The House just gave car makers HUGE Tax cuts.

[dixiegrrrrl]

"Part of the proposed auto bailout plan would reinstate a tax loophole, Silo, which allows companies to avoid paying billions of dollars in taxes. The I.R.S. outlawed the shelter in 2004. A version of the bill passed the House Wednesday, though its fate in the Senate remained uncertain."


http://tpmmuckraker.talkingpointsmemo.com/

[Idealism]

1. Its not the best plan but it helps

The best way would be to revive protectionist policies when it comes to automobilies, as other countries do (China and Japan), but that is a damn hard road to go down, not to mention politically unstable.

[mrreowwr_kittty]

3. I don't think it's politically dangerous at all.

Most people support protecting American industries.

[Idealism]

4. Internationally it wouldn't bode well

China, who pretty much will finance the TARP endeavors and future debts, will not receive protectionism coming the United States well, as their economy is heavily dependant upon selling us goods.

[melm00se]

6. we've already done that

and it put us in the boat we are in now.

The US put tariffs in place on foreign light trucks and SUVs (25% starting in the 60s) and, like good capitalists, US automakers spent time and effort building up and into that specific market (nothing like having a guaranteed 25% profit margin thanks to Uncle Sam to motivate someone).

[Idealism]

13. We don't do that anymore

It costs any outside company 2% to import a whole car, SUV, light truck, of industrial grade into the US

[pampango]

9. Not sure about China, but Japan is not protectionist when it comes to tariffs on automobiles.

"Japan imposes no tariffs on imported automobiles and auto parts".

"Japan's per capita imports from U.S. is more than U.S. per capita imports from Japan has been used by the Japanese to argue that Japan's market is open to the world, especially to the United States."

http://www.uwsp.edu/business/CWERB/1stQtr96/SpecialRepo...

I think that under WTO rules developing countries, which China would have been when it joined though arguably isn't anymore, are allowed to have some tariffs that the richer countries agreed to forego. China's per capita income is a little over $5,000 now, while India and most of the developing world is still below $1,000, so it would seem that China should no longer qualify as a "developing country".

[Idealism]

17. That article is horeshit, sorry to say

Japan has been protectionist since it was created. They subsidize their auto manufacturers per car they produce (not sell) and give them more money if they produce a "green" car (Prius, CamryHybrid). Their tariffs have been lowered recently but they are still in the 10-16% range (depending on level of emissions- smog is a big issue to Japan). China it is about 22% to import a whole car to, 14% if you are importing car parts.

[pampango]

21. Here's a 2002 CNN article that indicates that Japan has no tariffs on cars.

http://edition.cnn.com/2002/BUSINESS/asia/09/12/japan.cars/index.html

"Japan itself already has no tariffs on passengers cars, trucks and parts, and although the United States, its major export market, also imposes no duties on cars, it has a tariff of 25 percent on trucks.

The European Union, however, where member country Germany is the world's biggest auto exporter, imposes duties of around 10 percent on passenger vehicles, 22 percent on trucks and five percent on parts. "

If we enacted a national health care system, we would do more to help our domestic auto companies than imposing tariffs on Japanese cars. Plus that would avoid the possibility of retaliatory tariffs against our exports.

[Idealism]

23. Its not exactly well-known

The Japanese government do a good job hiding their protectionist ways.

http://books.google.com/books?id=XWWsklHo6hAC&pg=PA252&lpg=PA252&dq=japanese+excise&source=web&ots=5WTNsGcBhV&sig=g2xL89b91dbaiRMunz34_UcN4Y0&hl=en&sa=X&oi=book_result&resnum=7&ct=result#PPA259,M1

They call it an excise tax on vehicle emissions, tonnage, and shipping. True, they tax their own vehicles, but the subsidies the government gives them to make their cars get substantially increased on big ticket automobiles (the real money-makers for the auto makers).

[LiberalFighter]

22. Japanese automakers more than offset the lack of tariffs

with their sweatshop type suppliers and strongly encouraging their workers to put in hours without pay.

[Wapsie B]

2. Why don't they give people like us the huge tax cuts?

Oh that's right, that might actually do something good, and we can't have the supply-siders with egg on their faces. By tax cuts for working class people I was thinking along the lines of restoring the personal interest deduction that Ronnie took away.

[elifino]

5. I agree with your post and would add remove tax on SS

I must admit, I did not know that SS was subject to income tax until I retired.

[Hannah Bell]

10. reagan-era "reform"

[Wapsie B]

15. Yeah all of Reagan's tax reforms ended raising taxes for the middle-class.

Really throws a monkey-wrench to the idea that trickle-down works.

[hfojvt]

19. oh boo hoo. It oughta be taxable.

It's the taxes that shouldn't be taxable, not the payments. Why would you want to have a multi-millionaire like John McCain get $50,000 worth of tax free social security income while working people are paying 15.3% tax on their first earned dollar, and then are taxed on that tax? Almost $900 taken out of my pay this year for FICA and both Federal and State government consider that to be taxable income even though I never see it.

[Hannah Bell]

25. Exactly. You make, e.g., $40K per year & are taxed on that income.

On top of that, SS taxes are taken from the taxed income.

SS retirees were taxed on their contributions, just like you.

From 1936 to the 80's, SS benefits weren't taxed - 50 years.

No one gets $50K in SS. Maximum benefit in 2008 = $2030/mo.

http://www.jpmorgan.com/cm/Satellite?c=JPM_Content_C&cid=1159324927364&pagename=jpmorgan%2Fam%2FJPM_Content_C%2FGeneric_Detail_Page_Template

Everyone who gets SS contributed, & was taxed on their contributions. People like John McCain, on average, get back less than they put in. People who never made much $ during their working lives get back, on average, more than they put in. But all the contibutions have been taxed.

You think you're paying too much. You're right. So is everyone else who works, about 25% more than needed to support current retirees. You can thank Reagan for that, too.

The same "reform" that legislated taxing SS beneficiaries also legislated overpayments for contributors. Prior to Reagan, payments in + cushion were kept in rough balance with benefits going out.

Reagan/Greenspan's "Reform" jacked up rates, supposedly for the boomers to "pre-fund" their retirement, but in reality, to create surplus funds that could be put into the general fund to help make up for Reagan's tax cuts to the rich.

You're pissed at the wrong targets, & have the wrong answer for your anger. Better to return to "pay-as-you-go" than to tax benefits.

1/3 of retirees rely on SS for their entire income. 2/3 rely on it for 50% or more of their income. Remember, these are people who WORKED all their lives.

[hfojvt]

26. okay, I confused that with his $58,000 pension that's tax free

You are defending the wrong target yourself. As if it is poor people who are paying taxes on their social security benefits. According to the worksheet I am looking at you don't pay taxes at all unless 1/2 your SS benefits plus the rest of your income is more than $25,000 (or $32,000 for a couple). Even then, the most that is paid for a single person is tax on $3,825. Boy that's rough, having an income of $23,000 and having to pay taxes on $3,825 of it. Especially with the extra $1250 in standard deduction for people over 65. Cry me a fu$%ing river. My whole income of $12,000 is considered taxable, twice. Plus, people who are retired now paid FICA taxes at a much lower rate and with a much lower cap than exists now.

No, I think my anger is rightly placed at higher income people who whine about their taxes and at politicians who fall all over themselves to devise even more tax breaks for people with higher incomes than me because those people are "seniors" a designated class with lobbyists and media iconography that all people are supposed to care about. Using low income seniors as cover to give tax breaks to high income seniors.

[SoCalDem]

24. It didn't used to be.. and once recieving it, an older worker

used to be able to work and earn as much as they could..

Thanks to St. Ronnie of Reagan, oldsters now have to pay taxes on their meager SS checks:(

[FormerDittoHead]

7. It stinks. It's a bad practice, it was good to outlaw it. There must be other ways.

This practice of buying and then leasing back depreciation rights and assets was a racket which was just moving paper to avoid taxes.

If they want to give corporations a break, there are LOTS of other ways to do it.

The tax code should be fair and straightforward, and business practices which don't actually DO ANYTHING EXCEPT to avoid taxes should be outlawed no differently than getting paid under the table is against the law.

[Robbien]

16. Exactly.

I see these tax breaks as an administrative gain which would just flow down to the bottom line and get paid out to the major hedge fund owner as shareholder profit.

[madrchsod]

8. alabama gave their foreign auto makers a billion plus in tax breaks

why can`t we give our auto manufacturers a few bucks?

[Freddie Stubbs]

18. Why can't Michigan do the same for Detroit automakers?

:shrug:

[hfojvt]

11. Why do they need tax cuts?

If they are not making any money, why would they pay taxes?

[Hannah Bell]

12. good question.

[FormerDittoHead]

14. Yes. I thought the problem was DEMAND, not tax rates.

How about a means-tested (no one over a million income) $5,000 (or whatever), new American car rebate from the gov't?

I can tell you that we would buy a new car next week, given that.

[bullwinkle428]

20. Paraphrasing J. Stewart again - "Tax cuts...is there any problem you CAN'T solve???"