Political Irony

11 Comments

1. ebdoug wrote:

   Gosh, are we surprised that John Boehner and his thugs are going to oppose rescinding tax cuts to the rich?

   http://start.localnet.com/article.php?article=D9H5D8880.html

   Saturday, July 24, 2010 at 6:20 am | Permalink
2. patriotsgt wrote:

   Read what is actually in those tax breaks a little closer. Those tax cuts also affect many lower and middle class tax payers. The “wealthy” tax cuts also capture many, many small businesses that work in the LLC, or sole prop. status and who are employers as well. Those tax cuts are not just for the wealthy, but you and me also my friend. The proponents for expiraqtion will not tell you that.
   Now if congress would just rework that tax break package instead of all or nothing, then we could put together something that actually works. It seems oxymoronic to cut taxes with a ballooning deficit, without cutting spending as well. What to do? Any ideas, am I totally out to lunch on this one?

   Sunday, July 25, 2010 at 10:48 am | Permalink
3. Iron Knee wrote:

   Yeah, I’m one of those small businesses whose taxes would go up when the Bush tax cuts expire and I say, let them expire. Obama already “reworked” taxes by giving everyone a big cut as part of the stimulus bill (the largest middle class tax cut in history). The economy is recovering and businesses are starting to grow again. Employment is one of the last things to recover, but my company is doing its part — we have doubled in size in the last few months. So by the time the Bush tax cuts actually expire, it will be time to start paying down the deficit. It is just good policy and the best thing for the country.

   On the other hand, I’d love to cut spending, like the spending on two wars, the subsidies to oil companies, banks, insurance companies and other large multinationals. Although I’m sure the Republicans would filibuster those spending cuts.

   Sunday, July 25, 2010 at 12:05 pm | Permalink
4. Jonah wrote:

   According to the article linked below, a very small percentage of SBO’s would be affected. If the deficit is reduced as a result of the rollback, that should satisfy the deficit hawks, improve confidence in the US economy, and in turn drive the business of all small businesses. I would argue that 3% of the amount in excess of 250 K ( the increase as a result of the rollback) can easily be regained though an improved economy. I am not one of those affected so its probably easy for me to write that.

   http://www.cbpp.org/cms/index.cfm?fa=view&id=2697

   Sunday, July 25, 2010 at 12:17 pm | Permalink
5. Iron Knee wrote:

   Good link, Jonah. In case others didn’t read it, they point out that only 8.9% of people with any small business income have taxable incomes greater than $250,000, and of those people, only approximately 1.9% would be affected by the expiration of Bush’s tax cuts. That means that that only 0.17% of small businesses (and only those with plenty of money) would be affected.

   So can we stop with the “Those tax cuts also affect many lower and middle class tax payers” lie?

   Sunday, July 25, 2010 at 1:22 pm | Permalink
6. patriotsgt wrote:

   Iron Knee, I love the debate and you are definately a tough cookie on this issue, but we must disclose all points of view and explore more than liberal sources such as the Center on Budget and Policy Priorities to give a complete picture. Please read this link by The Tax Foundation (est 1937), Concerning: Who Benefited Most from the Bush Tax Cuts?
   http://www.taxfoundation.org/news/show/26315.html

   Also, for your readers and yourself here is a calcualtor to help determine your 2011 tax liability under 3 different scenarios.
   http://www.mytaxburden.org/
   With the tax cuts, without and under Obama’s propsals included in his new budget. Which by the way could be a good compromise for both sides, but you didn’t hear that from me. I have not found the proposal to read over, but am taking the word of The Tax Foundation, where I got this info.
   Using this calculator and some older tax data of my own I came up with the following numbers:
   Adjusted Gross Income: 70,000
   Deductions and Exemptions
   Personal Exemptions: 22,200
   Itemized Deductions: 24,900
   Standard Deduction: 0

   Taxable Income: 22,900
   Regular Tax: 3,435
   Alternative Minimum Tax: 0
   Income Tax Before Credits: 3435
   Child Tax Credit: 1,500

   Income Tax if All Bush Tax Cuts Expire: $1,935
   Income Tax if Bush Tax Cuts are Extended: $417 refund
   Income Tax under Obama’s Tax Proposals: $1,217 refund

   I understand these are rough numbers and everyone is different. Lower income people ie, those with combined incomes 50,000 and below don’t pay tax, but still get refunds. The refunds will go down if the cuts expire, but this data is not figured in with the numbers from the cbpp.

   Please review, then let me know your thoughts.

   Sunday, July 25, 2010 at 5:41 pm | Permalink
7. mickey wrote:

   Knee, I fail to see the “lie” in saying that you, me, and EVERYONE else’s tax burden will be affected negatively (including lower income people who actually pay any taxes).

   But I can definitely see a lie in the following:

   “If you make less than $250,000 a year, you will not see one dime of your taxes go up. In fact, you will get a tax cut.”

   I wonder who said that.

   Sunday, July 25, 2010 at 7:47 pm | Permalink
8. ebdoug wrote:

   PatriotSGT: For 28 years, I prepared Tax Returns. 7000 of them over that time. I watched the Bush Tax Cuts come in. I know what they did; especially to me who has always kept the price low that I charged for tax returns because I live off dividends. “Qualified” non taxed dividends due to Bush. When his tax cuts went into effect, I and my siblings ageed that it wasn’t right. OK, we have benefitted over the last eight years, but we should not have.
   Mickey: What I can see will have to those with incomes under $250,000 is that there will be a tax on their dividends and the capatal gain will be higher (20% max instead of 15% max). When I pointed this increases out to my tax clients each said “Yeh, that’s all right.”
   The wealth redistribution that has happened over the last eight years has to stop. The rich got richer, the poor got poorer (poor meaning the middle class)
   Now you may know of other increases to the middle class. Fill me in.

   Monday, July 26, 2010 at 5:52 am | Permalink
9. patriotsgt wrote:

   OK Iron Knee, one last point. I believe the philosophical difference between fiscal conservatives (including some repubs and dems) and fiscal liberals is the following.
   You are an employer, you hired 2 people this year. If the gov’t increases your tax burden this year by 15-20k what is the likelyhood you’ll be able to hire a 3rd or 4th person next year? Conservative thinking says isn’t it better to put that tax money in your hands where you will have a more direct impact on job creation and economic growth.
   The fiscal liberal says the gov’t should get that tax because they can spend it better. However we all know the govt’s overhead is considerably more than yours. How much of your gov’t controlled 15-20k would actually go to creating a job? 1-2k at best? Where’s the better bang for the buck?
   2nd example. I’m fortunate to be a middle class guy who lives in a upper class neighborhood. Most of my neighbors probably fall into that 200k plus category. Most of these folks hire multiple small businesses to perform alot of the upkeep on thier homes. Landscapers, detail car washing, window washers, painters, home repair. Whereas I do these things myself, because I must. If we take too much expendable income, we hurt many local small business who depend on these wealthy customers for their survival. I’ve already seen 1 neighbor buy his own lawnmower this year and he and I are the only ones who cut their own yard (out of 18 houses). True enough those making well above the 250k income will likely continue using these services, but may not get that renovation, or addition done that would employ 5-10 guys for a summer.
   I’ll give you the last word.

   Monday, July 26, 2010 at 6:02 am | Permalink
10. patriotsgt wrote:

    Ebdoug, good points. I understand the capital gains issue. They will go up, and possibly to 28%. Thats huge for a small time real estate investor like myself who owns a few rental properties. If I attempt to sell I have to pay the 24-28% on the depreciated gain and normal tax rate on the rest of the diff between basis and sale price. During the last several years I wanted to decrease my depreciation, or not depreciate at all. It would have raised my taxes in the current year, lowered my obligation for the future. However, the IRS won’t let you, basically they will calculate the CG tax as if you have depreciated the max and charge you.
    I think that stinks, but it’s the rules we must play by. Maybe you have some advice, the properties were investments for college money for our kids. If I sell the longest held after the increase, I’ll pay 57k in taxes and net 37k after fees and taxes, maybe 1-2 years of college if i’m lucky.

    Monday, July 26, 2010 at 6:21 am | Permalink
11. ebdoug wrote:

    patriotsgt: Your points on hiring people. I agree with you, it gives them jobs. I’m 65 and single and having four acres, I need help. I have found a 15 year old boy who will help. Others I have to wait and wait and wait for. No one wants to work. So I have two riders, one hand mower and one none power (or powered by adipose tissue)
    Geitner says top CG will be 20%. Of course, congress will decide. To offset your gain, you need to have some nice inherited stock that you never paid for and has lost value since you inherited it. Offsetting the gain with a loss. Most people play that game. Of course, if you invest with the big ones: Morgan Stanley, etc. you will have nice losses. I watched my clients lose and lose and lose with the big crooks. I go with Vanguard and don’t lose.
    Home repairs. I’ve had a new toilet waiting here for two months to get installed. I gave up last night and tried to do it myself. I lucked out as the toilet was broken to begin with. My patience lasts only so long. Of course, if I install it myself, and it starts leaking sewer gas, I might be able to get help in a hurry. Like getting my plumber neighbor. I’m still waiting for him to install a new sink. He told me three years ago, he’d be there in February. He just never said what year.

    Monday, July 26, 2010 at 10:00 am | Permalink