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Location: Not the edge of the world, but I can see it from here...
Posts: 7,453
Simple enough. Do you think that the tax cuts should be extended? Why or why not? Do you think that this is what is needed for stimulating our economy? Do you have another idea of what would help take our country out of recession? Politics aside, is this the economically smart thing to do?
It IS economically smart to end them now. The government needs the money. If they hadn't been put into place, maybe it would be better now.
ETA: These tax cuts are costing the gov 3.9 TRILLION per year. Can you imagine what could be done with that?
From people who'd like to see it extended - What will happen with that money that makes it worth extending it? i would be curious to hear.
As far as ending the economic crisis - these things don't happen in a year or two, and there is no possible way to fix it in a year or two. i think it will be a full decade from the collapse before things are back in order. No matter who is president.
__________________ Susan (32), dh Tom (47), dd Megan (13), ds Marcus (11), ttc our together baby since early 2009
Now, I don't think it would make a good idea, nor would actually help the economy while people are already pinching pennies and unemployment is high. What needs to happen (IMO) is extend them by a year or so, get the unemployment percent down, and then let them expire. What they're really going to hurt by letting them expire are the little Mom and Pop companies, so theoretically by getting the unemployment rate down first, the blow would be lessened.
What I'm not a fan of is letting them ALL expire, especially not right now. The problem is, the Obama administration hasn't really shown that they're going to hold back on spending at all, so they're basically just going to take the money they're getting from the tax hike and blow it anyway. If we could get the unemployment rate down and curtail hugely gov't spending (which isn't going to happen with Obama in office) and THEN let the tax breaks expire...I think this would be a much better idea.
But the tax breaks haven't shown to be a big help for employment. In fact, they seem to have harmed it:
Quote:
Unemployment under Mr. Bush rose as high as 5.4 percent, not the 4 percent to 5 percent claimed by Mr. Seibert. In the previous eight years, under Mr. Clinton, unemployment averaged 5.2 percent and was at 4 percent for the last half of Mr. Clinton's final year in office-just before the Bush tax cuts. So unemployment rose 1.4 percent after the Bush tax cuts.
One other indisputable fact: At the end of Mr. Bush’s first term, there were nearly one million fewer employed workers than when he began his term, making him the first president since Herbert Hoover to preside over a net job loss. Clearly Mr. Bush’s tax cuts did not jump-start the economy, and they did not benefit the middle and working classes. And this does not include the many workers who lost jobs and took up new ones at greatly reduced pay- Mr. Bush's policies put us into a deep, deep hole.
I recommend that citizens with Internet access make use of the nonpartisan factcheck.org to assess claims made by all parties. As John Adams was fond of saying, facts are "stubborn things."
(While this article is from a plain old letter to the editor, the facts come from factcheck.org, a non-partisan fact site)
So how are we jumpstarting our economy by keeping the tax cuts, if they aren't creating jobs?
ETA: taking out what my cat "helped" me type lol
What does that have to do with tax cuts? Clinton entered office with unemployment in the 6%. It went down in the 90's because of the computer/internet boom where you could basically take a **** on your resume and get a job. Unemployment started to creep up again by 2001 which is coincidentally when Bush got into office, but it has nothing to do with the tax cuts, it has to do with the inevitable down swoop of the internet economic boom. In fact, if you look at the numbers, Bush's highest unemployment rate was still lower than Clinton's even at his worst.
I was never a fan of the tax cuts to begin with so I say let them expire.
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What does that have to do with tax cuts? Clinton entered office with unemployment in the 6%. It went down in the 90's because of the computer/internet boom where you could basically take a **** on your resume and get a job. Unemployment started to creep up again by 2001 which is coincidentally when Bush got into office, but it has nothing to do with the tax cuts, it has to do with the inevitable down swoop of the internet economic boom. In fact, if you look at the numbers, Bush's highest unemployment rate was still lower than Clinton's even at his worst.
aaahhhh...ok. hi courtney sorry i missed that. i'm susan
ok, back to it. What does clinton's unemployment rate have to do with whether or not the BUSH tax cuts helped or hurt the unemployment rate?
in the time that these cuts went into effect until now, the unemployment rate has pretty much doubled. Whether or not there are outside factors, these cuts are obviously not helping us create jobs.
(and actually, i'm sorry, but unless i'm reading something wrong, your own link says you are incorrect. when clinton left the unemployment rate sat around 4, but when bush left it was at 5. As i had brought up before, bush was the first president in many years to preside over a net job loss for america)
__________________ Susan (32), dh Tom (47), dd Megan (13), ds Marcus (11), ttc our together baby since early 2009
Location: Not the edge of the world, but I can see it from here...
Posts: 7,453
Quote:
Originally Posted by glasscandie
Now, I don't think it would make a good idea, nor would actually help the economy while people are already pinching pennies and unemployment is high. What needs to happen (IMO) is extend them by a year or so, get the unemployment percent down, and then let them expire. What they're really going to hurt by letting them expire are the little Mom and Pop companies, so theoretically by getting the unemployment rate down first, the blow would be lessened.
What I'm not a fan of is letting them ALL expire, especially not right now. The problem is, the Obama administration hasn't really shown that they're going to hold back on spending at all, so they're basically just going to take the money they're getting from the tax hike and blow it anyway. If we could get the unemployment rate down and curtail hugely gov't spending (which isn't going to happen with Obama in office) and THEN let the tax breaks expire...I think this would be a much better idea.
I disagree that extending the tax rates will bring unemployment down. The reason being is that American businessess have no obligation or incentive to turn the extra cash into American jobs. Why would they create jobs when demand for products is down due to recession? It doesn't make any sense to create a job for a person when people aren't buying products. Companies are taking their money and holding onto it, investing it overseas, or buying back stocks:
Of course, businesses have the right to do this, but it none of this actually helps the American economy or the joblessness in this country.
As far as spending, to an extent, I agree spending is out of control. However, in order to create jobs, some spending must occur. The question is what do we spend our money on? Our government bleeds money and wastes money on things that are unnecessary and not needed. What we should be spending money on is repairing our roads, bridges, and schools. We should be putting blue collar workers back to work and at the same time improve our country. This excessive spending on defense contracts, bailouts, and whatever pork BS comes down the pipe is what needs to end.
Part of the tax cuts includes the bringing back the death tax (double taxation) and also will reduce the increase that was made to the allowed amount put into Educational Savings Accounts-drastically.
If this was just about a increase in income tax it would be one thing, but this will hit families in many ways.
Location: Not the edge of the world, but I can see it from here...
Posts: 7,453
Quote:
Originally Posted by *SamF*
Part of the tax cuts includes the bringing back the death tax (double taxation) and also will reduce the increase that was made to the allowed amount put into Educational Savings Accounts-drastically.
If this was just about a increase in income tax it would be one thing, but this will hit families in many ways.
The tax cuts should be continued.
The death tax:
Quote:
Under current law, the estate tax was repealed for one year on January 1, 2010. On January 1, 2011 the estate tax is set to return at a rate of 55 percent on all assets above a $1 million exemption amount.
I do think that educational funding should be allowed tax breaks, as well as teachers who supply items for their classrooms. However, I do not think that the entire tax code should remain due to those small tax breaks.
The estate tax is paid by the recipients of an inheritance – most often family heirs – and is due within 9 months of the decedent’s death. If the heirs do not have sufficient cash, personal property and business assets must be sold to pay the tax.
Part of the tax cuts includes the bringing back the death tax (double taxation) and also will reduce the increase that was made to the allowed amount put into Educational Savings Accounts-drastically.
If this was just about a increase in income tax it would be one thing, but this will hit families in many ways.
The tax cuts should be continued.
wait...are we talking about the estate tax? I actually used to work with estates in an investment office. It's really not called a "death tax". You don't get taxed for dying. The people who are receiving money are taxed on it. And when do you ever get to receive money without paying taxes on it? It just doesn't happen.
And actually, as of 2011, there is a credit going into effect so that estate taxes won't be paid unless the inheritance is over 1 million. If you are getting 1 million dollars from anywhere, i feel you should be taxed on it. It makes sense. Other countries do this too, btw.
As far as ESAs. No one is saying you CANT put money into savings for education. This just limits the amounts you can take UNTAXED to put away. And if you pay for education with taxed money, you can claim it and get the taxes back anyway.
I also really feel that the capital gains tax should be re-increased, as will happen when this phases out.
__________________ Susan (32), dh Tom (47), dd Megan (13), ds Marcus (11), ttc our together baby since early 2009
The death tax affects farming families. Say the family (parents and kids) all make their living working on the family farm. They do not have cash assets- they are your typical hard working small family farmers. But the parents die- leaving the farm to the kids- the farm's value is over 1 million dollars (not unusual). The kids may very well have to sell the farm in order to come up with the estate taxes- thus putting them all out of work.
In whole a million is about earning a million dollars a year in income, it's what you own. SO someone who has worked and owns a home and a business who ever inherit that will have to pay 55% to the government. Even though taxes have always been paid. It's a way of the government commandeering private property.
wait...are we talking about the estate tax? I actually used to work with estates in an investment office. It's really not called a "death tax". You don't get taxed for dying. The people who are receiving money are taxed on it. And when do you ever get to receive money without paying taxes on it? It just doesn't happen.
And actually, as of 2011, there is a credit going into effect so that estate taxes won't be paid unless the inheritance is over 1 million. If you are getting 1 million dollars from anywhere, i feel you should be taxed on it. It makes sense. Other countries do this too, btw.
As far as ESAs. No one is saying you CANT put money into savings for education. This just limits the amounts you can take UNTAXED to put away. And if you pay for education with taxed money, you can claim it and get the taxes back anyway.
I also really feel that the capital gains tax should be re-increased, as will happen when this phases out.
First, a million dollar estate is not a lot of money when you consider a house, a car, a lifetime of assets. Second, that money has already been taxed when the person (who is now dead) earned the money. I don't understand why it needs to be taxed a second time. The government already got their 30-40% out of the money the first go around on the income of that person, why do they deserve another 50% of that? Not to mention, much of the estate is in hard goods, not cash, and the family has to come up with cash to pay the taxes or else sell the goods. It is a mess waiting to happen to families who have often just lost the sole breadwinner of the family.
Quote:
Originally Posted by *SamF*
The death tax affects farming families. Say the family (parents and kids) all make their living working on the family farm. They do not have cash assets- they are your typical hard working small family farmers. But the parents die- leaving the farm to the kids- the farm's value is over 1 million dollars (not unusual). The kids may very well have to sell the farm in order to come up with the estate taxes- thus putting them all out of work.
In whole a million is about earning a million dollars a year in income, it's what you own. SO someone who has worked and owns a home and a business who ever inherit that will have to pay 55% to the government. Even though taxes have always been paid. It's a way of the government commandeering private property.
Location: Not the edge of the world, but I can see it from here...
Posts: 7,453
Quote:
Originally Posted by eashley
The estate tax has nothing to do with what the family earns, it has to do with what the value of the estate is at death.
Fair enough, however the percentages of American families that this will affect vs. the amount of income generated by allowing all the tax cuts to expire is completely uneven. Also, the tax cuts on estates can be re-written into law without the other tax breaks that are not helping to stimulate the economy.
Can anyone on the "the taxes should stay" side show me anything that shows how these tax breaks have helped America by way of jobs or economic stimulation?
Can anyone on the "the taxes should stay" side show me anything that shows how these tax breaks have helped America by way of jobs or economic stimulation?
Because I've had more money to spend, I've spent more money. That helps the economy. When I have less money, I will be buying less things.
It's really a simple concept. I have money, I like to spend it, which means people have worked to supply the things I've spent money on. Of course, I've also paid income taxes and sales taxes and property taxes on the money I've earned and things I've spent.
I don't see how that could be a bad thing. And I don't see how giving me less money to spend is a good thing. But I'm selfish like that.
* Productivity declines as the tax rate increases, as people choose to work less. The higher the tax rate, the more time people spend evading taxes and the less time they spend on more productive activity. So the lower the tax rate, the higher the value of all the goods and services produced.
* Government tax revenue does not necessarily increase as the tax rate increases. The government will earn more tax income at 1% rate than at 0%, but they will not earn more at 100% than they will at 10%, due to the disincentives high tax rates cause. Thus there is a peak tax rate where government revenue is highest. The relationship between income tax rates and government revenue can be graphed on something called a Laffer Curve.
I will have around $2000 less to spend with the new tax rate. That's $2000 I won't spend in order to help boost the economy.
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