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Taxes are down--but don't try to convince a Tea-bagger!

PearlSB4U avatar
PearlSB4UBeach Fanatic
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Taxes are down--but don't try to convince a Tea-bagger!

Super rich see federal taxes drop dramatically ?| ajc.com

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14
AndrewG avatar
AndrewGBeach Fanatic
#2
Spending is off the charts--but don't try to convince Obama's butt sniffers.
30ashopper avatar
30ashopperSoWal Insider
#3


Review & Outlook: Where the Tax Money Is - WSJ.com

Interesting graph from the WSJ. The gold mine isn't in people who make over 200K, it's in those that make 100-200K. If you really wanted to generate some revenue, raise taxes on everyone who makes between 50K and 500K. Taxing millionaires might make one feel good, but it'll not generate the revenue most think. You have to tap the middle class.
GoodWitch58Beach Fanatic
#4
Poll: Best way to fight deficits: Raise taxes on the rich | McClatchy
Alarmed by rising national debt and increasingly downbeat about their country's course, Americans are clear about how they want to attack the government's runway budget deficits: raise taxes on the wealthy and keep hands off of Medicare and Medicaid.

At the same time, they say that the government should not raise the legal debt ceiling, which the government must do soon to borrow more money, despite warnings that failing to do so would force the government into default, credit markets into turmoil and the economy into a tailspin.

Read more: Poll: Best way to fight deficits: Raise taxes on the rich | McClatchy

Edited

30ashopper avatar
30ashopperSoWal Insider
#5
Let's say we raise taxes on people who make 250K a year or more by 20%.. that would generate about 300 billion a year or so. Keep going Glenda, you need to make it to 1.7 trillion to pay for what Obama is spending today.
poppyBanned
#8
When you get to 1.7 trillion in additional revenue.. let me know, we can discuss.

This is the time of year when we are most aware of our tax burdens. But what we may be less aware of are all the huge tax breaks built into our system. Most Americans benefit from one or more -- but it's the wealthy who benefit the most.
The government spends money through appropriations and writing checks, but it also showers individuals and companies with a astonishing array of special exemptions, credits and deductions that amount to a $1.1 trillion giveaway each year. (For comparison: the big budget fight that concluded last week cut spending by about $38 billion.)
About half of the money lost to "tax expenditures" comes from the 10 breaks listed below.
Few of the biggest breaks directly benefit corporate America. Most are widely distributed among the population and are meant to reward and encourage what is generally considered responsible behavior. Each break also represents a powerful, and in some cases broad-based, constituency.
But in stark contrast to, say, social programs, tax breaks vastly favor the rich over the middle class and the poor.
They vastly favor people who own homes (especially expensive homes), can put a lot away for their retirements, have generous health insurance plans and live in high-tax states. Even something as simple as the deduction for charitable donations favors the wealthy: Because they pay higher marginal tax rate, they get a bigger federal subsidy for each dollar they give.
Some of these terms may require a little explanation:
1. Tax-free health insurance contributions. The tax exclusion for employer-provided health benefits is the single largest tax break -- it alone will cost the government $1 trillion in foregone taxes over the next five fiscal years. This huge tax expenditure massively subsidizes the nation's employer-based health insurance system. It also provides an incentive to employers to overspend in health benefits (which are tax free) and pay less in salary (from which, of course, the IRS takes a bite). This tax break only helps families with at least one member employed by an employer who offers them health benefits. Others have to buy health insurance with after-tax dollars.
2. The mortgage interest deduction. The second-largest tax break is essentially the nation's largest housing program. By letting taxpayers who itemize deduct the interest they pay on their home mortgages, the government massively subsidizes home ownership. The more expensive the home -- and the higher the homeowner's tax bracket -- the bigger that subsidy is.
3. Treatment of capital gains at death. When you die, the government forgives your capital gains tax on appreciated assets that you pass on to your heirs. In accounting terms, this is the "step up in basis" on death. From the heirs' perspective, it means that the "basis" going forward (the amount above which anything is considered taxable capital gains) is the value of the asset at the time they received it. So if you buy stock at $1,000 and it's worth $10,000 when you die, your heir gets $10,000 as the basis. No one ever pays taxes on the $9,000 in appreciation. Now imagine a multi-million-dollar stock portfolio and multi-million-dollar homes -- and you're talking real money.
4. Tax-free contributions to 401(k)s. Federal government policy encourages savings for retirement by allowing employees and employers to make tax-free contributions to retirement plans, the most common of which is the 401(k). This break is a big gift to the financial securities industry, which is where most of this money goes, and to the very wealthy. Indeed, the bulk of benefits go to high-income households, while little goes to the lower and moderate income households. There are limits to how much can be contributed tax-free, but the amount of tax foregone through contributions to 401(k) plans, along with employer plans, when combined still make tax-deferred retirement savings the second largest tax expenditure.
5. Exclusion of net imputed rental income. Homeowners don't pay themselves rent. If they didn't own their own homes, they would pay rent -- and whoever received that rent would have to declare it as income and pay taxes on it. But this "imputed rental income" goes untaxed -- another major subsidy to homeowners. The foregone rent is called "imputed rental income," and the White House Office of Management and Budget calculates the foregone tax that results from it at $50 billion a year.
6. Deductibility of state and local taxes. The rationale behind this deduction is that taxes paid to state or local governments reduce a taxpayer's ability to pay federal income tax. But state and local taxes essentially "pay" for services that, if purchased directly by the taxpayer, would not be deductible. The benefits of this deduction are disproportionately enjoyed by the wealthy, property owners, and residents of high-tax states. Because so many of those high-tax states are blue, this is one tax deduction that some conservative activists actually want dead.
7. Acclerated depreciation. The tax code allows businesses to deduct the costs of investing in such things as equipment faster than the objects in question actually wear out. Seth Hanlon writes for the Center for American Progress: "Accelerated depreciation in general should be thought of as a multibillion-dollar federal spending program that subsidizes business investments. And when they single out specific industries for special benefit, depreciation rules are akin to spending 'earmarks.'"
8. Capital gains. Salaries, rents, royalties, interest -- they're all considered regular income by the IRS, and get taxed at marginal rates up to 35 percent. But income from the sale of capital assets held for more than a year is considered long-term capital gains, and gets taxed at a flat 15 percent rate. This is a huge windfall for the investor class -- and represents a quarter of a trillion dollars in lost revenue over 5 years.
9. Deductibility of charitable contributions. The IRS allows taxpayers to deduct charitable contributions from their taxable income. This amounts to an approximately $43 billion a year subsidy to charitable organizations -- and because of progressive taxation, the deduction is more valuable to rich taxpayers than to poor ones. One scholar recently proposed doubling the deduction temporarily to stimulate job growth; but there is actually more talk about reducing or adjusting it instead.
10. Employer plans. This refers to employment-based retirement plans other than 401(K)s. See No. 4.

Edited

30ashopper avatar
30ashopperSoWal Insider
#9
Assuming those numbers are correct and apply to all earners, you could eliminate all of those tax breaks, plus the 20% increase on people who make 250K a year or more, and you would still be 800 billion short in paying for Obama's budget. Keep going...
Geo avatar
GeoBeach Fanatic
#10
Calling it the way I see it-

Critics of our elected officials from the left want to end the tax cuts AND cut spending.

Critics of our elected officials from the right want to cut spending. When u point out to them that the tax breaks should end they tell you to keep cutting spending.
MrMentalFitness avatar
MrMentalFitnessBeach Fanatic
#11
Spending is off the charts--but don't try to convince Obama's butt sniffers.

Now, I was going along just fine and dandy today until you put that image in my head. Now it's all I can think about.
Rita avatar
Ritamargarita brocolia
#12
Calling it the way I see it-

Critics of our elected officials from the left want to end the tax cuts AND cut spending.

Critics of our elected officials from the right want to cut spending. When u point out to them that the tax breaks should end they tell you to keep cutting spending.

This traces the history of a republican talking point, "Washington does not have a revenue problem. Washington has a spending problem." - Boehner; Majority Leader Eric Cantor; Orrin Hatch; and whoever else got the memo.

"Not a revenue problem, a spending problem": Tracing the history of a Republican talking point. - By David Weigel - Slate Magazine

On March 28, 1982, Reagan addressed the National Association of Realtors in Washington. His first tax cuts had been passed into law. The economy was still in the dumps. Unemployment was 9 percent. The eggheads wanted to know why, during a recession, they shouldn't worry about shrinking tax revenue when defense and entitlement costs were ballooning. ..... "We don't have a trillion-dollar debt because we have not taxed enough," said Reagan, "but we have a trillion dollar debt because we spend too much."

... When Reagan spoke to Realtors, taxes were far higher than they are now. The top marginal rate—there were then 12 rates—was 50 percent. The bottom rate was 12 percent. But Reagan's tax cuts didn't shrink the debt, and they didn't increase tax revenue as a percentage of GDP. In 1981, tax receipts were 19.6 percent of GDP; outlays were 22.2 percent. For the next six years, as Reagan agreed to some tax increases, revenue stayed lower and outlays stayed higher. It wasn't until 1987, the year after a massive tax simplification that cut the rates and the number of brackets, that outlays fell below where they had been in 1981. It wasn't until 1998 when revenue got back to that level.

... We have a spending problem and a revenue problem. And if you talk about one, and not the other, you're not taking either problem very seriously.


It is their standard way to drive their message - if you say it often enough, it becomes true.


.

Edited

30ashopper avatar
30ashopperSoWal Insider
#13
I'll believe a party is serious about the debt problem when they present a plan that balances the budget within four years or so. Neither party has done this, so IMHO, neither should be given any credit. Here's a quote from wikipedia on the 2012 budgets that sums things up for me:

"The Obama administration's spending request contains $2.627 trillion in receipts and $3.729 trillion in outlays for 2012. The Republican plan contains $2.533 trillion in revenues and $3.529 trillion in outlays."

No matter which party you go with, both aim to add another trillion in debt in a little over a year. Epic fail.
scooterbug44 avatar
scooterbug44SoWal Expert
#14
The only true failure is doing nothing IMO.

I would love it if we balanced the budget in 4 years, but I'll settle for slightly longer.

What I will not find acceptable is the continuation of the nonsense as the politicians dance around the REAL issues preventing that from happening.
AndrewG avatar
AndrewGBeach Fanatic
#15
I'm all for tax increases only if we are forced to cut spending and wasteful entitlements. Increasing taxes with no real attempt to slash spending is what usually happens. It has to change.

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