The Bush Tax Cuts

Discussion in 'Politics' started by OldRegular, Sep 9, 2012.

  1. OldRegular

    OldRegular
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    There have been so many lies from democrats, some on this Forum, about the Republicans, President Bush, and the 2001 Tax Cuts I thought it advisable just to show what they were and who benefited most: The low to middle income wage earner!

    From: http://www.cato.org/publications/commentary/tax-policy-under-president-bush

    Tax cuts for the low to middle income folks by one third to one half! Tax cuts for the filthy rich only 10% or less!
     
  2. InTheLight

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    Sorry, but these two are incorrect.

    First of all, the 15% rate did not become the 10% rate. There was a new 10% rate created and the 15% rate was indexed to it.

    The 28% tax rate went from 28% to 25%.

    Your table should look like this:

    10%
    15%
    28% to 25%
    31% to 28%
    36% to 33%
    39.6% to 35%

    The wealthy DID receive the highest percentage of a tax break, 4.6%. No other group got more than 3%.
     
  3. Salty

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    But that is because they pay the most taxes.

    This little illustration should explain taxes
    [SIZE=+1]The True Story of Taxes [/SIZE]



    Let's put tax cuts in terms everyone can understand. Suppose that every day, 10 men go out for lunch and the bill for all 10 comes to $100.
    If they paid their bill the way we pay our taxes, using the progressive tax formula, the billing would go like this:
    The first four men (the poorest) would pay nothing.
    The fifth would pay $1.
    The sixth would pay $3.
    The seventh would pay $7.
    The eighth would pay $12.
    The ninth would pay $18.
    The tenth man (the richest) would pay $59.
    So, the majority of the men voted democratically to do that.
    The 10 men ate in the diner every day and seemed quite happy
    with the arrangement, until one day the diner owner surprised them.
    "Since you are all good customers," he said,
    "I'm going to reduce the cost of your daily dinner by $20.
    Lunch for 10 now cost just $80.?
    The group still wanted to pay their bill the way we pay our taxes,
    so the first four men were unaffected.
    They would still eat for free.
    But what about the other six men, the paying customers?
    How could they divide the $20 windfall so everyone would get his fair share??
    They realized that $20 divided by six is $3.33.
    But if they subtracted that from everybody's bill,
    then the fifth man and the sixth man would each
    end up being paid to eat. That didn't seem fair.
    So, the owner suggested reducing each man's bill using the US tax formula.
    Then he presented the amounts each should pay.
    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now paid $2 instead of $3 (savings 33%).
    The seventh now pay $5 instead of $7 (savings 28%).
    The eighth now paid $9 instead of $12 (savings 25%).
    The ninth now paid $14 instead of $18 (savings 22%).
    The tenth now paid $49 instead of $59 (savings only 16%).
    Each of the six was better off than before and the
    first four continued to eat for free. But outside the
    diner, the men compared their savings without
    any sense of thanks.
    "I only got a dollar out of the $20," declared the sixth man.
    He pointed enviously to the tenth man,
    "but richie got $10!" "That's right," exclaimed the fifth man.
    "I only got a dollar back. It's unfair that the richest guy got ten times more than I got!"
    "Yeah!" shouted the seventh man.
    "Why should he get $10 back when I got only $2?
    The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison.
    "We did not get anything at all. The US system exploits the poor!"
    Then the nine men surrounded the tenth and beat him up.
    The next day the tenth man didn't show up for lunch,
    so the nine ate without him. But when it came
    time to pay the bill, they discovered something important.
    They didn't have enough money from all of them for even
    half of the bill!
    And that boys and girls, journalists and college
    professors, is how our tax system works. The people
    who pay the highest taxes get the most benefit from
    a tax reduction.
    Tax them too much, attack them for being wealthy
    and they just may not show up anymore.
    In fact, they might start eating in Canada where the atmosphere is friendlier.



     
  4. OldRegular

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    A link showing your info would be helpful. CATO is a reputable outfit.

    I must disagree with your 3%. The tax on my 2002 income taxed at the same rate as my 2000 income would have been 10% more. And that was a modest income.
     
    #4 OldRegular, Sep 9, 2012
    Last edited by a moderator: Sep 9, 2012
  5. OldRegular

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    The table I posted was incorrect. I reduced 6 rates to 5. However, the reduction in my taxes as noted in an earlier post was about 10%. There is one caveat I would add to your response [noted below] which explains the 10% reduction in my taxes and that of others with similar income.

    Link: http://www.cbpp.org/cms/index.cfm?fa=view&id=2705
     
  6. saturneptune

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    Here is another angle to look at this. It takes a special person to start a business of their own. It takes a person with vision, leadership, ideals, thick skin, and most of all, a person that is willing to take a risk with persistance. Now, that excludes most people. Most people go to work for a small business or a larger corporation.

    Now, if you go to work for another person, you are banking your income on someone who was willing to take the risk. They create the wealth, they create the jobs, including yours. Since less taxes mean more chance of success of that business, why would anyone favor taxing the hand that feeds you. In fact, I will go farther. Since a person who is an employee was not willing to take the risk of a business, that person really has no right to complain about low tax rates on businesses.

    If one wants to take advantage of the lower rates, then assume the risk and start your own business.
     
  7. Arbo

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    Absolutely :thumbsup:.
     
  8. Revmitchell

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    That's right. :thumbs:
     
  9. InTheLight

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  10. InTheLight

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    If you use this argument you have to remember that the Bush tax cuts affected tax rates on W-2 wage income. Business owners that hire outside help typically do not use their personal money (from wages) to fuel hiring. Rather they use earnings from their business to do this. Thus, to argue that by giving a business owner a tax break on their W-2 income will create jobs isn't very accurate. In fact, there are less than 5% of business owners with incomes over $250,000 that would even be relevant to this discussion.
     
  11. OldRegular

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    Below is a comparison of the tax tables before and after the Bush Tax Cuts. I show the Federal Income taxes for taxable incomes of $25,000 and $50,000. which should be typical of low to middle income folks.

    ***************************************************************
    Reference:http://www.unclefed.com/IRS-Forms/2000/i1040tt.pdf
    This is the Tax Table for 2000!

    Income of $50,000 to $ 50,050

    Single, Income tax is $10,595
    Married filing jointly tax is $8,307
    Married filing separately tax is $11,157
    Head of a household tax is $9,438 ​

    Income of $25,000 to $ 25,050

    Single, Income tax is $3,754
    Married filing jointly tax is $3,754
    Married filing separately tax is $4,157
    Head of a household tax is $3,754​

    **************************************************************
    Reference: http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
    This is the 2011 Tax table.


    Income of $50,000 to $ 50,050

    Single, Income tax is $8,631
    Married filing jointly tax is $6,654
    Married filing separately tax is $8,631
    Head of a household tax is $7,274 ​

    Income of $25,000 to $ 25,050

    Single, Income tax is $3,329
    Married filing jointly tax is $2,904
    Married filing separately tax is $3,329
    Head of a household tax is $3,146​

    ***************************************************************
    The Tax Cut for married filing jointly with a $50,000 taxable income is
    {[$8,307-$6,654]/$8,307}x100=20%

    ******************************************************************
    The Tax Cut for married filing jointly with a $25,000 taxable income is
    {[$3,754-$2,904]/$3,754}x100=22.6%

    ********************************************************************
    *****************************************************************
    The 2003 Tax Tables show a slightly higher tax than the 2011 Tax Tables??????? But there is still a significant cut for low to low middle income folks. Anyone want to calculate be my guest. The info is there!

    http://www.unclefed.com/IRS-Forms/taxtables/2003_i1040tt.pdf
     

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