Dems look at tax cuts for middle class

[ck4829]

Democrats are not ruling out raising taxes for the wealthiest people to help pay for tax cuts for middle-income families, House Speaker Nancy Pelosi said.

She spoke of pursuing an estimated $300 billion that people owe in back taxes, eliminating deficit spending and reducing wasteful federal spending.

"As we review what we get from ... collecting our taxes a reducing waste, fraud and abuse, investing in education and in initiatives which will bring money into the treasury, it may be that tax cuts for those making over a certain amount of money, $500,000 a year, might be more important to the American people than ignoring the educational and health needs of America's children," Pelosi, D-Calif., said in an interview aired Sunday.

A budget rule, known as the pay-as-you-go rule, that was approved by the Democratic-run House on Friday requires that tax cuts have corresponding cuts in government spending or tax increases elsewhere to pay for them.

(And here's some common sense, which until recently used be pretty rare in Washington DC, from David Obey)

"How can you ever expect to get to a balanced budget if you're spending $100 billion a year on Iraq borrowing the money to do it, if you're giving $50 billion a year in tax cuts to people who make over a million bucks a year and paying for that with borrowed money?"

http://news.yahoo.com/s/ap/20070107/ap_on_go_co/democrats_agenda

[w4rma]

1. Very good. (nt)

[unblock]

2. and there's that idiot mcconnell saying that pay-as-you-go means tax hike

once upon a time, it was the republicans who, as the party of fiscal discipline, created the pay-as-you-go rule in the first place.

but that was when there was a democrat in the white house. fiscal discipline is for when the OTHER party has power.

what a bunch of sorry-ass losers the disgraced republican party is.

[hfojvt]

4. yeah, a couple things on that too

First, a tax hike on rich people is not the same thing as a tax hike. Republicans are still prepared to paint it that way. Second, to undo tax cuts, which mostly went to rich people, is also not a tax hike. The tax cuts are not old enough. Nor are they bi-partisan enough. They were Bush tax cuts for the Bush base 'the haves and the have mores'. It's too bad their expiration dates are not closer. Perhaps we can undo some of them as part of a bi-partisan agreement to extend AMT relief.

[unblock]

7. even just letting shrub's tax cuts expire is painted as a tax hike

who's idea was it for them to expire? the shrubbies, of course! it was part of that fraud to make them look affordable. but if the democrats "let" them expire, why wouldn't the blame go to the AUTHORS of the freaking expiration??

[hfojvt]

9. one trouble is that the earlier expiration dates

have been for the portions aimed at the lower incomes, such as the new 10% bracket. I am in the dark as to when the dividend travesty is set to expire. Some of the expirations may have been the Democrats doing as we worked to make them smaller. Politically, we cannot let the AMT relief expire, although I now wonder if when the media says it impacts the "middle class" if they are talking about the $75,000-150,000 families.

[unblock]

15. well, in the case of the amt, it's more a matter of itemized deductions

so if you have a house and live or work in a state with a high income tax, you're much more likely to be affected by the amt.

$200,000/yr renters might be spared while $40,000/yr homeowners might get nailed.

[hfojvt]

3. how nice of her to apparently think

that families making between $100,000 - $500,000 a year are also part of the "middle" class. Never mind that only 4.34% of American families make between $150,000 and $250,000 a year and only 1.5% make more than $250,000.
http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Those people, richer than 94% of the country, are considered middle class by our Democratic leaders? Are they nucking futs?
Perhaps they are unaware that people in Kansas pay income taxes if they make over $5,250. At $10,000 a year, I will not pay Federal income taxes this year - a $400 contribution to my IRA will see to that, but I cannot avoid either state income taxes, sales taxes or property taxes.

There is a connection too. If the federal government would make income taxes more progressive, they could provide more financial aid to Kansas (et. al.) which would allow Kansas to cut its regressive taxes.

I am cool, mostly, with tax cuts for the middle class, but I define middle class as families with incomes between $25,000 and $75,000 and NOT as "families with incomes below $500,000."

[unblock]

6. it's kinda subjective -- and also depends on age -- but i think i agree with pelosi

it also depend on wealth and other factors, too.

but for me, i'm in the $100,000-$500,000 income range and frankly i feel that i have MUCH more in common with people earning $25,000-$75,000 than i do with people earning $1,000,000+.

the fact of the matter is, maybe i can afford a nicer car than others, but i still have to work my butt off monday through friday just like the rest of the middle class, i still have to pay monthly for housing, i still have to worry about how i'm going to afford my retirement or college for my baby.

driving a nicer car does NOT put you in a different class.

the difference between me and the rich is that i work for a living. the rich have their money earn their living for them, and they merely spend their time shepherding over their investments. this is how ceo's can "magnanimously" take a $1 salary. it's because they're not in it for salary, they're in it to supervise their investment.

now THAT's a different class. not needing to work for a living, just supervising your money.

[hfojvt]

8. the difference between rich and non rich

is not that one works and the other does not. It is that one works for $15 an hour and the other works for $40 an hour. Having more money does make you rich, whether you buy a newer car with the money, live in a nicer neighborhood, wear better clothes, eat out more often and at better restaurants, save more money, and plan to send your kids to a more expensive college.
Sure, there's another very tiny class way above you, but that does not make you middle class, because there are other classes, much larger, way below you.

[annabanana]

10. nonsense... For the rich, the money works for them, not the

other way around...

"How did they get "poor" Pater?"

"They spent the principle, son, they spent the principle".

[hfojvt]

12. right, so somebody who 'works' for $500,000 a year is not rich

Only Bill Gates or the Fortune 400 are rich.

That's not how most people use the term, but there sure are alot of rich people who want to deny being rich. "I'm not rich, there are 6 people in the world with more income or wealth than me." "I have to work, and I only make $75 an hour. I'm just like you, minimum wage worker - not rich."
Except that from that point of view anybody making less than $10 an hour is as poor as a homeless person.

Oprah's worth $40 billion. She could spend $100 million a year for the rest of her life and not run out. And how the heck does somebody spend $100 million a year? But Oprah's not just rich, she's mega-giga-rich. Capitalist royalty, but royalty are not the only rich people. Dukes and minor nobility are rich too.

[unblock]

13. you're drawing distinctions without meaningful differences.

ok, sure, $40/hr makes you richER than $15/hr. but what the hell is "rich" anyway? a CLASS distinction has to be more than just the same lifestyle but with somewhat more expensive stuff.

things like not knowing where your next meal is coming from, being comfortable but a slave to your job, or having no need to work for the rest of your life, those are real distinctions that spell class differences.

the iea is to have something like THREE classes, not 3,000.

[hfojvt]

18. well there are something like 5, I would say

there's lumpenproletariat, there's poor, there's middle class, there's rich, and there's super-rich. If $50,000 (per year no less! How much is that in 20 years? Is a million dollars not a meaningful distinction, because that is the difference between $15 and hour and $40 an hour over 20 years.) If that is not a meaningful then write me a small check. $5 or $50,000. It's not a meaningful distinction so make it $50,000.

You simply cannot be richer than 80 or 90% of your neighbors and claim that you are not rich, just because you still have to goto your high paying job.

I am fine if rich people feel sympathy with lower income working class people and want to help them. What seems to be a stumbling block is when you seem to think a "middle class" tax cut for yourself is some kind of help for us.

And 5 is not 3,000 any more than $5 is $50,000.

[unblock]

20. if you think $15/hr and $40/hr are in a different class

then you and i have a very different understanding of the concept of "class".

yes, the guy who earns $40/hr can get nicer stuff than the guy who earns $15/hr.
but same lifestyle, same worries, same power, nicer stuff is not a CLASS difference.

and my own perspective on marginal tax rates is that i would be happy to pay more as long as the rich paid way more. personally, i'd start by treating capital gains and dividend the same as earned income and jacking the top rate back up to 39.6% or even higher.


btw, there are many factors that determine economic class, and income is just one of them. earning, say, $100,000/yr is one thing if you're 65 years old and only just broke into the 6 figures. it's quite another if you're fresh out of school and have an entire career of raises in front of you. cost of living is also relevant. $100,000 in manhattan is most definitely NOT rich, but $100,000 the middle of nowhere is quite a lot of money.

[hfojvt]

21. what is the same power?

Does a plant manager have the same power as a floor worker?

Tripling income does not just mean nicer stuff. Money is also power and can change a person's worries. Car trouble is not as often nor as hard to handle if you have a newer car.

My understanding of class is that you cannot be at the top and call yourself 'middle'. If $25,000 a year is middle class, and $250,000 is also middle class, then that phrase loses all meaning because we are all middle class, except the Fortune 400.

And yes I know about cost of living and wealth being factors, but even in NYC one in 5 workers makes less than $8.10 an hour (or did in 1999, that study is doubtless dated).

[Hippo_Tron]

22. I don't think the $100,000 - $500,000 possess that much of the nation's wealth

In terms of practicality, the uber rich are the ones that have the money. I don't think we'll get that much revenue raising taxes on the $100,000-$500,000 group. Although I think that they should probably pay more on the state and local level in some areas.

[hfojvt]

24. stats I have

say that the top 1% have 39% of the wealth, and the top 20% has 84%. So the 1-19% (roughly $90,000-$700,000 household income) has 45% of the wealth. As far as share of income, the top 5% gets 22.4%, the top 20% gets 50.1, and the top 40% gets 73.1%. The top 40% is families with incomes over $53,000. So the 5-20% richest families in the US get 27.6% of all income. That's more than the top 5%, but then again, it is 3 times as many families. But 4 times as many households in the bottom 60% divide a mere 26.9% of all income.

[IronLionZion]

25. Rich people don't pay taxes

Consider who has the concentration of power and influence. Our rather ridiculous US Tax code is understood by.....absolutely no one. The wealthy already manage to hire tax attorneys and accountants to drive down their stated earned income often to the point of declaring a loss just to avoid the tremendous amount of taxes they SHOULD be paying.

It's disgusting, but rich people often don't earn much "income" on the books so they don't feel the need to pay income tax. They also finance the campaigns of most politicians including the honorable madam speaker.

Texas and Florida are making out like bandits with their sales taxes. I can't imagine how it must be in Kansas. In PA, it's tolerable but we have no sales tax on clothes or foods that have some nutritional value. (soda is taxed but lemonade is not)

[hfojvt]

26. there is some truth to that

but it's also one of the myths they want you to believe. When Reagan cut taxes for the wealthy, revenues went down. Same thing when Bush did it. Why would that happen if the rich are already not paying taxes? According to Somerby, a rich person, like Teresa Kerry, avoids alot of taxes, legally. She invests alot of her wealth in tax free municipal bonds. So her interest income from that is not taxed. And another billionaire like Charles Koch, whose net worth went from 4.5 billion to 12 billion in 2005. I'm not sure how much income he takes home and how much is kept in the company that he and his brother David own.

However, somebody like a Wal-mart heir, they get alot of their income from the dividends that Wal-mart stock pays and from capital gains from the sale of Wal-mart and other stocks. Thus Bush and Republican plans to cut taxes on dividends and capital gains. I figure the dividend tax cut saved one of the Wal-mart heirs about $20,000,000 in taxes. And yes, one of them made a substantial donation towards the Bush2004 campaign.

[TahitiNut]

5. "an estimated $300 billion that people owe in back taxes"

I detest this kind of rhetoric. When was the last time the IRS or anyone in elected office "estimated" the amount ordinary people overpaid in taxes becuase they either didn't understand or didn't bother to jump through the forms hoops to claim all the deductions and benefits they had coming? It's really appalling, imho. I think there's a huge number of taxpayers in the "middle income" that just "can't be bothered" to go through the time and/or expense of keeping the records and figuring out the arcane provisions of the tax code that the wealthy hire accountants and tax attorneys to do for them.

Every time they talk about "back taxes," the IRS goes after the middle class individual - the poor schmuck who can't afford to fight back. At the same time, they've got huge corporations and wealthy taxpayers doing off-shoring and "funny math" to skate ... but it costs too much to go after them.

[hfojvt]

11. sometimes the worst crimes are

'perfectly legal'.
http://www.amazon.com/Perfectly-Legal-Campaign-Benefit-Everybody/dp/1591840198

I just had to file two 1040-X forms last year because of $600 in credits I did not know I was due. I just never bothered to check form 8880 until last year. So I may also have overpaid in 2000, 1999, 1998 and maybe even further back. It could amount to more than $1000, but they only allow re-filing for the last 3 years. I kinda hate to think about it, even though it is miniscule compared to the money I lost in business and real estate.

[ddbaj]

14. As a progressive, I am 100% PRO-tax cuts.

But the right tax-cuts, aimed at people who indeed need relief.

[IndyOp]

17. Exactly. If by "middle-class" she means people making 18-40K then okay, do it

Especially families need the tax relief and the economy will benefit because people in this bracket will spend the money they earn and/or get themselves a bit out of debt.

I am over 40K and I don't need it and FOR SURE people who are making 100K or 200K or 300K don't need it and might be considered by some to be middle-class.

[mzmolly]

16. WTG DEMS!

:toast:

[MadHound]

19. Umm, yeah, but what about that 8.6 trillion dollar gorilla sitting in the corner?

Tax cuts are nice and all, and endear a party to the people. Paygo and promising to balance the budget are fine promises. But the fact is that the US has a huge debt load, and it is getting larger, not smaller. This is a severe drain on the economy, and leaves the US increasingly vunerable to economic visitudes, whether "natural" or deliberate.

Frankly at this point, I would rather forego the tax relief for the middle class, and also reinstate the tax cuts established by Bush, raise the capital gains taxes to 1990 levels, and secure the estate tax. Once we have our economic house in order, and our debt paid off, then we can start thinking about tax cuts.

Oh, and getting us the hell out of Iraq would save the US a ton of money too.

[Manifestor_of_Light]

23. too late for lots of us to worry about

A lot of us fell out of the middle class. Back when Bill Clinton was president. We don't have jobs and don't pay payroll taxes or income taxes, so we can't be a revenue source for the government.