Taxes good! AH!!!!! TAXES BAD!!!!!!!!

[Eiru]

http://www.buzzflash.com/interviews/04/03/int04016.html

[Eiru]

My own personal outrage quote:

BuzzFlash: And you mentioned one of the vehicles that undercuts the notion that the middle class -- let's say the person earning $50,000 or $60,000 -- is getting tax relief is the alternative minimum tax. Can you explain that? Because I think a lot of people don't really know what that is, or how it's affecting them.

David Cay Johnston: I often call it the stealth tax, because it sneaks up on you. In 1969, it was revealed by the Johnson administration, three days before it ended, that 155 Americans who made the equivalent of a million dollars a year or more in today's dollars paid no income taxes. Remember, the U.S. government taxes you on your worldwide income to Americans. So nowhere in the world did the 155 people pay taxes. Congress got more letters about that that year than they did about the Vietnam War. It really struck home with people. So Congress passed a law that was designed to make sure that if you made the equivalent of a million dollars or more, you have to pay some taxes, because most people that make that pay a lot of tax.

Well, over the years, the laws morphed and were changed by Congress. And it largely ceased to be a tax on people who make more than a million dollars a year. But under the Bush tax cut, it will become a huge government moneymaker from the middle class and the upper middle class. Since 1986, under this law, if you take a lot of deductions, you lose your exemption for yourself and your spouse, and your children. You cannot deduct your state income taxes. You cannot deduct your property taxes on your home. If you or your spouse or one of your children is sick, and you're trying to keep them alive -- let's say they have cancer, and you're spending 10 percent of your income or more on your medical bills -- our government will tax you for trying to keep your loved one alive. You can even lose the standard deduction -- the most passive thing you can do as a taxpayer. You don't itemize; you just take the standard deduction. If you're a married couple with three children who made $75,000 last year, you lost part of your standard deduction to the alternative minimum tax or stealth tax.

Now under the Bush tax cut, by the standards of President Bush, there is a one-half trillion dollar increase in alternative minimum taxes. And that money is explicitly being used to finance the reduction in taxes for people at the very top who make millions of dollars. You can go back into the government documents and see this. It was even discussed at the time in the general news media that Congress would only approve a $1.3 trillion dollar tax cut. The President wanted $1.6 billion. It was probably as a number of critics have argued really a $2 trillion dollar tax cut -- but how do you stuff more than $1.3 trillion into a $1.3 trillion dollar bag? Well, the way you do it is the alternative minimum tax takes away the Bush tax cuts for millions and tens of millions of people in the middle class and the upper middle class, and that allows you to maintain the full Bush tax cuts for people at the very top.

If you are married and have children, you are 30 times more likely to pay this tax than if you're single. So much for, "We're here to help the American family." If you make $75 to $100,000, and have two or more children, there's a 97 percent chance you are going to lose part of your Bush tax cut to this tax. And, overall, 42 percent of the tax cuts for people in that income group will be lost because of this stealth tax. By the way, the only way you know if you pay it is you look on your tax return on line 43.

[Eiru]

More outrage for me:

The facts are that we're down 9 million jobs. You keep hearing in the news media we're down 3 million. You have about 3 million fewer jobs than we had in 2001. But during that period of time, normally we would have created about 6 million jobs. So we're really down 9 million jobs in America. And the reason we have low unemployment is lots of people have quit looking for work. Now this trend, though, did not start with the Bush administration. It started with the Democrats. The Bush administration has simply run with it. And that's the ball on that thought. It is important, and the news media has not made this clear to Americans. I don't think most Americans, from my talking around the country -- and in the first two months of this year I made 31 flight segments this year around the country, talking to people -- most Americans do not understand that it is the stated policy of the Bush Administration to eliminate all taxes on capital. Now we can decide to eliminate all taxes on capital. The Constitution allows that, and if Americans want to stop all taxes on capital, then we should do that. But the news media has not explained to people both that that's the policy and what it would mean. Fundamentally what it means is if you don't tax capital, there's only one other thing to tax: labor.

[Allison]

I wish I had something intelligent to say, but I don't. My economic education is lacking (shush ... I'm working on it), so I don't feel qualified to comment.

[Jammer]

The facts are that we're down 9 million jobs. You keep hearing in the news media we're down 3 million. You have about 3 million fewer jobs than we had in 2001. But during that period of time, normally we would have created about 6 million jobs. So we're really down 9 million jobs in America.

I haven't had time to read the whole thing, but this part had me cracking up. That's like me being at the roulette table and losing $300.00, then having my wife say "I can't believe you lost that $900.00." Finally, when I stare at here with my best "WTF" look, she explains that normally I should be winning $600 at roulette so I'm really down $900.00.

Again, I haven't read the entire bit yet, so I have no idea where these folks are coming from, but that just begged for a response.

Also, I think there's a lot of smoke and mirrors in their explanation of the AMT. The only time the AMT has come into play for me is when I've had an unusually high income year coupled with the ability to claim unusually high deductions. I hate paying taxes and would jump at the opportunity to not only do away with the AMT, but go with some kind of simple flat tax. But to claim that the AMT is a crazy scheme to prevent poor people from paying for cancer treatment (yeah, I know I'm cherry picking parts that make me sound clever), seems like a stretch.

Jammer

[Rooster]

Yeah, the whole job loss thing is a bunch of BS. Yeah, I lost my job, but I got one. I didn't even have to retrain.

The problem is, people don't want to move, they don't want to retrain, they don't want to do menial work. But it's Bush's fault there's big job loss.

MOVE TO WHERE THE JOBS ARE. If you don't want to: don't bitch.

[Allison]

Lol, Rooster. I'm no economist, but I'm pretty sure it's a tad more complicated than that.

That reminds me of a bit the late Sam Kinison used to do about starvation in Africa: "Here's a little tip for ya .... MOVE TO WHERE THE FOOD IS! "

[Tammarion]

3rd day here in taiwan, and I've already gotten to talk to some peeps about getting employment here.

Bad news though - haven't seen a single copy of DaoC, and the number of adverts around for BoobyAge... I mean Lineage II is scary.

I do think there should be a government program for moving peeps to places where jobs are.

As far as the tax rant goes. Shouldn't the blame lay with congress for changing a tax on non-taxpaying millionaires?

[Nymf]

I love my 33% tax, i get healthcare and dental & other stuff with it.
Im not to fond of the extra 25% VAT on all things i buy, but hey.. i get to give that money to some poor unemployment dude in welfare.
I hate the 150% tax on gas and other "Luxuary goods", but hey.. i get to walk to work and get exercise and save the enviroment.

Tax/VAT/Tax on Tax i pay / year is aprox 75% of my income ( if im working )
Everytime i calculate stuff like this i go to current boss and shout /gc quit and go home and play daoc and collecting welfare check instead.

Too HIGH TAX = BAD
TAX = GOOD

[Swifty_Johnson]

Actually income tax = bad.

It's funny how people twist things to prove a point that really doesn't exist.

It's either the top 10% or 20% of the wealthiest U.S. taxpayers pay 80% of the income tax collected by the U.S. goverment. It that fair? I love to see Kerry going around and saying "I'm going to tax the rich!" and instead he'll just end up screwing the middle class again.

The democrats had this great tax the rich plan in 1990. You see, they put a tax on every "luxury" item over $30,000. What did the rich do? They stopped buying luxury items in the United States. Car,boar and private plane sales plummetted. The middle class people who made these items lost their jobs, the middle class people that supplied the materials for these times last their jobs, and the country went into a recession. The end result, the rich didn't pay any more in taxes, and the middle class got unemployed.

So, what happens when you tax the rich? They put thier money in safe havens where it cannot be taxed. Places like Grand Caymen Islands and Sealand exist only to provide tax free havens for the rich to hid their money from goverment taxes. So lets say Kerry get elected and taxes the rich. You will see an outflowing of money from the U.S. to offshore tax shelters and all of a sudden the tax burden will shift more to the middle class, as the rich now have a majority of their money offshore.

The goverment should get rid of personal income taxes, move to a natinal sales tax and you'll see the economy just like never before.

Swifty

[Hammer]

As Jammer pointed out, it takes some unusual circumstances. Your talking about people who make a pretty good income who happen to have enough in deductions that they would pay zero tax. AMT makes sure they pay something. It's hardly an evil plot to tax people with cancer. It's a problem with an overly complicated tax code and the law of unintended consequences(sp?).

The jobs thing is blown out of proportion as well. No question the market took a big hit after the Dot.Com bust and 9/11. But all indications are that the economy is and has been heading back in the right direction. The job numbers you are talking about are a lagging indicater. How many people do you know that have lost their job and haven't found a new one? If you do, were they honestly motivated to find work or were they like my cousin, who decided he would wait until all the freebies ran out?

[Eiru]

My outrage with the second quote had very little to do with the job loss althought that plays a part. My outrage had to do with this quote:

.... it is the stated policy of the Bush Administration to eliminate all taxes on capital. Now we can decide to eliminate all taxes on capital. The Constitution allows that, and if Americans want to stop all taxes on capital, then we should do that. But the news media has not explained to people both that that's the policy and what it would mean. Fundamentally what it means is if you don't tax capital, there's only one other thing to tax: labor.

Which means that the superwealthy get to pay even LESS tax whereas we all (or a sizable majority of people posting on this forum) pay more. Job loss comes into play when we find that those people NOT working add to the tax burden of those of us who do.

[Hammer]

I think a lot of us in this forum will be counting on 401k's for our retirement income. I would love to see the taxes on that reduced or eliminated. I'm not even close to rich.

[Jammer]

But, Eiru, being the smart guy you are, I would think you could easily see that the quote that has you so outraged is a logical fallacy. The statement you quoted is a classic false dilemma. According to this guy, there are only two options, tax capital or tax labor. This dilemma is false, because I can quickly list several other options:

1. Tax boobies (could be considered capital :))
2. Sales Tax
3. Flat tax based on local cost of living index
4. National food tax

I'm not taking a stand on the relative merits of a policy to eliminate all tax on capital. I'm just saying that I believe it a waste of emotion to get very worked up over what any pundit says...especially one who resorts to logical fallacies to make a case. One who does that should immediately be under suspicion.

Jammer

[Eiru]

Correct me if I'm wrong (and I might be; I was a language major after all), but don't sales and national food tax tax our overly taxed income just the same? And even though it is someone promoting a certain point of view, the author also points out limitations in flat tax proposals. In particular, he points out the limitations in Forbes' flat tax proposal. Also, I'm not too pleased by his historical note that democracy only flourished in Athens when taxes were changed from a flat tax to a graded scale of payment.

The major outrage I felt while reading the interview, and I hope this is reflected in the quotes I pulled, is that the very very few ultra-rich - ie. those with the most money - have skewed the tax system to place the burden of taxes on those of us not in that lucky position. I, personally, gotta say "Those with the gold, make the rules" doesn't fly for me. I'm damn angry that we don't pay more attention to this.

And I personally think boobies should be free for all, but I'm all about NAFBA and I know that isn't universally popular. ;)

[Jammer]

You're probably, right, Eiru. I'm certainly not qualified to represent the entire country with regard to crafting the ultimately fair tax system. I just wanted to illustrate, in a less than rigorous fashion, that there are more options than the two presented by the guy in the article. Anytime someone sets up a false dilemma and then tends to cast blame based on said fallacy, I get suspicious.

We could always go Viking on the world and just steal what we need to replace our taxes. Then we could all get off easy!! ;)

Jammer