I think Dean got himself in more trouble with this Tax issue.

[Renew Deal]

I would love it if our finance people could get in on this. My understanding is that Payroll Taxes include money for Social Security, unemployment, and Medicare. Is this correct? That means that Dean wants to cut Social Security, Unemployment Benefits, and Medicare. He has not proposed any increases to balance anything out. He has only made comments about cutting.

I think Deans loose lips just got him into trouble again. He should go tell seniors that he wants to cut funding for Social Security and Medicare. Now this is consistent with his positions in the '90's, but it isn't now. It is also not consistent with his plan to raise everyones taxes back to the pre-Bush days.

I don't understand how he plans to win an election by raising taxes and cutting Social Security, Medicare and possibly unemployment. Can anyone here give some detail as to where these taxes go?

[Dookus]

1. We don't know enough yet

to characterize it that way.

Cutting the payroll tax doesn't NECESSARILY mean cuts in SS and Medicare, but he will have to explain how he'll make up the gap.

Just saying "I'll have a tax plan after Feb. 3rd" doesn't cut it. He's had almost two years to come up with a plan - mentioning it now without filling in the details strikes me too much like Nixon's plan to end the war.

[KittyWampus]

8. Not Only Has He Had Two Years- He's Raked In Enough Money

over those 2 years that he could have moved on this.

Furthermore, he had 2 years and yet he waited until only a few weeks ago to hire Foreign Policy Advisors? When that's his weakest link?

[jadesfire]

37. Not to mention that he didn't start hinting at this until...

his campaign realized that the American public wasn't just going to buy that "there were no Middle-Class tax cuts" (since there were some pretty definite and hard-won middle class tax cuts).

he won't release the plan until after feb 3rd because he doesn't have one yet and it's not likely to benifit people as much as it should.

[w4rma]

2. general revenues to make up for all the money lost under a payroll tax cut

…
Dean stressed that he didn't want to any reduction in payroll taxes to take funds away from Social Security. Thus, he said that he would get around that problem by using money from general revenues to make up for all the money lost under a payroll tax cut.
…
http://www.boston.com/news/nation/articles/2004/01/10/dean_confirms_tax_cut_plan_but_gives_no_details/
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=94761

[nancyharris]

5. Come again?

<"he would get around that problem by using money from general revenues to make up for all the money lost under a payroll tax cut">

General revenues are taxes!

[w4rma]

7. That's right. (n/t)

[papau]

34. correct - current excess payroll tax sent to rich via bush tax cuts

the bonds given SS are promises to increase the FIT tax on the rich so as to get the money stolen today repaid.

Do you really think Bush plans such tax increases!

:-)

nope - so Bush will cut SS benefits under the modernize with private accounts mantra - and all will be well.

Long past the time that the SS got rid of a bush of promises to raise taxes on the rich - they should convert to real assets/equities that you can readily sell to someone other than the gov with out causing interest rates to rise.

[asjr]

11. Any Dem who

wins the presidency will have one hell of a time getting us back on track to being a solid economy. GW has blown it. He has taken away all money that would run the country and gave it to his buddies. How can that be done without raising taxes? We might be able to ask the Haves to give it back out of the goodness of their hearts, but that is doubtful since they have it and will not want to give it up. If we insure all the children in this country, fund Head Start again, improve the schools, help the homeless, give veterans what they deserve etc., How will we pay for it? We all that once before and got used to it. We didn't know we would have a dumb-assed monkey taking it all away. And Oh my God, we are going to the moon again unless someone is handcuffed and can't push the button. No Dem is going to say he or she will raise taxes, but what else can we do? I hope someone who amounts to something in our government is drawing up impeachment papers as I speak. He has absolutely ruined our country.
Rant over--feels good.

[stickdog]

3. FICA is just another form of income tax.

And it's the most regressive of all federal taxes.

[deminflorida]

There ya go...

FICA is just another form of income tax...


That says it all....

[Dookus]

4. I agree...

but that has nothing to do with how Dean will pay for the lost income in SS and medicare.

When a judge unseals his papers, maybe he'll find the plan in there.

[w4rma]

6. None are so blind as those who will not see (post #2) (n/t)

[Dookus]

15. umm...

just saying "we'll pay for it out of general revenue" doesn't actually address the concerns voiced.

How will he make up the money taken from general revenue?

It's not rocket science.

[w4rma]

22. How will Clark pay for his tax cuts for married folks? (n/t)

[Pepperbelly]

24. corporate taxes ...

he spells it out very carefully. It is a pity that all of the candidates have not done so, even those who have been running since Moby Dick was a guppy.

:D

[w4rma]

26. So he raises taxes on some buisnesses? (n/t)

[Pepperbelly]

28. read the plan and of course ...

he does. Corps are sucking up government resources for the most part with a NEGATIVE income tax rate which means that the government is paying THEM through the Income Tax system. Something is very WRONG with that picture. Do you not support a progressive tax system?

[w4rma]

30. I'm all for this, but Dean is planning to do the exact same thing.

…
Third, we must get rid of corporate welfare and tax loopholes. These loopholes aren't just a waste of taxpayer's money, they're also bad for business. They encourage businesses to seek handouts instead of looking for better productivity.
…
http://clark04.com/speeches/006/

…
The current tax code is overloaded with special interest favoritism and stacked against working Americans. Unfair tax subsidies, shelters and loopholes abound. Corporations use foreign tax havens solely to avoid paying US income taxes. Tax cheats escape detection and prosecution. Abusive tax shelters are commonplace.

Governor Dean will make fundamental reform of the tax system one of his first priorities. He will crack down on tax shelter promoters and their clients He will pursue actions to impose hefty fines and bar further practice before government agencies by lawyers and accountants who certify abusive tax shelters. President Bush’s own tax commissioner testified that the IRS lacked sufficient resources to collect $30 billion in known unpaid taxes. The Governor will provide the Internal Revenue Service with the budget it needs to do its job.
…
http://beta.deanforamerica.com/site/cg/index.html?type=page&pagename=policy_statement_economy_taxreform

[jadesfire]

40. Where is the plan that says this?

i checked his website and there is nothing that i can find that backs up your statement. all i have to go on is the knowledge of his close relationship with IBM while he was Governor of Vermont. Not to mention that IBM is the Fourth-Highest Contributor to Dean’s Presidential Campaign. As of October 2003 (this is about two months old), IBM had contributed $26,095 to Dean’s Presidential campaign, making them the fourth-highest contributor.

[stickdog]

35. Bush is STEALING the SS revenue to pay for his war & deficit.

Why can't Dean steal a little back from estate tax and income tax?

[democratreformed]

9. Except for the part that I, as an employer have to pay

On second thought, I guess that could be seen as a corporate income tax. Maybe?

[stickdog]

36. Come on. You just take it out my salary. (nt)

[democratreformed]

43. FYI

6.2 percent is held out of your salary for FICA. 1.45% is held out of your salary for Medicare. Your employer pays an additional 6.2% into FICA and 1.45% into medicare that is NOT held out of your check.

And, I don't take anything out of your salary b/c you don't work for me.

[Bread and Circus]

32. I agree w/ you here and it also hurts employers as well...

Good on Dean for addressing this...

[sandnsea]

39. And it's lumped into the budget

Current spending often uses FICA surpluses.

But the FICA tax holiday was actually a Kerry idea quite a while ago. I think he finally decided it was easier to just point to the tax credits people already had instead of proposing a new tax plan. I think he's right.

For Dean, it's just foolish because he's the one who said we HAD to repeal all those tax cuts for the sake of the economy and to pay for social programs and his health plan. He needs to understand consistency is critical for a Presidential candidate. Too late for that me thinks.

[democratreformed]

10. Just a note, but, as an employer, I pay seperate unemployment taxes. n/t

[ryharrin]

12. I was under the impression that the basic outline of his plan

is that he will reduce or eliminate payroll taxes for lower and middle class people, while raising the amount of imcome people pay payroll taxes on (currently around $85w000) which will more than make up for the cut. It's a completely progressive tax cut, and wll not reduce funds available for SS, Medicare, etc.

[ClarkGraham2004]

13. What on earth do you mean? He was going to do this all along.

:eyes:

[cally]

14. Cutting payroll taxes is a fantastic idea!!!!

Don't just attack it because Dean proposed it. Payroll taxes are the most regressive of all income taxex. If you cut those and make up for it by increasing taxes on corporations and wealthier folks, then you not only create a more progressive tax system but improve the economy. Since the less wealthy spend most of what they get, any tax cut in payroll taxes will increase consumer spending more than something like the Bush tax cuts for the wealthy.

It's a good idea.

[BootinUp]

16. true

he needs to role the whole plan out though.

[HFishbine]

17. You make such an unfounded leap

from what Dean wants to do to what you think it means that it's not even worth discussing.

[quaker bill]

18. The payroll tax is higher than it needs to be

So that they can fund the general revenue shortfall. A major portion of these taxes has been spent, ever since Reagan, to offset the budget deficit.

This existing situation is very regressive tax policy.

Increasing income taxes to balance the budget and then reducing payroll taxes to only the amount needed to fund the benefits would be a progressive tax plan and would result in the largest benefit to the middle class and the working poor.

It would help to undo the largest tax increase ever passed on the middle class and the working poor. Reagan did this to us and it is about time someone undid it.

[nancyharris]

19. Voodoo Economics

<"Increasing income taxes to balance the budget and then reducing payroll taxes to only the amount needed to fund the benefits would be a progressive tax plan">

Increasing income taxes...then reducing payroll taxes....? (payroll tax is income tax)

[cally]

23. It's a tax on income but is assessed quite differently

Income taxes are filed at the end of the year with all the deductions we are all familiar with. Over the last 20 something year, it has gotten less and less progressive. Payroll taxes are assessed on salary each paycheck. I believe both you and your employer pay about 7 percent on income up to $84,000. After that cap, you do not pay SS taxes on the additional income. If your income exceeds the cap, then you stop paying SS taxes on income after $84,000. The Government also collects disability, unemployment, and a few others but Social Security is the biggest.

[nancyharris]

31. Not really

<” It's a tax on income but is assessed quite differently”>

All US citizens (who earn income) have payroll deductions. If you work for an employer, the money is deducted each paycheck. If you are self-employed, you must file the deductions every quarter including Social Security and Medicare deductions. The only difference is that one is done each paycheck and one is done quarterly. The amount deducted is the same for both based on your yearly earning.

[quaker bill]

41. yes actually it is different

Once again slowly.

Payroll taxes stop being collected at an income of $84,000.00 a year.

Thus a person making $1,000,000.00 will pay to the penny exactly what a person making $84,000.00 owes, not one red cent more. In other words, the payroll deductions actually stop.

A person making minimum wage will likely owe no income tax but will pay payroll taxes at exactly the same rate as a person making $84,000.00 a year.

A CEO with an income of say 10 million a year will be done covering his entire payroll tax liability for the year in the first week of january. Some of the richest cover it by noon on January 1.

The payroll tax is proportionately weighted toward the working poor and middle class.

A properly structured tax system would be progressive. This system is regressive.

[nancyharris]

42. You are incorrect

First, there is no such thing as “payroll taxes”. Money is deducted from your payroll by the Federal Government (based on your W-2 withholding) to PREPAY your income tax. Self-employed people do the same thing only they make quarterly payments.

Second. The $84K cut-off is for Social Security ONLY. No one pays SS taxes above $84K. All income and Medicare continue to be deducted (as a PREPAY for income tax) above $84K at a rate determined by your tax bracket. (You might also note the money one receives in Social Security is based on the amount they pay into SS. For instance a millionaire gets no more in Social Security payments than one who earns $85K).

Third. When you file your income tax (between January 1 and April 15) you either get a refund (because you PREPAYED too much) or you must pay more (if you PREPAYED too little).

Spend some time at the IRS web site.

[arewethereyet]

44. NO, that is incorrect

it is NOT higher than it needs to be.

It is higher so that a surplus will be available for when the boomers cause there to be more going out than coming in in about 15 years give or take.

The surplus has been getting replaced with IOU's for the last I can't remember how many years but enough to encompass Clinton (remember Gore's "Social Security lock box" chatter back then and how it became a joke as the lock was immediately knocked off the box and IOU's substituted).

Please take some time and educate yourself on this.

[slinkerwink]

20. he's going to get money from the general fund, and that way it won't

hurt Social Security.

[Renew Deal]

21. Where did you see that plan?

There is nothing on paper and he isn't saying much. I have already seen the spin on this begin. And it sounds like this: Dean wants to take from SS.

[slinkerwink]

29. it's in the Boston Globe for chrissakes!

:nopity:

[Renew Deal]

38. So why doesn't Dean put it on his site.

I didn't know the Globe was part of Dean for America.

[retyred]

25. If you loan me $50

but only give me $25, you'll owe me $25 and I'll owe you $25 so we'll be even. HUH?

Now that's a plan Americans can get behind....even further behind than they are now.


retyred in fla
“Good-Night Paul, Wherever You Are”
So I read this book

[w4rma]

27. I don't think you know what you are talking about, retyred. (n/t)

[dd123]

33. The thing is that the income tax is a progressive tax while

the payroll tax is regressive.

If you increase the amounts from the progressive tax and reduce the amount from the regressive tax, then the system comes out more progressive, i.e. rich people pay more, poor people pay less.

Sounds good to me!