New Tax Breaks for the Rich Here in the USA

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Laches - Yes, my definition of the rich did change in the thread, because no one really commented (you included) on the particular link that I posted. I am being serious, but was this a bad link? cause I am able to access it. The question I was hoping to raise was this: How do other classes of society pay, when the government provides welfare for the upper class in the way of huge, expensive SUVs?

The impact is of course not only the cost to the taxpayer. but also the impact on energy cost/environment. As is noted in the link, these SUVs are large polluters.

You in particular, since you are concerned with my defintion of the rich, may want to address an issue with a stand of your own. In particular what impact such tax breaks have on the rest of society, since most can't afford a 70,000.00 vehicle in the first place.

Edit: As far as the rich not showing up for dinner: I say good riddance. Take your lobbies, tax accountants, lawyers, crooked politcians with you when you leave.

[ May 26, 2003, 19:03: Message edited by: Chandos the Red ]

 

1) Not sure how commenting on SUV's or not forces you to change your definition of 'rich'

2)Only 2 vehicles on the list at the link are 70,000 + (click on the fact files) which is the number you talk about in your post above. A lot (most) range between 22k-50k. These type of vehicles then are hardly only owned by the 'rich' as you define them as the Ken Lay types of the world. If the tax break was on, say, Rolls Royces then I'd see your point but it isn't, it is on some of the most popular vehicles on the road owned by lots of people from lots of economic backgrounds -- it is peculiar to try to cast this as a rich vs. poor issue imo.

3) The issue of whether SUV's should receive a tax break due to pollution is entirely unrelated to rich vs. poor imo. Again, lots of people not fitting your definition of rich (the last def'n anyways) own SUVs. IMO, we should tax gasoline to account for externalities such as pollution or the cost of going to war in the middle east etc. This would create an economic incentive to get better gas mileage. This should be coupled with lots of other things imo like increased standards (the last increase was in the 70's and fuel efficiency has actually decreased since then.) That would provide an economic incentive from the consumer side creating demand while increasing standards spurring technological development.

That said, it isn't a rich vs poor issue. Most people who own these vehicles aren't rich. Heck, the article begins in big bold that it has been used to benefit "small businesses" which aren't run by the Ken Lays or Warren Buffetts of the world.

 

Again, Laches if you read my post carefuly, you will notice that I say "the rich I usually rant about." I was careful to quailfy this type of rich from the well-off in my original topic. I would suggest that you go back in reread that post.

BTW, your argument is not very good because the poor typically don't drive SUVs. Unless, you define middle lower class as "poor." Maybe it's you who needs to define your terms a little clearer. I'm not sure what you mean by the "poor," since they are driving SUVs that a lot of others can't afford.

As to the cost of the SUVs, I'm not sure of your rant that there was only a couple that meets that price of 70,000.00. Did I have to list them all for you? Ah, it would be only the fairly well-off who would be able to buy them at that price, correct? That was te point of listing those models at 70,000.00.

In Houston we have new inspections because of the poor air quality of our area. Sorry that you are not familiar with it. When you take your vehicle in for inspection you now must pass very strict air emissions standards. The higher cost will impact the poor much greater. Because many of them own older cars that need to be able to pass these standards. The cost can be as much as 700.00 - 800.00 to replace a converter. Not only that but the inspection itself is now very costly. This new emissiosn standard was ordered by the EPA.

Anyway, I am glad you are responding to the topic at hand. We still have not touched on the energy/cost part of the problem of this kind of tax welfare for the well-off. But I will.

Edit: By the way, I never once mentioned the poor directly -- you did. Again, go back and read my posts.

 

I'm not sure what to make of this abrasiveness.

The tax break covers things like astro vans, econo vans and wagons, dodge vans etc all in the 20 k range. So, to try to cast the issue as a tax break for the rich because two vehicles on the list cost more than 70k and ignoring that most of the vehicles affected will be family vans and pickups that are far more prevalent on the road is misleading. It may be a stupid tax break, but a "tax break for the rich" it is not and characterizing it as such only galvanizes the issue.

I'm not sure what to make of you barb of "sorry that you are not familiar with it." I think it is a rather tangential topic. I take it that you're upset with these 'tax breaks for the rich' because they drive the gas guzzling SUV's and the poor have to comply with new resulting standards which disproportionately weigh on them? Well, for the record, I am familiar with the CAA (and most of the other US environmental regulation) having worked in this area briefly in the past on an interim basis with the EPA and Army Corp of Engineers (who deals with the CWA). The EPA would've ordered what it did only after your area's continual failure to comply with their duty under the CAA to meet certain Air Quality Standards. This is drifting, but the CAA is set up differently than the CWA and the CAA relies on the local government to come up with plans to comply with the standards mandated in the CAA. Only after failing to come up with and implement the plan (for many, many years)did the feds through the EPA step in. I for one applaud the EPA.

The point of all that is this: Houston was out of compliance before the tax break and was out of compliance since the 1970's. To draw a link between the tax break and your non-compliance is incorrect in my opinion because you weren't in compliance long before SUV's came around (though any vehicle with poor mileage may exacerbate the problem but mpg for all cars has dropped since the 70's with a couple notable exceptions for certain makes and models).

Is pollution a problem? Yes. Should we seek to address the pollution caused by vehicles? IMO, yes.

Is this a "tax break for the rich?" No. Are the rich and their gas guzzling vehicles the cause of our pollution? No, highly oversimplified.

As far as definitions: middle class (who owns most of the SUV's) should be defined as 2X to 10X the poverty line which varies based upon size of the family and the year. From that you can see my definitions. My definition varies from some in that the top end of my middle class is higher than some others who stop as low as 6X poverty level while some people extend the class higher than 10X.

That's my definition and I'm sticking to it.

 

First, Laches, it is not my intention to be "abrasive." I just don't understand why you keep misrepresenting my views. And that was not a "barb" about the emission standards here in Houston. A lot of people in the country are unaware of our situation here. I have no idea why you are getting defensive here.

Second, it is my belief that this is a tax loop hole for the rich, not the kind of rich that has a lot of political muscle, (what do they care about a few extra thousand to write-off on an SUV), but the "rich" that would earn a heftier tax cut than most of the population in the US. Note that the article says that now accountants are now recommending that some "doctors and laywers" now buy these kinds of vehicles. Can you now make the connection?

Also, like me, you must care about the environment. Now, those who would not want to buy one of these higher polluting, higher energy using vehicles in the first place, may do so because their accountants advise them. Please, read the entire piece. Thus, adding more pollution to the Houston area's already bad situation. An extra, 700 - or 800 dollars can make a large difference to someone who only make 10.00 an hour and lives by him/herself. Believe me, I know people who fall into this situation.

Thirdly: why should someone who cannot afford a 20k vehicle pay for someone who can? Also, for someone who cares about fuel standards and pollution standards and may not want to buy an SUV, now pay for someone else to do so? I have a Honda, so why should I now pay for my neighbor to write off his SUV.

Fourth:Notice that the SUVs, must weigh a huge 6000 lbs with a load. 6000 lbs! Lt me ask you this: how much of a strain does more 6000lbs add to the streets and highways? How many Astro Vans weigh 6000 lbs?

This is a bad deal no matter how you cut it. Despite your taking into account the cheapest of the cheap on the list,a lot of these also fall into the 40,000 and 50,000 dollar range, that puts quite a few of these out of reach for a largenumber of Americans. I can't afford to spend 50,000 dollars for a Toyota whatever. Why, should I, or any other American taxpayer pay for those who can, Laches?

 

Once again I think some of you are blinded by hatred of "the rich".

Chandos, I did take time to read the article you posted. It was, as unfortunately many news articles are, completely one sided and biased. Even the title is misleading "Congress widens tax break on SUVs". The tax break was not on SUV, but on vehicles meeting a certin weight requirement. Many SUV's happened to fall into the same catagory that trucks and also mini-vans fall into. The article mentioned several of the cons of the tax cut, without a mention on the overwealming pros. This is NOT a tax cut for the rich. It is a tax cut intended to help thousands of corporations and small businesses.

IF you haven't read it yet, I would reccomend that you go out and pick up a copy of the book BIAS, by Bernard Goldberg. It's facinating, and this article could have been taken right from his book.

As far as your question on how many astro-vans weigh 6,000 pounds have a look here:

http://aolsvc.carguides.aol.com/cars/overview_detailed.jsp?Id=1009362

You can see the unloaded van has a weight of nearly 4,600lbs. Fully loaded it easially falls into the catagory.

I do, however, thank you for this post. I am wondering why MY accountant hasn't mentioned this new tax cut for me. I own my own corporation. And I, like thousands of others, intend to benifit from this tax break by buying an SUV in the near future. I need one for my work, and am excited.

 

Man, Ilandon, that is one huge van. It seats 8 people. Now I weigh 150lbs, so 8 of me is 1200lbs. 4500 and 1200, that is 5700 lbs, bear with me - (good thing I was an English major) That is close to the 6000 lbs. I guess it could weigh that amount. But it is going pretty much at the max of credibilty.

Anyone who knows me, knows that I don't hate anyone. I dislike the wealthy who subvert our political system that is true. But hate is too strong a word, Llandon. I guess I hate what they represent.

I am familiar with this book. He is a conservative who believes that the media has a liberal bias. I've seen him on TV. I don't disagree with his view: there is bias in all media. Fox and the New York Post are highly biased towards the conservative point of view; Pacifica Radio is highly biased the other way.
The bottom line is that everyone in the media has an agenda. There is no getting around that.

You seem like a nice guy, so I won't complain about having to help pay for your SUV.

[ May 28, 2003, 05:27: Message edited by: Chandos the Red ]

 

Yes, they are. Unfortunately.

At Darkwolf:

Sidenote joke: Banking consists of lending an umbrella to someone, while the sunshines and taking away that umbrella as soon it starts to rain.

In this case, the banking in you're country seem to react differently to recesion than in mine. They rethink every credit 6 fold, contrary to the usual 4 fold.

Low Dollar is bad for you. Bad for you.

No really, it would break the goold old tradition of the trade-deficit and the export industry is not a big sector in your economy. So, the traditional domestics are hurting because imports are too expensive and the tourism industry... well, not too many tourists right now, I've heard. Some frictions with the whole wide world ?

To money going abroad. I declare stalemate. I still think there's money coming from somewhere, driving my own currency into hurting heighs.

I'm not in your country, so mantras of your parties are... foreign to me. I don't think only goverment can spend money wisely. That's besides the point. Goverment spends money for goverment tasks, like building roads and that stuff. So cutting down on construction projects would hurt private enterprise, which builds that roads actually. And private enterprise that usually sells stuff for the state.

"Than government expenditures". Yes, so why a tax-cut, which is nothing else but a goverment expenditure. How do you think goverment can wisley assess, who's taxes need to be cut ?

"worthless "University" and "Nobel Prize" winning theorists" You mean like Einstein and such ? Einstein was wrong, the relativity-theory has never been proven ? There is no such thing as a nuclear-reactor ? Light doesn't bend ? Common, people get noble-prices for reached achievements. It's somekind of "pay".

Hm, that's because democrats are copy-cats. They copy Ronnie:

Hm, stop spending, then stop taxing. The other way around ? Never stop spending but lower taxes and let the grand-children pay the bill.

 

Another aspect of the new tax program of Bush's was explianed to me by a Howard Dean worker (liberal competitor). Now high paid CEOs are going to be able to take large stock options - we all know most of them have them -- and from the price they aquired them, now be able to sell them at a market price and not pay taxes on the profit. It's called a "cashless options sale." Before these CEOs would have had to pay tax on this kind of transaction as income, but no longer. Maybe Darkwolf can explain if this is correct or not, since he knows quite a bit about stock transactions, and I am only taking this person's rant on it. If it's true, it sounds really, really rotten.

[ May 28, 2003, 01:05: Message edited by: Chandos the Red ]

 

Darkwolf,
people who are paid to be right? People like Enron (and here , nicely animated) and their pet-accounters from Merryl Lynch? They have been not-so-quite-right in the past time, and not-so-quite-honest either. These people who get paid to be right have a primary interest in their own money.

http://www.guardian.co.uk/enron/story/0,11337,862090,00.html

I'd really trust more in some worthless academic noble price winner rather than a "paid-to-be-right" guy. As a comparedly *poor* academic he usually has less own financial interets. He may be more neutral and perhaps less subject to lobbyism, bribery and less tempted to fraud.

 

Chandos, sounds like the Howard Dean representative is talking about the same thing Warren Buffett is talking about in the article I linked above. Warren Buffett's example would net him 300 + million tax free essentially and, like he says, don't blame the corporations for that -- Congress would be forcing them to do it essentially.

As an aside, I would love to be able to just afford some Berkshire-Hathaway stock -- Warren Buffett is a genius.

 

Just a quick question to all those opposed to the tax cut.
How much did you pay last year "net" in Federal Income Tax?
By net, I mean income tax paid minus any payments from the Feds to you; school grants and loans with the intrest paid by the government, EIC payments (the largest area of tax fraud), Federal grants for other purposes, etc . Do not count FICA taxes since they are not affected by the tax cuts.
So are you a consumer of tax money or a provider?
If you are a consumer, what in the HELL makes you think that you deserve someone elses money?

 

Ah! Thanks, Laches. I'm really not up this stock trading business.

Claron - I'm a citizen, voter, taxpayer. And never cheat on my taxes, and hardly ever complain about paying my share. I don't quailfy for most of what you were ranting about. So, what the "hell" are you talking about?

 

You did not answer my question, are you a net consumer or a net provider?


If you are a provider, why do you consider that the amount the government takes to be a fair share? Could you not do much more good with the fruits of your labor than some half-wit who cannot find productive work and must take a government job?

 

I guess I'm a provider, since I paid in. Are you an independent, like I am, since you think the government in run by (half-wits) Republicans and Dems?

 

Ragusa,

There is a difference between analysts and economists. Regardless, Enron could have had Alan Greenspan Paul Volker, and any other economist you can name, and they still would have gone in the tank because the problem was with greed, not economic forecasts.

Economics professors are great at theory, but if they could do the job, they would be out in the business world, coincidentally, paying taxes, because good economists pull down 6 figure salaries, and good college Profs are lucky to make half of that.

By the way, your nice little animation provides nothing but propaganda. I went around and clicked on all the "red" players. The highest position any of them held in Enron was VP, do you know how little influence a VP has in a major corporation, or how many of them there are? Every one else was a consultant, advisor, or received campaign funds, which proves absolutely nothing. You and I have no idea what they were advising Enron's top executives to do. For all we know they were telling Enron to ratchet it back. As a matter of fact, nothing I saw in your links that connected any anyone to anything worse than telling bad jokes and taking campaign contributions. It amazes me that people can watch someone on TV perjure himself in front of a Federal Judge, and claim that is ok, but claim that someone else who received perfectly legitimate campaign funds is dirty because the company that gave it to them turned out to be crooks. And by the way, Global Crossing was a big supporter of the Democratic Party, and none of the Dems gave back their campaign contributions (not really directed @ Ragusa, I don't think he cares one way or the other about the US political parties).

Economists (not stock analysts) who work for major corporations can't effect the economy, or stock prices, they only get one chance to slit their throats for their own interests before they are relegated to being professors, and they don't have the influence to be able to get anyone to cook the books like Enron, WorldCom and Global Crossing did, so they really can't get into the "big bucks".

Just so that everyone understands the difference between and stock analyst and economist, economists don't tell you which companies' stock to pick, they tell you what industries are in a favorable position for growth. Economists don't tell you when to sell a companies stock, they forecast the potential for less that favorable conditions in a segment of the economy. Economists don't make predictions on the return of a particular mutual fund. You rarely see them on TV because people think that they are too vague and boring because they usually don't talk about the "hot" stocks and investments. They tend to look a broad ecomic trends and try to predict how they will play out.

 

Bottom line -- if a tax break comes down the pike and I see more money on the Net side of my paycheck, I'm happy. I bust my butt to keep my family afloat, and while I don't mind helping out the less fortunate a little, I'd rather take care of my family first, because as far as I'm concerned, they are my primary responsibility. I'm not focussed on what other people may or may not be paying -- I just want to pay less. Selfish? Maybe. But I've got bills to pay and children to raise, and the more resources I have to do that the happier I am.

 

I hardly know anything about economics, but if we adopted a flat tax wouldn't that make cutting taxes much easier? Everyone would get the same amount back cause everyone is paying in the same amount. No pointless back and forth about the rich getting more...

 

No, a flat tax wouldn't end the bickering.

First, there would be endless bickering about what the flat tax would be. You think people are bickering now? You ain't seen nothing until you imagine someone trying to implement a flat tax that would reduce the taxes on the wealthiest in the nation by a tremendous amount. See, you have to set a flat tax first right? So, what number do you pick? Currently a lot of people (about half the people in the US) pay virtually no income tax at all. Then you have tax rates from 10% all the way up to ~38%. Any single person earing more than about 67k a year will pay 30% + income tax; these are the people in the top 25% of the country, or approximately in the top 25%. (edit - for simplicity assuming a single person throughout).

So, that's the situation. What number do you pick? You'll end up raising the rate on the less well off or drastically lowering it on the well off. Either option is going to make a lot of people angry. If a flat tax were to go through, it would most likely be something like 20% or so and would really piss off people who think the rich are taking advantage of people because it would raise the rate many are paying while giving an 18% plus tax break to the anyone making ~300k per year.

Also, that would likely reduce the overall money going into the treasury by a significant amount.

No, a flat tax wouldn't end the bickering in my opinion because many people think those who are well off should have to pay more and would raise quite the cry if they don't pay their 'fair share' which equals 'a lot more.'

Imagine there was a flat tax though. Hypothetically, let's set it at 20%. Let's then compare why people would still pitch a fit if there was ever a change to the tax rate then (and let's be somewhat realistic, there would be changes over time). Compare a person making 20,000 a year with the person making 2,000,000. They are taxed 4,000 and 400,000 respectively (set aside things like breaks for children etc, assume we've two single guys.) Now, what if you drop the tax rate by 1 to 19%? They now pay 3,800 and 380,000 respectively.

Now you see why there would be bickering right? The fighting would be just like it is now. Those predisposed to dislike the "rich" will complain that it is a tax break for the rich because it saves the rich guy in the example 20,000 but the other guy only 2,000. The other side will say that the percentage cut is equal and since the rich guy pays so much more into the system he should get a bigger cut. The other side will continue to focus on the total dollar amount though and say things like: "one guy can buy new tires and the other guy can buy a new Lexis, that's not fair."

Class warfare has been around for a long time; indeed, some people really like it and inject it where it doesn't exist. It won't go away with a flat tax unfortunately.

 

Ok, my 5 cents to taxes again:

A. Who should pay more taxes, the one who's able to pay more money: (Imaginary numbers)

Person A: Makes 100 -> Has to give 30
Person B: Makes 50 -> Has to give 15
Person C: Makes 25 -> Has to give 7.5
Person D: Makes 12.5-> Has to give 3.75

But oops, Person D needs 12 to pay for food and housing, has only 0.5 left. So, taxes have to be reduced from 3.75 to 0.5 -> The procent share for the lowest has to be reduced. Person A paied (sp ?) 30 %, Person D paied 0.5, that's under 5 %, but that Person D is after paying taxes butt naked a.k.a. no dam money left, wheras Person A has still 70 left, Person C has 17.5 left.

B. Important is also the tax-structure. Does the Federal goverment gets it's money only through income taxes ? Or are there other kind of taxes, like taxes on goods and even more taxes on goods which are imported ? Let's say thoses goods-taxes are 10 %, then Person D, which needs all the money to pay for needed goods, has already payed 10 % taxes, that's 10 percent of 12.5 = 1.25, but "only" payed 0.5 for income taxes.

C. Lord Depaara made a good point. You got to lookout for yourself. If I have a calculator, find that I make a bad deal with the proposed tax-cuts, I say no way, the other way around. The mantra of the Republicans is: Everyone who can use a calculator and doesn't agree with them has a "blind hatred for the rich".

D. I, oppoesd to the "republicans" believe not, that Goverment spends it's money wisley

E. The Republicans have a strong believe, that the only one who can spend money wisely is the goverment, becuase the goverment in this case is spending money it has not, and uses it to cut-taxes for a special interest group. There's ofcourse the Republican mantra, he, who does not believe, that goverment is the only one who can spend money wisley, has some kind of blind hatred for the rich.

F. Again, I look for my skin and my special interest group and what's good for me is not good for others and vice-versa. I am opposed to pay welfare for the rich.

G. The Goverment is spending money through a tax-cut which it does not have. Look at the budget-deficit and say ouch.

H. Yes, the per-head games yields, that the budget-deficit and the giantic goverment is not that big, but for the Chines, which have a 4-times bigger population, the same wound would be 4-times smaller.

I. Voodoo-econocims, we cut taxes and the economy will raise again. Yep, economy grows through growth of population and through growth of productivity. So, Voodoo does not yield results, if you don't have Bill Gates.

J. Sadly, in our country, they start too, reading too much Hayek. But as long we got enough people who can use calculators, they will not ruin our economy.

K. What does a European like me care for the US-economy ? The same worry, which he shares with the Japanes and Canadians. The reasion for the existence of Americans is to buy goods. If they rape their economy, all western economies together are f*** up. Only China remains as horse which pulls the world. ....... dam it, SARS.

The Americans are fleeing from the Dollar.

http://news.bbc.co.uk/2/hi/business/2948988.stm

http://news.bbc.co.uk/2/hi/business/default.stm

[ May 30, 2003, 11:34: Message edited by: Yago ]