How's Your Stimulus?

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I just got my first check (well I got it Friday, I didn't open it until today) that included the tax break given by Obama's stimulus package. My check increased by exactly $30.01. That's not a huge increase, but hey, 30 bucks is 30 bucks.

Two somewhat ancillary points:

1. I find it somewhat amusing that people are critical of Obama's handling of the economy, and are planning "tea parties" for tax day tomorrow. As I understand it, the Boston Tea Party back in the colonists day was due to A) an exorbitant tax on tea and B) the lack of representation of the colonists in the English Parliament. Now, as far as I'm aware, no one has seen a tax increase during Obama's administration, although if you were making over $250K, you didn't get a tax break either. I also do not think anyone is being denied representation in Congress. What is the point of these protests?

2. While I don't mind the extra $30, I also hear that we are drowning in debt. It seems like if most Americans are paying a little less in taxes, isn't that pushing us even more in debt? Wouldn't it be better if we would forego the tax break for all but the worst off? I have neighbors that we invite over for dinner a couple days per week, because it has got to the point that they are having difficulty buying groceries. For those people, the extra $30 may make a big difference, but for most people I think it doesn't.

 

We Bostonians like throwing tea into bays - do you have a problem with that?!

Oh, and I am very stimulated, if you must know, just not by Obama (don't make enough to even pay taxes )

 

That's true - I'm married, so I looked at the married portion of the stimulus. I imagine if you're single, it's half of that.

 

I seem to remember something about 200K being the limit for private individuals. Did I get it wrong?

 

I think Aldeth has a good point, a tax break really doesn't seem that logical at a time like this. I suppose that it makes the average person happy (or at least they think so), since when the average person hears 'tax break' it is a good thing no matter what.

That pretty much sums up how I feel about the matter, though it may be a little hollow from me considering I didn't make enough to pay taxes. That being said, if Uncle Sam wanted to take some of my money I wouldn't complain too much as I would still have enough to live and go to school.

 

I'm a little late to thread but here goes.

There has been a lot of talk about the tea parties and pretty much all of it is wrong. Some people have been claiming it is a bunch of right wing whackjobs, or an attempt to revitalize the republican party. Others have been saying they are direct attacks against the Obama administration. If you were lucky enough to attend one or to get your news from sources other then CNN you would have seen that they were peaceful protests about our government passing spending bills which may bankrupt the nation and at the very least will take generations to pay off. The teaparties were probably more critical of Republicans then they were of Democrats as many expect Republicans to be fiscally conservative. There was also a tremendous amount of anger at these bills which were many hundreds of pages (if not thousands) passing so quickly that it was obvious the majority of the people who voted for them had not read them. That was the "representation" part of the protest. If our reps and senators are voting on things that we haven't had a chance to read (anybody remember Obama's five day pledge?) and they obviously haven't read, then who is running things? I personally find it reprehensible that these protests have been mocked and even inappropriate sexual jokes about "teabagging" have been made. The coverage of the tea parties seems to be wildly different then the coverage of Cindy Sheehan and her "Code Pink" cronies who had problems with the Iraq war. Then again that may just be my bias.

This drives me crazy. I understand the altruistic urges that people with resources should help people without (although if you looked at Joe Biden's 2008 tax return you may not believe that), however the tax disparity is starting to get crazy. The latest numbers that I found are from 2006. The top 50% of tax returns filed paid 97.01% of the tax. That means the bottom 50% paid 2.99%. You have to remember that this is of people who filed returns. There are plenty of people who do not meet the filing threshold to even file a return. My point is that the worst off do not pay income taxes as it is. How can you give a tax break to people who don't pay taxes?

 

I'll take your word for the tax breakdown structure Snook. I admit that I'm not too knowledgable about these things. I know what I pay in taxes per year, and I imagine people around my income level probably pay about that much too, but I cannot claim to have any knowledge about what people pay who earn signficantly more or significantly less than I do.

One thing I continue to think would be a good idea is a millionaire tax. To me it seems absurd that for the 2008 tax year, everyone pays the same percentage of tax on income earner over $300 something thousand dollars. (I forget the exact number but it was between $300K and $400K.) Why is that the top tax bracket? Why shouldn't we have a tax rate higher for the really high salaries. If Obama's eventual plan goes through, he will increase the tax rate on people who earn over $250K to 39.6% (so let's round that up to 40% for convenience). I would propose additional tax layers, like 45% if you make over $500K, and 50% if you make over $1 million.

 

The problem with doing taxes like that is that it makes it less worthwhile for people to earn additional money. It is small business that drives the economy. Let's say we follow your logic upward and at some point we get to a 75% marginal rate. If an employer has the option to higher someone to increase his profits, but 75% of it is going to the government the employer may just decide it isn't worth it. I actually think it might be a more worthwhile experiment to at some point make the tax rate 0%. Then if the employer gets up to that point he has a huge incentive to keep the party going.

You may have heard the phrase "Going Galt". It is a phrase used for people who in high taxation eras figure out how much they need to survive on and then figure out how to minimize their income and therefore income taxes to maintain it. Obviously, this is not good for the economy as it retards growth.

 

Well, I never said 75% - I don't think there's a need to go that high. It just seems strange that the small business owner pays as much (as a percentage) as the CEO.

Although I beleive historically, we have had tax rates even higher than that on the top income earners. The 1950s had some of the highest tax rates in our nation's history (to pay for the costs of WWII and the rebuilding of Europe and Japan) and yet that was also a very prosperous time for America.

 

Nobody expects that any longer from Republicans. Where have you been the last 8 years, TGS? Also, the Republicans and their "news" channel, FOX, were more than in attendence. Even our own gov tried to get in on the political action:

This may come as a surprise, but poor people don't have any money, TGS. Hence the reason they are "poor." On the one hand you argue that taxes are too high, especially for those who can more than afford it; on the other, you complain that poor people should pay more taxes. So since fairness is not the issue, and paying taxes is not the isssue, it must be that there is resentment against the poor - for being poor.

This comment is not as over-the-top as it appears at first glance. Because who gets the blame for federal spending? Why the poor of course. Even with the huge bailout packages for the banks and Wall Street, the real "welfare state," the "protesters" are "protesting" the tax increases on the top 5 percent - the wealthiest Americans - the ones who benefited the most from the bailouts. Who will benefit the most from the Obama stimulus package? The poor? Hardly. It will be the business owners with nice government contracts. The same business owners that Joe the Plumber was crying over during the last campaign.

The facts of the last 8 years speak for themselves: the Republican conservative movement has nothing to do with "less" government, nothing to do with "less" taxes for "most" Americans; it has nothing to do with "less" government intervention in people's lives. But it is instead about an aganda: more welfare for the rich, more government crack-down on those who don't agree policially, more wars, in which the rich prosper and the poor and lower middle classes go off to fight and die in, and less taxes for those who make the most income and benefit the most from government. And most of all, it shreds the Constitution at its own convenience and holds it up high when the Constitution suits its own agenda.

When Thomas Jefferson argued against George Washington and Alexander Hamilton crafting the first national bank and the federal government assuming the national debt from the states, he commented: "Show me in the Constitution where it gives the federal government the right to do these things." Jefferson was not wrong to ask that.

Was Jefferson constitutionally right? In my opinion, Jefferson was right. But was he realistic? Hamilton was more of a realist, and for anyone who has studied Hamilton and Jefferson, that comes as no surprise. The truth of the matter is that the Founders provided us with a framework in which we can hash these matters out, and eventually work through them towards a workable, political solution.

The so-called "Tea Party" protests were nothing more than a temper tantrum by the hard right, conservative movement, which at the moment is floundering. The fact is that the radical right is being politically marginalized; their ideas on govenment have been soundly rejected by the majority of Americans. So they want to "secede" because they can't get their way? Good riddance, and don't let the door hit their fat butts on the way out.

http://www.msnbc.msn.com/id/30227452/

http://wiki.answers.com/Q/FAQ/2484-135

 

Yeah, but wasn't the government already in deep, deep debt that was going to take generations to pay off? And a lot of that debt was courtesy of the previous administrations -- it didn't appear overnight or even during one administration. Perhaps Obama's policies are going to increase the debt significantly, but he's reacting to a pretty horrid situation -- one that IMHO could have been avoided if the federal government had been more vigilant on the regulatory end of things. he's doing the best that can be done in a really ugly situation.

Perhaps where the money is going is what concerns the tea party folks. I can totally understand how an average Joe Blow of either political affiliation would resent the huge bailouts being given to fat cats with the jobless rate still rising*. I'd have a tea party over that myself, if I weren't busy making sure that I keep my own job!

*that is an assumption, mind you -- is it still rising or has it levelled off?

 

Actually chandos, a LOT do expect that, why do you think so many got voted out?
You can't claim it was just dem's getting more new voters, it was also a lot of rep's losing faith in those they had voted in.

You mean the same business owners(probably 90% of whom make over $250K/year) are gonna have to pay at least an additional $636 BILLION over the next 10 years?
Yeah boy, thats some good tax cuts . NOT
New Taxes

So let me get this straight, because the republican party strayed(far, far) away from its roots, the dem's want to go just that far in the other direction?
Tilting 30 Degrees starboard isn't just as bad as tilting 30 Degress port?
Pot meet Kettle, shake hands & go to neutral corners.

Can't disagree with your base premise, unfortunately both parties right now don't seem interested in " hashing these matters out, and eventually work through them towards a workable, political solution."
Rep's don't want to work with Dem's & Dem's don't want to work with Rep's.
It's like the catholics & protestants in N ireland for so many years, they didn't want to help themselves as much as inflict injury on the other guy.

If you had looked at videos of more of the parties, most(probably 75%) of them were not about anything more than being saddled with close to Twice as much debt at the end of obama's 4 year term as we as a country have accrued in the past 225 years.
That is an astonishing amount of debt to accue in so short of an amount of time(& yes the bush admi . . . . . , actually the prior 3 admins have increased the national debt a LOT but nowhere near this magnitude).

 

Aldeth - you still get paid by cheque? A piece of paper you have to deposit at the bank?

 

No - I know I said check, but I meant direct deposit slip. It's just a lot easier to type check. I probably haven't received a paper check from an employer since I was in high school.

I'd love to see the source on that. Our current debt is about $11 trillion. If what you say is true, that means Obama is going to increase the debt by another $22 trillion over four years. Since his proposed budget for FY10 has a bit more than $1.2 trillion in deficit spending, it appears (if he keeps this level of spending up and doesn't cut back as he proposes to) that he will come in at less than 1/4 of your estimate. So really martaug, where is that number coming from? Your estimate is about 4.5 times higher than what the numbers look like. You know, if you increase my salary by a factor of 4, I'd be earning in the top 5% of all wage earners. (Incidently, Bush actually DID more than double the deficit in the 8 years he was in office. It went from about $5 trillion when he took office to $11 trillion when he left office.)

You really think the vast majority of small business owners make over $250K? You do realize you're taxed on your profit, not your revenue right? If your small business has $1 million in revenue, but you have $900K in expenses, you have $100K in taxable income - not $1 million.

 

The answer to this is yes (at least my clients do). Even in retail businesses most small business owners make more then you would suspect. In most cases that is the reason they own their own business. If they were only going to make 40K they would just get a job someplace and not have the risk.

 

I can't help but think this is an incredibly personal question -- but you could ask Mrs Bruno if you really wanted to know.

 

This is apropos of what exactly? I'm not sure what this refers to.

Well that is excellent news indeed! If most small business owners actually do earn over $250K, then I see no problem with placing additional taxes on them. If they were just squeaking by like the rest of us, I'd have some sympathy for them, but anyone making over $250K should be able to live pretty comfortably.

 

...just an attempt at comedy that failed miserably....

 

Ok, here you go aldeth.

Aldeth, do you honestly believe that te business owners who are having to pay $X of extra taxes aren't going to pass it along to the consumers?