a few dollars in the pocket now is not worth the destruction of our childrens' future, then maybe we should just pull the plug and the last one leaving should turn off the lights (if there are any lights left).

[kentuck]

5. But would it be wiser to do it the way the Repubs do it ?

The first year after we are in power...not before the election?

[Dhalgren]

32. You may be right, from a purely political p.o.v.

But I just hate being that way. I know that many folks will say that you can't tell "the people" the truth, because they just won't follow the hard choices. That may be so, but it doesn't sit well with me.

[AP]

4. The more progressive the tax code, the more the economy will grow.

The single biggest problem with the economy today is that America is a country which shifts a huge burden on the middle class (through low waages, fewer opprortunities to get wealthy, pension fund rip offs, credit policy, and the tax code) and shifts all the benefits (copy previous list and insert here).

ANYTHING done to help the middle class, especially with regard to the tax code, will help the economy. And because it's good for the economy, any democratic politician would be wise to figure out a way to convince the public that's the case.

[HFishbine]

6. Depends

It depends on what's being proposed on the spending side. It's wrong to run an astronomical deficit. Either cut programs or raise taxes.

[AP]

9. FDR would disagree & if progressivity made economy grow,

the defecit would shrink.

[HFishbine]

30. AP

Yes. You are correct. There are indeed exceptions. Deficit spending that fuels economic growth can be beneficial. What I meant, although it was admittedly not stated, was that running up astronomical deficits without a substantial portion of the spending going toward growth inducing strategies is wrong. Thanks for the call.

[Walt Starr]

10. I remmber polls back in the Clinton era of prosperity where

the majority of the Middle Class were willing to pay higher taxes in order to cut the deficit and work towards getting the country out of debt.

[NewYorkerfromMass]

13. Yeah but we weren't in a "jobless recovery" then

Kerry is right to say 'let's not stick it to the middle class again' and get the money BACK from Bush's well heeled country club buddies.
When the economy gets back on track we can think about raising the taxes again.

[sam sarrha]

11. i believe that the poor and the middle class pay about 70% of the income

taxes... if they dont pay it who will? personally i would rather give back the $300 tax refund if my wife and I could have our jobs back.. we were making $76,000 now we get $350 combined a week and there are no extensions. and NO jobs, we are 55 years old we only got good jobs since Clinton was president. now we lose our house to the Recession Bankers scheme. I never supported the tax cut, and was dancing in the street over paying down the Debt, which is a give away to the banks.

[AP]

16. actually, it's closer to 15%, but the real crime is that

no matter what you're income, all americans pay in the same range of between 14 and 18% of their income on all taxes, and there's no pattern or progressivity to it. The rich get a totally free ride in America, and many of their gains come from the fact that we deliberately transfer wealth from poor to rich.

A competitive American economy which burdened people fairly would create so much MORE wealth, especially for the people who chose to compete fairly in it. Don't believe me? Watch Europe for the next 40 years.

[kentuck]

19. I agree AP that there is no progressivity to it....

It seems to me that this is the best way we have to fight the powerful. Let them pay the taxes. Let the Democrats be the Party of middle-class taxcuts and the Repubs can be the Party of upper-class tax cuts. Then we can work on a balanced budget to make sure they don't try to charge everything to the future taxpayers...

[AP]

20. Get rid of the whole tax-cut/raise dichotomy. Dems are the

party of progressive taxation and Repubs are the party of regressive taxation (regardless of whether you have to raise or lower taxes to do it).

[prolesunited]

25. I am so sorry to hear about your situation

I hope we can all help turn it around soon. Unfortunately, there are far too many stories like yours out there.

[Yupster]

26. Poor/middle class pay 70 % of income taxes

I guess it all depends on what you mean by poor and middle class. If the border between middle class and wealthy is $ 250,000 a year, then I guess maybe could say that, but looking at the numbers, no the poor and middle class do not pay anywhere near 70 % of the taxes. In fact the top 5 % of tax-payers pay over half the total taxes.

Some will move the numbers by throwing in payroll taxes which is fine, but then you would need to say income and payroll taxes.

I did a quick search and came up with an AP story from a site called Mr. Cranky.com, which apparently is a movie review site of all things.





http://www.mrcranky.com/movies/clockstoppers/110.html

[kentuck]

27. What specifically is the difference in payroll and income taxes ??

Are they used differently? Is one of them in a lockbox? Are they spent for different purposes? I would think they are identical except in name?

[Yupster]

33. Difference is only in name IMO

the post I was answering (Sam's post # 11) specifically said income tax. As I pointed out in my reponse, if he (she?) would have said income and other taxes, it would be different, but to the statement that lower and middle classes pay about 70% of "income" taxes, well that's not even close to being accurate.

[uptohere]

46. they are different

they are seperate. The fact that the so-called SS surplus is being raided and IOU's left in their place does not make that money simpply General Fund money. Its plunder. The medicare part of payroll taxes goes for that program.

And that doesn't even go into the legal basis of these taxes.

They're quite different with the exception that they lower your paycheck same as any other deduction from it.

[kentuck]

53. How does it make it "not simple General Fund money"?

Is it not used in the General Fund? We can call it the horse's ass tax and it is still spent as general fund....

[AP]

29. Throw in sales tax, property tax, license fees, (ie, ALL

gov't taxes, federal, state and local) and you get a different picture.

The fact is, we have a pretty regressive overall system of raising revenue in this country which really hurts the poor and helps the rich. It's beyond debate. There was a study of all taxes in all states, and there are only three states in the nation which place a higher tax burden on the top third income eaners compared to the bottom third.

[Yupster]

36. Then Democrats have to shift the tax debate away from

who pays what income taxes to who pays what other taxes.

[unfrigginreal]

12. You could probably make a case for either position.

What aggravates me though, is DEMOCRATS suggesting that repealing Bush's tax cut would represent a "tax increase." I would bet that probably upwards of 90% of the folks on this board opposed those tax cuts...but now, because we're in a political campaign, they'll trash the guys that want to repeal them.

I've always felt that we as a party gave too much sway when it came to tax cuts...instead of letting the Repukes design them to favor wealthy Americans, we should be out front pushing for tax cuts that favor the lower and middle classes.

But I'm not one of the Kool Kids, so what do I know?

[kentuck]

15. I agree...

I don't like the idea of referring to those for repealing the taxcut as favoring a "tax increase" on the middle class. I don't think that is productive.

[AP]

17. We should have been opposing bush's regressive tax structuring

we shouldn't have been thinking of it as tax cuts.

And we should be excited about the opportunity to create some progressivty now.

Calling them tax cuts and tax increases is totally the wrong characterization of what is going on.

Bush's goal was to make the tax code more regressive. The middle class breaks were only to get people to shut up and not complain about the HUGE breaks for the wealthy.

Now America has a chance to keep the bribe, but undo the reason they were bribed. (America can have its cake and eat it too.)

[sangh0]

24. And that's why we should keep the MC tax cut

Though not a huge effect, the middle class tax cut makes income taxes slightly less regressive, and it's good electoral politics.

[unfrigginreal]

35. More like it's politically expedient...

for certain candidates.

[sandnsea]

39. I like your thinking on this

I call them tax shifters.

My concern is this regressive/progressive tax thing is going to be lost on average Americans. Whoever up above said the Democratic Party cuts taxes for the middle class while the Republicans cut taxes for the corporations and upper class is a bit easier to grasp. Actually, middle class and corporations is the easiest differentiation.

Truthfully, I've seen Dean quoted as not cutting all of them either. Posted two articles before from 2003, and here's another one from 9/2002:

TT: You’d reverse Bush’s tax cut, I gather…

Dean: Not all of it, almost all of it…

So I really don't know what his position is on taxes. I just worry we'll lose a ton of tax cut voters by repealing everything.

[demnan]

21. I'm in the 80K bracket t and I didn't get much of a tax cut

I wouldn't miss what little I got (about $20 a paycheck or $10 a week).

I think the question is, would I rather have a tax cut now or social security later?

I'll take the social security, thank you. (And Al Gore's lock box)

[kentuck]

23. And you pay FICA taxes on 100% of your income...

It is those above $85K that are getting the tax break from not having to pay FICA taxes...That needs to be figured in the tax equation.

[Yupster]

38. My pet peeve is

the priviledged workers (schoolteachers mostly) who don't have to pay FICA on any of their income.

Throw them back into the system and social security would be in much better shape.

I don't have any idea why they were allowed to not be in social security in the first place. I thought it was supposed to be a universal supplementary retirement program for the nation.

[unfrigginreal]

42. Wow! Is that true?

Schoolteachers don't pay FICA taxes? Man that show's how much I don't know. I would absolutely respect a candidate that came out and said that was wrong.

[Yupster]

50. Yeah -- a Democratic candidate is going to tell teachers

that they should be in social security and ditch their much better system for themselves. Yeah that's real likely.

Every state is different, but here in Texas, the TRS formula is such...

years experience X 2.3 = % pay (average three best salaries)

so, if you were 62 years old and had worked 38 years as a teacher (started age 25), and your last three salaries averaged $ 48,000, then your TRS pension would be

38 X 2.3 = 87.4 % of $ 48,000

or $ 41,952 per year with cost of living raises passed on from the state legislature.

If this same teacher was in social security instead of TRS (like the rest of us poor schmoes), then she/he would get about $ 17,000 per year from social security.

Note - the teacher puts in exactly the same percent of her pay into TRS as a not priviledged worker puts into FICA, and the school district matches just like an employer would match FICA.

The fact is though that since teachers' unions are such a huge important special interest group to the Democratic Party, and sometimes more than a third of all the total delegates to the national convention are teachers, that teachers will be allowed to keep their special carved out system for themselves and let the rest of us pull an unfair burden of the nation's retirement costs.

I can explain why teachers having their own special system screws the rest of us, but this is an already long post. If anyone is interested, I'll make another post.

[AP]

43. FICA is part of the problem. You don't want more people paying

this unfair, regressive tax.

Also, who says teachers don't pay FICA? I highly doubt the accuracy of this claim.

[Yupster]

51. Each state is different AP

in fact, each school district at one point had the option of choosing whether to be in or out of social security (late 70's I think - but it was just a few years before I started teaching in 81). Most chose to get out (Duh).

Anyway. most teachers are not in social security. Since I live in Texas, let me use it as an example...

Here's a website that lists all the districts in Texas that do pay social security.

http://www.atpe.org/EduIss/ssParticipate.htm

There are about 30 of them I don't know how many districts there are in Texas, but there are 256 (?) counties in the state and there is an average of at least 2-3 districts per county. Where I live (Midland County), there are three districts near by (Midland ISD, Greenwood ISD, Ector County ISD) None of them pay social security. The nearest district that does is Iraan- population 2,000 (named after a couple Ira and Ann) which is about an hour and a half drive down the highway.

I really thought the fact that teachers were largely not in social security was fairly well known by now. I'm kind of shocked that I'm dismissed with a "I highly doubt the accuracy of that claim."

And by the way, if teachers have it good, professors have it way better. There's a program called the optional retirement program (ORP)where teachers can take the amount that would have gone into social security or TRS and invest the entire amount (matching part too) in mutual funds. In effect, professors already have the privatized system that their union warns against allowing anyone else to get.

Of course, because they like the system the way it is now with all us shmoes pushing the wagon while they sit and watch.

[AP]

54. They pay into some other retirement program, righ?

It's not like they get a free ride. Maybe the get a better ride, but that's the investment you put into education. The US is never going to be able to reproduce a wealthy economy if we don't make an investment into education (eg, attracting good people to the field of education).

And, again, it's insane to argue that life would be better in America if MORE people were paying into ANY tax scheme as ridiculously regressive as FICA.

[Yupster]

56. So your contention is that ...

1) each occupation should be able to carve themselves out their own retirement plan and get out of social security?

or

2) only certain occupations should be able to carve themselves a special deal. Those special occupations to be chosen by .... someone?

And yes, paying into FICA is very regressive, but coming out the benefits are very progressive.

Especially if you are a white woman. If you are a black man, you're screwed of course.

[AP]

57. My contention is that we should have fewer regressive taxes and

more progressive taxes, and if teachers can get out of this one, more power to them.

Look, public education has benefits that are realized way too broadly, and way to far into the future. If we have to make investments in education through schemes like this, I say good.

I can't think of many other profession which require so many employees and whose benefits are reaped so broadly that they'd make sense to receive concessions like this.

I definitely don't think stock brokers desrve this kind of public subsidy.

Perhaps cops and members of the armed services do.

[Yupster]

58. Okay, you made your argument very clearly

"If teachers can get out of this one, more power to them."

I don't agree with you, but I understand.

I just think about how many people depend on social security. The eight-year old who lost her father in a car accident, and the woman unable to work because of a horrible disability. I really am willing, and even happy to make my social security payments to help these people. I really see it as an opportunity.

I'm pretty religious and the part of the bible that hits me the hardest is where Jesus told the guys that they will get into heaven because when he was hungry they fed him and when he was naked they clothed him. And they asked when did we ever feed you when you were hungry, and he said when you fed the poor, you fed me, when you clothed the poor, you clothed me.

Social security is a shared burden, but it's also an opportunity to participate in a system that helps people who need help very badly. I'm glad to help. I really am.

I'd hate to ever hear myself saying, "hey I got out. More power to me."

[Media_Lies_Daily]

44. Not true. Both of my parents were school teachers and they paid FICA...

...on every single cent that they earned.

Where did you hear this information?

[elifino]

47. school teachers and FICA

Not all teachers elected to get out of Social Security. My wife retired after 30 years teaching in Georgia, allways paid FICA.

[Yupster]

52. Very correct Media and elfino

school disricts were able to "elect" whether they wanted to be in social security or not. Most of course chose not to.

But hey, I'm a stockbroker now. You think if we stockbrokers with our high average salaries had the chance to "elect" to make our own retirement system and say bye bye to social security we wouldn't jump at the chance in a NY minute? Of course we would, but that "election" would never be given to us. We're not prililedged employees. Only teachers (and some state workers I think) are so priviledged.

I would vote to stay in the system anyway because I know that lower paid hard working people depend on the relatively large amounts I put into the system to help supplement their retirements since the amounts they have been able to put in is much smaller. I also know that there are kids who depend on social security checks when they have a parent die. I also know there are disabled people who depend on their social security check to live a life without humiliation.

I'm willing to take less than I should because I am conscious of others I need to share with. I just wish teachers would be behind the wagon pushing with me instead of sitting on the side watching saying that hey, they got theirs.

[rock]

31. Rescind it all

If it came from this misadministration, we can generally assume that it's a bad idea.

[AP]

34. That's just cutting off your nose to spite Bush's face.

You've been handed on a silver platter a win-win situation. Polically and economically, we have a chance to get something good. Don't let blind anger force you to lose this opportunity.

[PATRICK]

37. The divide on this issue

is between the candidates with the experience to work through Congress and those who want to work over Congress. This is one issue where it might have been essential to get on the same page. They should tie the cuts to the Bush idea of "stimulus" not permanence and the need to save the nation from deficits and deterioration of services. Keep the cuts fornow since cuts for the middle class and little guy goes into the economy more productively. And if you need the "stimulus" that means the economy is Bushwhacked unhealthy. A win-win if the publicity gods smile a bit.

That helps keep hammering it into the thick fuzzy skulls of workers that there is a very satisfying alternative to sacrificing everything for welfare queen corporations. Otherwise you immediately retreat to a light versus dark battle(which it may be)with the people still bamboozled and ironically lumped in as fiduciary allies with the wealthy(a wealth by association Bush strategy).

Dean may be absolutely right and honest. It would seem to be taking a great leap though to bring the people AND the Congress in their current mentally beseiged state to a Mondale state of reason. You don't have to say you are raising taxes to get burned on this one.

[leftyandproud]

45. lets get real!!

we don't need the tax cuts...repeal them ALL!!! the government is going bankrupt under shrub!! Where are our priorities? It's time for everyone to sacrifice a few thousand extra each year to keep the USA from going down the tubes.

[AP]

49. Wrong argument. We don't need the REGRESSIVITY! Make the tax code

progressive.

Bush's tax cuts were wrong mostly because they shifted the burden to the poor and middle class, notwithstanding the middle class tax cuts.

Of course, they want to starve and strangle the federal gov't by cutting off the money. But lets take progressivity first, and then work from there.

[uptohere]

48. its pretty simple

if you want to seem to be making it equitable, whack the dividend part of it and leave the child tax credit. Sounds family friendly and for the average Joe.

[kentuck]

55. So, is there a consensus ? Do we want to keep the MC tax cut ?

And what is the major argument against it? Obviously we need funds but why can't we get that from higher incomes?? Is there not enough of them for adequate revenues? Do we have to have a taz-paying middle-class if we are going to have any programs for people?