Question about last night's debate

[JNelson6563]

I checked out the threads from last night on the debates--well some of it, don't have time to read all of it--and I have a question that may have been addressed but I didn't see it.

Last night Kerry said something about rolling back the tax cuts entirely would deprive a family (of 4?), earning $70,000 a year of their earned income credit. Did I get that statement right?

While a big fan of economics I am no tax expert. I would like someone to tell me about this EIC. It's my understanding that one must earn much less that $70,000 to get the EIC. Am I wrong? Or, was I right at one time and that has changed?

We are a family of 4 here, closer to the $50,000 and we aren't able to claim the EIC (to the best of my knowledge--taxes are the one $$ hubby handles--an arrangement all are happy with :-) ).

Thanks in advance DU~

Julie

On edit: I enjoyed last night's debate and thought all did pretty well. Didn't like the squabbling but, aside from that, I thought everyone made some good points. Moderator sucked in a big way. Even my apolitical husband said Lieberman's got to go. We both loved Sharpton!! I always feel sorry for whoever speaks after him.

[JNelson6563]

1. I'm hoping someone can answer this

kick for that reason....

[JNelson6563]

2. just kickin' myself this morning

haha

Ok, I googled it, which I should have doen in the first place....

Here's what I found:

3. Your earned income and modified AGI must each be less than:
* $11,060 ($12,060 for married filing jointly) if you have no qualifying children, or;
*$29,201 ($30,201 for married filing jointly) if you have one qualifying child, or;
*$33,178 ($34,178 for married filing jointly) if you have more than one qualifying child.
4. Your investment income cannot be more than $2,550.

So am I reading this right? The ceiling for EIC is $34,178 AGI? Would a family of 4 earning $70,000 end up with a $34,178 AGI (or less)? Seems to me to be a very large adjustment.

I don't know, was this discussed last night in the debate threads? It seems to me to be a serious misstatement unless I am just totally not comprehending the EIC facts here.

Anyone know?

Julie

[OldSoldier]

22. Earned income *and* AGI must meet...

There's no way you could make the cut for EITC if you earned $70,000/year. You could possibly make the cut on the line-3 thing by having $35,822 in unearned income, but line 4 says "no more than $2550 in unearned income."

You'd also need some hellacious medical bills, so your Schedule A could pull your AGI down.

In short: there is no way in hell you could qualify for EITC with $70,000 annual income. Which is good, because people earning seventy grand a year are not who it was intended to help.

[CWebster]

3. Kerry is clueless

Seventy thousand dollars...

He is clueless as to the fiscal realities of an increasing percentage of Americans as well as their added burden of having to pay higher costs in local taxes, user fees, higher education, health insurance. These costs are cumulative and are most pronounced for those who don't qualify for middle-class write-offs - and obviously don't even register on Kerry's radar.

[JNelson6563]

4. the thing of it is

is that he cited a particular family who would lose some $2000+ (I think it was htat neighborhood) in EIC if Dean rolled back Bush's tax cut.

In the 50's range, family of four we pay $28 per month less but my local taxes have gone up and lots and lots of (more) cuts are on the way. I'd gladly give it back.

So very many got no break, some, like us, got a tiny bit that works out to a crappy trade-off. I think Dean needs to address this misstatement. I don't recall it being rebutted.

Julie

[CWebster]

5. Dean was permitted to rebut once and then it went back

to Kerry and then it went to commercial break every time:

Kerry attack
Dean rebuttal
Kerry attack
Commercial break

Kerry attacked first and got the last word.

[JNelson6563]

6. but, but, but

but the evil whore press always favors Dean! They are trying to set us up to lose by favoring Dean!! How can you say they favored Kerry?!?!? ;-)

Julie

[Ripley]

7. And when Lieberman went after Kerry he got to respond

like twice or three times. In fact Kerry was always talking. Yadayadayada.

[AP]

12. Someone please explain to me what Dean thinks the connection between

regressive federal income taxation and high state and local taxes is?

Why can't you have more progressive federal tax and more progressive state and local tax?

And the probelm with state and local taxes has less to do with HOW federal taxes are raised (progressively or regressively). Primarily, it has to do with the fact that we aren't raising enough revenue. However, the reason we aren't raising enough revenue is because the middle class is bearing so much of the burden of paying for the support of the country, they can't work as productively and efficiently as possible. If they could (if there were were a more progressive way of raising tax revenue) you'd see a bigger economy, which would generate more tax revenue, which would shrink the defecit absolutely and as a percentage of the GDP.

[AP]

9. 2 x 34K = 68K (?)

That's 34K "each".

[AP]

10. Having a regressive federal income tax doesn't make all those other taxes

go away.

Dean and the people who support him are the ones revealing their lack of understanding of how taxes work.

[JNelson6563]

11. Nice genralization

In my opening post I made it clear I am no tax expert. Hence my question. I have a general idea of "how taxes work" but I did not understand Kerry's remark. To not know certain specifics does not mean someone is clueless.

Julie

[AP]

13. To not know does make someone not know, however.

Anyway, I'm not responding to you only. This debate has gone on for a while.

I'm talking about the persistent tax-policy know-nothingness of Dean supporters.

Another thing Dean does which is despicable is that he conflates the upper middle class and middle class when he talks about this.

One way the Republicans successfully get middle class people to vote against their economic best interests is by blurring the difference between rich and poor and gettign people to have a class identification which doesn't match reality.

Dean pretends that these tax cuts are for the upper middle class. However, two 40 year olds making 35K each have nothing in common with the one million-plus earners who get over half their income from dividends, inheritance and long term capital gain.

Edwards is separating these people out and telling them that if you work for a living in America, you're getting screwed by Republicans. However, Dean plans to balance the budget on the backs of the income earners of America, so he blurs the class distinctions.

[JNelson6563]

17. I didn't know and wanted to

I only half heard it as life was going on around me--kids etc-and was surprised at what I thought I had heard! I am glad I was misheard...

If Dean wants to roll back the cuts (of which the poorest didn't get any) it seems to me the bulk would come from those who got the most cuts.

Am I seeing that wrong?

Julie

[boxster]

8. Here you go, Julie. It was the child credit (and more), not the EIC.

KERRY: When Governor Dean just said, "What middle-class tax cut," let me tell him what middle-class tax cut.

The Burnett (ph) family in Colfax, Iowa, earned $70,000. But under his plan, they are going to pay $2,178 more in taxes because they lose the child credit to raise their children, they pay a penalty for being married again because he puts it back, and they lose the 10 percent bracket, as everybody else here does. So you begin to be taxed at 15 percent, not 10 percent.

Those aren't Bush Republican cuts, those are the Democrat cuts that we worked hard to put in place to protect the middle class.

http://www.washingtonpost.com/wp-dyn/articles/A21551-2003Oct26.html

Edit: it's on the 4th page: http://www.washingtonpost.com/wp-dyn/articles/A21551-2003Oct26_4.html

[JNelson6563]

15. ok, here's some data on that

Topic 606 - Child Tax Credits

You may be able to claim a child tax credit if you have a qualifying child. The credit can be as much as $600 for each qualifying child.

A qualifying child is a child who:

Is claimed as your dependent,
Was under age 17 at the end of 2002,
Is your son, daughter, adopted child, descendant of a child, stepchild, or eligible foster child, and
Is a U.S. citizen or resident.

The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase out begins depends on your filing status, which is as follows:Married filing joint $110,000
Head of Household/Single/Qualifying Widow or Widower $ 75,000
Married filing separate $ 55,000

The child tax credit is also limited by the sum of the amounts of your income tax liability and any alternative minimum tax liability. However, if the amount of your child tax credit is more than your taxes, you may be able to claim an "additional" child tax credit for as much as 10% of your earned income greater than $10,000. Or, if you have three or more qualifying children, you may be able to claim an additional child tax credit up to the amount of Social Security you paid during the year, less any earned income credit you receive. You receive the greater additional child tax credit for which you qualify.

more...
http://www.irs.gov/taxtopics/page/0,,id%3D16259,00.html

Thanks for posting your info. I wonder how many this helps? I do not know what it was before this.

It will be interesting to see what our taxes work out to this year.

Julie

[boxster]

19. We don't have any kids, so the only thing that really affected us was

the change in the so-called "marriage penalty".

For people with kids, repealing the tax credit would certainly affect them. I have a friend who has 4 kids - $2400/year!

[JNelson6563]

21. boy they must fit perfectly into the target

income group.

Frankly I'd rather see working poor get relief.

Julie

[boxster]

23. Yeah, they were pretty darn happy. I agree - the working

poor should get relief, kids or no kids. Of course, if it isn't family-based or faith-based, BushCo has no use for it.

[Rose Siding]

16. There has been a $600 child tax credit since the mid 90's

These bush cuts increased it by $400 to $1,000.

Median income is about 42 grand and I'm very close to that. I'd gladly trade our cut for health care.

[Flaming Meaux]

14. He's talking about the 'sweet spot'...

...that Krugman was talking about last week. This is how the Bushies will ping Howard Dean on his promise to roll back 100% of Bush's tax cuts, with that hypothetical middle-class family with two cute kids that benefits big time from Bush's tax cut. As a Deanie, I hate to admit it, but Kerry is dead right, and I hope there is an honorable way to amend that particular plank before it bites him in the ass. As a realist, I don't see a bill rolling back the marriage penalty, the child tax credit, or the 10% bracket coming across the President's desk in the first place. It just won't happen; it's political suicide.

[TrueBlueDem]

18. Here's Krugman's "Sweet Spot" column

http://www.nytimes.com/2003/10/17/opinion/17KRUG.html?ex=1067403600&en=82e19b114e825bcc&ei=5070

...while the central thrust of both the 2001 and the 2003 tax cuts was to cut taxes on the wealthy, the bills also included provisions that provided fairly large tax cuts to some — but only some — middle-income families. Chief among these were child tax credits and a "cutout" that reduced the tax rate on some income to 10 percent from 15 percent.

These middle-class tax cuts were designed to create a "sweet spot" that would allow the administration to point to "typical" families that received big tax cuts. If a middle-income family had two or more children 17 or younger, and an income just high enough to take full advantage of the provisions, it did get a significant tax cut. And such families played a big role in selling the overall package.

MORE...

[unfrigginreal]

20. I would lose respect for Dean if he wanted to keep up this ruse

Now, I don't have a problem with Dean proposing a new lower and middle income tax cut by shifting the burden to the upper incomes but only as part of or after he rescinds the Bush Deficit Increase.