Tax Cuts Extended to All Americans

[Danmar]

I'm not saying it would necessarily lead to full-scale revolt, but there could certainly be an increase in "civil disobedience" and "nonviolent resistance" at a minimum if the "wealth gap" continues to widen and the middle class continues to shrink. I'd sooner not test the theory anyway...

Still agree. Previous post more entertaining though.

 

[FinanceDude]

I'd love to see some evidence to support that claim.

Tell me who creates jobs then........

 

[ziggy29]

Tell me who creates jobs then........

It's complicated. The *supply* comes from those who have the businesses that need more labor. But I think the *demand* comes from more people able to buy something they couldn't previously afford or justify, and I don't think that's a common problem in the two highest tax brackets.

But give me a tax cut and I'm not spending it; I'm saving it just I do with all of the cash flow that currently exceeds my expenses. And I'll bet a lot of people who are a lot wealthier than me aren't going to go on a spending binge if their taxes are cut 3% (or not raised 3%). If they already have more income than they need to spend, I don't see them spending only because they can. Wealthy people didn't get that way because they are reckless with money (usually).

And if the tax cuts aren't spent -- not used to increase demand for goods and services -- that doesn't stimulate much or create a heck of a lot of jobs. Give it to the middle class which may have pent-up demand for stuff that rich folks never had to put off buying if they really wanted it, and you are more likely to increase demand.

Still, I do agree that it's not the best way to bring up the wage *earner* by bringing down the wage *payer*. But I don't think tax cuts on the highest earners will increase demand or stimulate their purchasing much. That extra money likely won't make a huge difference in the lifestyle of someone earning $500K. But for someone earning (say) $50K a year, it does.

 

[Texas Proud]

OK, in spirit I agree -- but with real unemployment around 16-17%, what's the alternative?

If you are unemployed and NOT getting a check you will be willing to do some things you are not willing when you get a check (even a small check)...

Also, I am not saying we should not have unemployement... I just think the 26 weeks was long enough for someone to make a change if necessary...

 

[Texas Proud]

I don't know how this "third year" business got started. In some states, workers could get up to 99 weeks of unemployment due to prior extensions. Those extensions ran out at the end of November. Without this renewal of the extensions, benefits would have stopped sometime after 26 but before 99 weeks. The renewal just gets back to 99 weeks.

The maximums vary by state, depending on the unemployment rate in that state. Here's a table for NY: New York State Department of Labor - Breakdown of Additional Benefits

The proposal is to increase the current '99ers' an additional 50 something weeks... IIRC, it was 56 weeks to a total of 155... to me, that is 'three years'...

Your link is for the current program, not the proposed one...

 

[Independent]

The proposal is to increase the current '99ers' an additional 50 something weeks... IIRC, it was 56 weeks to a total of 155... to me, that is 'three years'...

Your link is for the current program, not the proposed one...

I thought the discussion was about the link in the OP.
Who's proposing another 56 weeks?

 

[bizlady]

So social security in the employees paycheck it appears will go from 6.2% to 4.2% in 2011.
Any goodies in there for the the self employment tax does anyone know??

 

[Texas Proud]

I thought the discussion was about the link in the OP.
Who's proposing another 56 weeks?

I saw on the news that if the Repubs get the full tax break then the Dems get an additional 56 weeks of unemployment for all the '99ers'....

But like anything in flux.... I could be wrong....

 

[EllisWyatt]

As someone trying to sock away as much as I can in the short window before I pull the plug, I'm thrilled that not only is the govnment NOT taking additional taxes, but -through the 2% SS withholding break - actually helping me in my last year(s?)( I hope not) of accumulation.

I will definately be saving the additional $$, which should help grow the economy. Why? Because, like most people who save, I don't put my cash in a coffee can in the backyard - I invest it in companies who (hopefully) utilize it to grow, which should help the economy (as well as me!).

 

[jdw_fire]

does anyone know how the cap gains taxes are affected by this proposal?

 

[EllisWyatt]

As an aside - I'm still trying to figure out the logic of this deal.

According to the NYT, it will cost >$900 billion. Of that, $336 billion cost is the continuation of the current tax rate for those making >$250k/yr (not quite sure how not getting additional revenue is now a cost, but I'll leave that to greater minds)
What has me kerfluffelled is - I heard over and over that we couldn't afford leaving the current tax rates in place for those making over $250K. Question: If we couldn't afford the "cost" of continuing the current tax rates for everyone, how are we going to afford the additional $564 billion that just magically appeared in this bill proposal?

Could we really have afforded the $366 billion in the first place or was the whole arguement just crafted to justify not doing something they didn't agree with ideologically ? Note: the two are obviously not mutually exclusive - we're talking politicians, after all.

 

[HFWR]

Could we really have afforded the $366 billion in the first place...

No...

...or was the whole arguement just crafted to justify not doing something they didn't agree with ideologically?

Yes

 

[HFWR]

As to the question of extending UE benefits, I agree that one should try to get a job - any job. However, if you're a highly educated, and formerly highly paid individual, many businesses will not hire you, because they figure you'll be moving on asap...

Been there, done that...

 

[Gumby]

I saw on the news that if the Repubs get the full tax break then the Dems get an additional 56 weeks of unemployment for all the '99ers'....

But like anything in flux.... I could be wrong....

This guy says the proposal on the table does NOT extend UI past the 99 weeks.

Kid Dynamite's World: No - People Are Not Collecting 13 More Months of Unemployment Benefits

 

[haha]

Poor people will always vote to have rich people pay for their lives. Why not? Especially when senators are fomenting this class consciousness and dehumanizing the people who would be expected to pay more.

But actually, well off people have no real interest in paying for those that they see as leeches. They are no more fond of these people than the poor people are of the rich demons.

Now I understand that there are plenty of well off people on this board who are quite distributionist- but their love comes cheaply. They might have plenty money, but they intend to keep income low or work other strategies to avoid picking up much if any of the check. In fact, they may even expect to get a net inflow, depending on how things shake out. It is virtue and a feeling of superiority that they can attain cheaply.

I am 100% against it on principle. But the stupidest part of the whole thing is that these RICH PEOPLE (read as devils) are defined as single over $200,000, married over $250,000!

Could anything be more stupid? A school teacher with a master’s in some meaningless discipline married to a middle school principle might easily have this income in many large school districts. Most doctors, many software guys, etc etc, do it single, on one income. Even some rank and file public servants would be at this level or pushing it if their benefits were added back at their true value.

Income inequality doesn't come from any bad faith, it comes from the fact that somewhere along the way the world changed, and for the most part one has to be smart and well disciplined to make good money. Intelligence and discipline come on a bell curve. Most of us have some, a few have very little, and a few have a whole lot. No more $80,000 job machine bolting on panels in Michigan and calling in sick on Monday. Too bad, it made a very nice society while it lasted. Boeing is called the Big Easy, and Detroit once was the same.

And there is a joker too- even if one has the attributes, he had better hope for some luck too.

Some could be addressed at the source, by better industrial and trade policy and a sensible education system and intelligent financial regulation. But none of this is going to happen, take it from me.

It is over, all over, and not going to return. I had the most enlightening conversation a couple days ago with a Japanese woman at an oyster bar. She said living close to China teaches you a lot about reality, and teaches it quickly.

Ha

 

[youbet]

As to the question of extending UE benefits, I agree that one should try to get a job - any job. However, if you're a highly educated, and formerly highly paid individual, many businesses will not hire you, because they figure you'll be moving on asap...

Been there, done that...

I think that scenario tends to be true. But my own observations (limited and anecdotal - I confess up front) are that some folks with not-in-demand sophisticated skills just assume they won't get that "burger flipper" job and never even try.

Not good.......

 

[youbet]

I am 100% against it on principle. But the stupidest part of the whole thing is that these RICH PEOPLE (read as devils) are defined as single over $200,000, married over $250,000!

Ha

Have you noticed how often that media talking heads and article writers seem to confuse this. I often hear "only people making over $250k will pay the increased tax rates." Actually, the only people who could make $251k and not pay higher taxes would be those married to a spouse with zero income. Not a very expansive group.

I also find it amusing how the media and many politicians refer to those making over $200k as those "millionaires and billionaires." Somehow putting a high school principal and her mid-manager hubby with a combined income of, say, $290k into the same marginal tax bracket as Bill and Melinda Gates seems wrong on so many levels. What are they thinking?

Not to mix this with the remarriage thread running concurrently, but 2 folks each making $200k would have to really be in lovey dovey to marry and take on that tax penalty. Stay single and you're in the second highest bracket. Marry and you're deep into the highest bracket (with no additional combined income). It just doesn't make any sense.

 

[clifp]

does anyone know how the cap gains taxes are affected by this proposal?

The extension also applies to leaving capital gains at 15% and I believe 10% for the lowest bracket (not 100% sure on that), and treating dividends at capital gains. If the cuts expire capital gains go up to 20% and dividends are treated as ordinary income.

 

[haha]

Not to mix this with the remarriage thread running concurrently, but 2 folks each making $200k would have to really be in lovey dovey to marry and take on that tax penalty. Stay single and you're in the second highest bracket. Marry and you're deep into the highest bracket. It just doesn't make any sense.

Certainly true, but then singledom makes a pretty good case for itself even with no help from the tax code.

Ha

 

[GregLee]

But the stupidest part of the whole thing is that these RICH PEOPLE (read as devils) are defined as single over $200,000, married over $250,000!

Could anything be more stupid? A school teacher with a master’s in some meaningless discipline married to a middle school principle might easily have this income in many large school districts.

Easily? Really? You seem to live in a very different world from mine. My wife and I just retired from being college professors, and our combined income, with 39 years of seniority, never came close to $250,000. It was about a quarter of that. That $250,000 sure sounds rich to me.

 

[Martha]

Now I understand that there are plenty of well off people on this board who are quite distributionist- but their love comes cheaply. They might have plenty money, but they intend to keep income low or work other strategies to avoid picking up much if any of the check. In fact, they may even expect to get a net inflow, depending on how things shake out. It is virtue and a feeling of superiority that they can attain cheaply.

Doing some mind reading again Ha? I have had years where I paid six figures of income taxes, including a pile of AMT. I still was strongly in favor of a progressive tax, still in favor of doing more for the poor. My attitudes never changed with my income or my tax bite.

 

[haha]

Doing some mind reading again Ha? I have had years where I paid six figures of income taxes, including a pile of AMT. I still was strongly in favor of a progressive tax, still in favor of doing more for the poor. My attitudes never changed with my income or my tax bite.

Not mind reading, just me being full of it. Nothing in this world applies to everyone, and my generalization clearly does not apply to you. I knew that when I wrote it. Sometimes I am totally full of it, but I still say it strong.


Bill Gates and Bill Gates Senior share your stand, and they too have something on the line.

I apologize to you , and in advance to anyone else on the board who supports this and will pay up if this soak those nasty fat cats thing comes to pass.

I was just saying, that in general this sort of attitude is cheap for a retired person.

Ha

 

[Gone4Good]

It is hard to understand. But every effort to turn this into a national issue has fallen flat.

There's been a tremendous sales pitch that's been going on for a couple of decades now that seems to have really made an impact. It's gotten to the point where many folks think the only thing that matters to the economy is the level of marginal tax rates. But don't ask them to reconcile faster growth and lower unemployment during the 1990's when taxes were higher than during all of the 2000's when rates were lower. Or faster growth rates in the 50's when marginal rates were much, much higher.

 

[Alan]

Easily? Really? You seem to live in a very different world from mine. My wife and I just retired from being college professors, and our combined income, with 39 years of seniority, never came close to $250,000. It was about a quarter of that. That $250,000 sure sounds rich to me.

I agree. DW and I (engineers) occaisionally grossed more than $250k but by the time you add in your deductions, pay your max 401k ($40k), pay your health insurance premiums before tax, put another few thousand into an FSA and we were tens of thousands of $ below the taxable threshold of $250k. (and we didn't have a mortgage - high earners often have BIG mortgages which also lowers the taxable gross but I suppose may get caught with AMT - we never did)

You have to earn way over $250k to hit a taxable income over $250k, and even then it is only the excess over the higher band that gets taxed at the higher marginal rate (5% more).

So, a couple may earn $300k gross, and can easily have a taxable income of only $250k. All the "lost" taxes reported in the news must be from the uber-wealthy.

 

[Gone4Good]

Easily? Really? You seem to live in a very different world from mine. My wife and I just retired from being college professors, and our combined income, with 39 years of seniority, never came close to $250,000. It was about a quarter of that. That $250,000 sure sounds rich to me.

You're wasting your breath. We've had similar conversations here before. The median household income in the U.S. is $50,221 but somehow making 5 times the median never qualifies as "rich" on these boards (and as pointed out above, you probably need to make six or seven times the median to have taxable income of $250k once all of the breaks are figured in). I suspect the disconnect is because this is a well-to-do lot that sees themselves as "middle-class" even when they aren't.