Remember how that $600/taxpayer stimulus last year kept the economy from going down the tubes?

[eridani]

Oh, wait......

Insanity--doing the same thing over and over again and expecting different results. With a single exception, tax cuts of about $1000 are a really useless waste of money that could be better spent directly on job creation. Having the government make one mortgage payment for you will do nothing for the economy, but government investment in green jobs will enable you to make mortage payments on a regular basis.

The single exception is a temporary holiday on payroll taxes (Social Security and Medicare) that would benefit mostly those who have the lowest incomes.

[Warren Stupidity]

1. FYI: "doing the same thing over and over again and expecting different results. "

Is not a definition of insanity.

Tax policy changes are an effective way to get cash into circulation quickly. Other methods have longer startup periods.

[MH1]

2. My understanding of Obama's proposal for individual tax cuts

is that the proposal is to implement those as a temporary cut in payroll taxes - only up to a certain level of income.

So yes, it would be different than the $600 per taxpayer stimulus checks sent out last year, and it would benefit the lowest wage-earners.

But I haven't actually read the plan, this is what I heard last week on NPR. I am wondering why, if what I heard is true, people here at DU make statements like you are in your op.

[sandnsea]

19. It's a permanent tax cut, plus a tax credit

It would be retro-active to 2007, so people would get a check to cover that year, and then a reduction when we file this year, or maybe there would have to be a check for that too so it might be $1,000 - $2,000 in checks and actual tax cuts in the paychecks as well. He could be talking about payroll taxes, but I don't see that in this statement.

"A tax cut for 95 percent of workers and their families -- plus seniors: Barack Obama and Joe Biden propose a permanent tax cut of $500 for workers and $1,000 for families. A first round of these tax credits could be mailed out quickly by the IRS based on tax returns already filed for tax year 2007. In addition, Obama and Biden would extend these expedited tax credits to senior citizens who are retired as a down payment on his plan to eliminate taxes for all seniors making up to $50,000."

http://change.gov/agenda/economy_agenda/

[MH1]

23. 95% of workers and their families

probably puts the limit at about 80K. That's a lot different than cutting the highest marginal tax rate, as Bush did, which only helped the wealthiest 2%.

It was described on NPR as being implemented by reducing the payroll tax deduction, not by mailing checks. But they didn't discuss the retroactive part, which probably would require the mailing of checks.

I think a lower-end tax cut is helpful but not sufficient. It will drive some demand and help people who are struggling make ends meet. It's not the same as giving a stimulus check to someone who has no need to spend it (although within the 95% there will undoubtedly be some who don't need to or won't spend it. Them's the breaks.)

I'm guessing Obama had to include some kind of tax cut because the Republicans said they wouldn't support it otherwise. As long as it's only a cut for the lower end of the wage scale then I'm fine with it as a bargaining tactic, assuming the bill contains other more effective measures, such as investment in infrastructure (but NOT building or widening roads, dammit!) Of course to balance the books ultimately the lost revenue will have to be replaced, either by raising taxes on someone, massive closing of loopholes (good luck with that one), or cutting spending.

[sandnsea]

24. I wish I could find the actual plan

There is a lot of stuff in that agenda that hasn't been discussed at all, like a 10% mortgage tax credit for people who don't itemize. There's $25 billion in that agenda for schools and other infrastructure. I know the road between my house and the next largest city is in desperate need of repair. I don't know what they've been patching it with, but it's a big blotchy mess for 60 miles. A train will not fix our problem.

[MH1]

28. I'm all for repairing existing roads

as long as "repair" doesn't become an excuse to widen roads or build new ones.

There may be places where new roads are actually needed but that's a labrynthine decision process that shouldn't be allowed to get in the way of doing stuff that obviously needs to be done.

I once went to a regional transportation planning meeting and the disproportionate amount of money backing new highway construction vs. increased public transit (as evidenced by the number and dress code of the attendees on each side) would have been hilarious if it wasn't so friggin' serious. And this is in Philadelphia, which has a pretty good transit system that could certainly be improved to accommodate increased travel to the places they wanted to add new lanes to a highway. Sheesh, there's hardly any unpaved area there now, and we don't need to add to the asthma problem with more car pollution. But the big lobbying money is backing new roads, of course.

Anyway, I'd like to see the actual plan, too. I've heard so many different things about it now I don't know what to think.

[sandnsea]

29. It is a herculean effort to get a road

widened out here, let alone a new road. I lived in Nevada for a year and the difference was stunning. It was like one day they decided the two lane road needed to be widened and bam, a few months later they were working on it.

When there's trees and creeks and rivers, it takes years. Nevada, meh, they were just mowing down some cactus, who cares. They were talking about widening a highway in Montana since the early 90s and I don't think it's ever been done. It is an endless process of EIS, community input, alternatives routes, public transit, trains, and on and on. I don't begrudge it, but I don't know that everybody in the country approaches things in the exact same way. That road I was referring to here, that is a mess, they talk about widening it too because it's 2-lane and people are always getting killed on it. But I doubt they ever will. Between the homeowners and the trees and the river, too many problems.

The good news is, there is a proposed high speed rail to run concurrent with I-5, I think it's in that Kerry bill. I am so excited about that because I hate hate hate to drive in heavy traffic. I would love to be able to go to Portland more often.

[stray cat]

32. I think it is a way to help lower incomes and to gain passage of it

if you are struggling to put food on the table you will spend the stimulus. I think it is a good and compassionate idea up to a certain income level that excludes me as I am lucky enough to use it to save.

[NightWatcher]

3. $600 didnt save us, but I bet $500 will

it sounds really stupid when I phrase it like that, doesn't it?

We need jobs, not a tax break on payroll taxes. What if someone doesnt even have a job? How do they benefit from a payroll tax cut?

[SammyWinstonJack]

6. Right and how many millions don't have jobs currently? One right here.

Also, is Obama still planning on letting the bu$h tax cuts for the RICH expire at the end of 2010, instead of rescinding them NOW? Great plan, there. x(

[sallyseven]

18. Well you know how pissy the Repukes

get. He needs to get his stuff passed and they are bad enough right now. Take away their candy and they will riot.

[Tierra_y_Libertad]

27. They're counting on a sudden surge of stupidity in the American people.

Which is usually a safe bet, but this time, rather than spending $500 on frivolities, most people will be paying bills like rent, and buying groceries rather than pumping it into domestic manufacturers.

[sandnsea]

4. Except he promised tax cuts

and a lot of people voted for him based on his tax cut promise, so he has to follow through. And while I think the rebates are a stupid idea, they're about all the working people ever get in these economic stimulus plans, so I'll take it.

[NNN0LHI]

5. The problem is $600 wasn't enough and I said so at the time

$6000 each would have helped is what I said here back then.

$600 is just chump change.

Don

[sandnsea]

7. If they want to free up credit

and fix the mortgage problem, and save the car industry -- give everybody a $10,000 credit to be applied to paying off debt, bringing their mortgage down, or buying a car. Bottom up. They can't stand giving us money, I will never understand why.

[NNN0LHI]

8. Those were just about the same words I used last January on this subject

Even taking the money to update windows, doors, installing a high efficiency furnace and insulating homes would pay off in spades for everyone.

Don

[NightWatcher]

9. since we are pulling money out of thin air, why not give everyone $50K in cash?

we'd stimulate the shit out of the economy. new cars, homes, manufactured goods......

[hobbit709]

11. $50K would pay off the mortgage, buy us a new car with change left over.

[sandnsea]

13. $10,000 household = $2 trillion dollars

They're going to hand out that much anyway. Why shouldn't we get our own money?

[hobbit709]

10. Because the only people that should get money don't really need it.

Poor people don't need money from the government, only millionaires need money from the government.
Didn't you get the memo?

[Deja Q]

12. They can't stand giving workers good wages, especially for good performance

Today's mantra is quantity, not quality, and they don't need to say a word when you look at 75% of what's being sold is of poor quality or is toxic.

Not the best way to build an empire either, but whatever.

[eridani]

21. $6000 is chump change as well, compared to a family wage job

The government should be giving money to people who are rebuilding infrastructure.

[machI]

14. Spending $600 on a foreign made toy at Best Buy will not keep the economy from going down the tubes

When the Roman people became disgruntled, the Emperor would declare a holiday and put on some Gladiator games to keep the masses amused.

Today the Government shells out a few hundred bucks to buy entertainment to keep the masses amused.

Our economy, any economy, needs manufacturing that produces a product the people want to buy. Our best bet right now is to become the World Center for Excellence in clean, renewable energy and sell that technology.

President Obama has been given the opportunity of a millennium to implement a 'Moon Shot' program for clean energy that would both revive our economy today, and keep us on top for generations.

We can't let petty politics from the Republicans from messing this up.

[NightWatcher]

15. coming this Fall on Fox it's Lions vs the Christians in a cage match to the death

[machI]

25. You sure its not the Lions vs the Chargers on Thanksgiving day?

[notadmblnd]

16. Jobs need to be created so people can once again pay into the system.

Tossing people an occasional bone (600.00) so they might be able to catch up on one of their utilities is not gonna solve anything.

[book_worm]

17. I don't think the plan this time is for stimulus checks

it will probably be payroll deductions and geared towards lower and middle incomes. Obama promised a tax cut and he will provide it. The other part of the plan, which some DUers convieniently forget mentioning, and which has the GOP up in arms, is a large jobs bills, perhaps the largest jobs bill in history. This is hardly doing "the same thing" over and over.

[sandnsea]

20. It's for both

A check and a permanent tax cut. See my post above. I didn't realize exactly what it was either.

And people act like there's no money for jobs in the program, but there's billions for all kinds of infrastructure investment, including schools.

[eridani]

22. The tax cut part IS doing the same thing. The money wasted on it--

--would do much more good added to the jobs program. (Which I like, BTW.)

[no_hypocrisy]

26. Well, gee . . . , it worked SO well in 2001 when it was "your" money.

We need decent-paying jobs, not money.

[hfojvt]

35. spending money creates decent paying jobs

I used to work in a factory making 6-packs of pudding snacks. If people don't buy those pudding snacks, then the people at that factory don't have jobs.

[dkofos]

30. That was too little too late.

We really need to steal $2 trillion from the filthy rich
and put it back in the economy.

How do we do that??

TAX THE RICH

[stray cat]

31. It actually did benefit in the short term -but it didn't have anything long term as part of it

[SoCalDem]

33. We "stimulated" the economy with $650.00 of ours

We hosted the rehearsal dinner for our son's wedding.. dinner for about 40 people ..from the menu ...at a pretty nice Mexican restaurant.. I was mentally doing the math ,,hoping I had brought enough money :scared:

[hfojvt]

34. it wasn't $600 per taxpayer

I only got $300 and people also got $300 per child.

[FrenchieCat]

36. Your post is so devoid of any facts,

until it is a real shame.

The tax cuts, THAT WERE PROMISED BY OBAMA ON THE CAMPAIGN TRAIL,
are part and parcel of a larger plan.

For you to "react" as though they are stand alone in their offering is myopic and ill served.

The way that the tax cuts, THAT ARE FOR MIDDLE AND LOWER WAGE EARNERS UNLIKE BUSH'S TAX REBATE,
are to be dispensed is via one's paycheck.

Per my calculation, and that of others, the tax cuts given by way of lowering tax withholdings would equal a 50 cent per hour increase in one's paycheck. That is not enough money to save, but enough for one to calculate into their budget, as it will not be a one time deal. That is a large difference from Bush's one time Tax Rebate offering.

In addition, there would be a EIC increase in the paycheck of those who don't make enough based on their withholding W4 claims, to have Income tax withholdings taken from their checks.

There is also additional ways that the tax cuts will be gotten to the self employed, retiree, and the unemployed:

Some of those items tentavely proposed (the whole plan has actually not yet been proposed) are:

For the Unemployed, an end to the taxing of unemployment benefits and extending unemployment benefits by 13 weeks.

For the Retirees and just all folks, doing away with IRA early distribution penalties for two years on the first $10,000 of IRA distribution

For Retiree specifically, increasing the ceiling of additional earnings before Social Security Benefits are taxed....which I believe is at $25,000 now, and would go up to $50,000 prior to taxing their SS benefits received, as well as not enforcing the 401K forced distribution to seniors if they choose not to (cause I guess 401K values have gone down, and some seniors would rather not touch it and make do--which I guess should be a choice which they didn't have before), but if they need it, any withdrawals made up to the required minimum amount will be exempt from taxation.

The Self Employed are figured into the equation as well, by allowing them to reduce their quarterly prepayment of estimated taxes by the tune of whatever the Tax cut is, $500 to $1,000 (jointly owned business with spouse).
------------------------------

...under what Mr. Obama during his campaign called the Making Work Pay credit, worth up to $500 for individuals and $1,000 for families. The Obama campaign estimated that about 150 million Americans making less than $200,000 would qualify, including those who make too little to pay federal income taxes but would receive a check that would offset Social Security and Medicare payroll taxes.

Mr. Obama’s advisers said Sunday that they were searching for a way to get that credit into Americans’ pockets quickly to help stimulate spending, but would not duplicate the rebate checks sent last year as part of an economic package signed by President Bush. Instead, they said, they were discussing making the credit retroactive to the 2008 tax year and adjusting withholding formulas so that paychecks would start reflecting that right away.
http://www.nytimes.com/2009/01/05/us/politics/05spend.html?_r=1&hp=&pagewanted=all

The tax cuts that are being considered would equal $500 a year for working individuals and $1,000 for working couples. The cuts would be in the form of a payroll tax credit. That’s good news for workers because it’s an immediate benefit - no wait for IRS checks. Employers will make the adjustment during the year by reducing federal tax withholding; workers not subject to withholding will likely be able to apply for a refund at the end of the tax year. And yes, there will likely be phaseouts and caps - meaning at an as yet unmentioned income level, the credits would be reduced or not apply.
http://www.taxgirl.com/obama-proposes-tax-cuts-whats-in-it-for-you/

I trust that self-employed individuals will be allowed a similar $500 credit on the 2009 Form 1040 – so that they can reduce their quarterly estimated tax payment for the first quarter by $500.

It is touted as a “payroll tax credit”. My question is - Is it a credit against federal income tax or against actual payroll tax (FICA and self-employment tax)? I will be interested to see just how the mechanics of this credit will work, both now and on the 2009 Form 1040.
http://wanderingtaxpro.blogspot.com/

[eridani]

37. Here are the facts

We ought to be getting the most bang for the buck, and tax cuts (other that the temporary payroll tax holiday) are not it.

http://www.motherjones.com/news/feature/2009/01/stimulus-is-for-suckers.html

In bang for the buck order (stimulus to the economy for every dollar spent), the best ways are

$1.73--food stamps
$1.64--extending unemployment benefits
$1.59--infrastructure spending
$1.36--direct aid to states
$1.29--payroll (i.e Social Security and Medicare payment) tax holiday
$1.26--refundable tax rebate
$1.03--across the board tax cut
$1.02--nonrefundable tax rebate

The following ways of spending a dollar leave us FAR WORSE off--

$0.48--extending AMT patch
$0.37--making dividend and capital gains tax cuts permanent
$0.30--corporate tax cut
$0.29--making Bush income tax cuts permanent
$0.27--accelerated depreciateion

[FrenchieCat]

38. We whadda know......most that you have listed in the top half

is exactly what Obama is proposing and then some.

[eridani]

39. His plan is a start, but needs more focus on the top end

The $600 dollar giveaway thing has already been done, and it failed. I'm advocating backing off of the tax cuts and putting the money saved into the jobs part, which I think is very good.

[FrenchieCat]

40. You are making pronouncement based on apples,

when we are discussing oranges.

Whatever you advocate, you should be more truthful in your quest to sway....otherwise, you are no better than the other side who also exaggerates and conflates issues in order to sell their point. That's a cheap and easy way of doing business, but it is also void of any ethical standards.

[Political Heretic]

41. Excuse me, but the tax cuts to businesses for hiring were NOT what was discussed on the trail

That's what I'm talking about.