Tax cuts, just got this?? I need help.

[Barnyard]

I'm still working with my daughter about the election and Kerry.

She sent me a subject on taxes off http://www.factcheck.org/article281.html that I know very little about. The first thing that came to mind was to get help, get help from those in the know. I need help to understand these numbers. I've got an idea that tax numbers can be pushed around to seem something that they are not. Am I right? I know that our taxes are not fair. Infact they are unconstitutional in many ways. I need some ammo to fight back. help.

[Nick M]

Yes it is a spin. In numbers more middle and low income people got tax cuts. Because the richest americans pay 80% of the bill the numbers can be made to look like they got more. The Bush plan was a 1% across the board tax cut if a person earning $10,000 got 1% they get $100 at $1,000,000 they got again 1% which would be $10,000. This is how the Dems spin it to make it look like Bush was favoring the wealthy.
Things to take into account Who signs paychecks?
Most important thing to remember is the tax cut was 1% across the board.

[Nick M]

And by the way Factcheck is not a very deep thinking group of people. It's from the University of Pennsylvania, I believe. For instance they say Reagan did have a 9.2% unemployment rate. The whole story is un employment was climbing before Reagan took office and three years into his first term the numbers drastically turned around. With out the whole story factcheck is very misleading

[RandomNY]

"With out the whole story factcheck is very misleading"


Isn't that IRONIC? Factcheck.org not giving all the facts and misleading people. [img]smile.gif[/img]

[Taxman]

There are three major factors skewing their numbers.

1) The lowest quintile does not include those with a negative tax burden. In other words, those who went from paying taxes in the lowest bracket to not paying taxes in the new 10% bracket are not counted. The reasons for this are a direct result of the Bush tax cut: elimination of the "marriage penalty", increase in the child tax credit, broader range in the EIC, ect.

2) The study groups individual, corporate, partnership, estate, and gift taxes together. This gives a very misleading view. For example, it's asking you to compare the tax burden of a single mother against that of a Fortune 500 company!

3) The table does not reflect changes that effect taxable income before it even gets to the 1040! One example of this is the loosened rules on Section 125 plans that allow employees to use pre-tax dollars to pay for such items as medical expenses, dependant care, and adoption. Another factor missing from the equation is the effect of the reforms on S-corps, which allow small business owners the ability to greatly reduce their self-employment tax (in some cases by as much as 75%!) and to take advantage of the corporate shield without subjecting themselves to the double taxation of standard C-corps.

[danger2112]

Originally posted by Taxman:
There are three major factors skewing their numbers.

1) The lowest quintile does not include those with a negative tax burden. In other words, those who went from paying taxes in the lowest bracket to not paying taxes in the new 10% bracket are not counted. The reasons for this are a direct result of the Bush tax cut: elimination of the "marriage penalty", increase in the child tax credit, broader range in the EIC, ect.

2) The study groups individual, corporate, partnership, estate, and gift taxes together. This gives a very misleading view. For example, it's asking you to compare the tax burden of a single mother against that of a Fortune 500 company!

3) The table does not reflect changes that effect taxable income before it even gets to the 1040! One example of this is the loosened rules on Section 125 plans that allow employees to use pre-tax dollars to pay for such items as medical expenses, dependant care, and adoption. Another factor missing from the equation is the effect of the reforms on S-corps, which allow small business owners the ability to greatly reduce their self-employment tax (in some cases by as much as 75%!) and to take advantage of the corporate shield without subjecting themselves to the double taxation of standard C-corps.

and what makes you such an authority on taxes TAXMAN [img]tongue.gif[/img] [img]tongue.gif[/img] [img]tongue.gif[/img]

lol Thanks for the info though, we are having a debate on this in class next week and I was going to ask you for some pointers

[Taxman]

As always, glad to be of service.

[The Finman]

<h2><font color=#003399>2004 Nobel Laureate Wants Bigger Tax Cuts</font></h2>
Edward Prescott, co-winner of the 2004 Nobel Prize for Economics, told CNBC Tuesday President George Bush's tax cuts should have been bigger.

Bush has cut taxes at least once per year -- to the tune of $1.7 trillion -- since he has been in office, cuts Prescott described as "pretty small."

"Tax rates were not cut enough," Prescott said, adding lower tax rates have historically provided a greater incentive to work.

Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.

Reagan's 1986 across-the-board cut, Prescott said, lowered U.S. tax rates while collecting the same revenue. "In the early '90s the economy was depressed by the tax increase in '93 by about 4 percent, and it's right at that level now," Prescott said.


Full Article <font color="red"><u>Here</u></font>

[Dagan81]

Finman, that is very enlightening. Glad you told me that. But the Democrats, in their "infinite wisdom," will still maintain that lower taxes only go to the wealthiest Americans. Truth is, the tax cuts for middle class and low pay wage workers were more helpful as they had more disposible income. The article is fascinating, though.

[Barnyard]

Thanks for the help every one. I'm gonna put something togeather tomorrow morning and e-mail it off to my daughter. I'll report in later. Thanks again!