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05/22/2003 Archived Entry: "Blah3 reader on the Big Tax Cut Lie"
Blah3 reader on the Big Tax Cut Lie
A B3 regular works for a major financial house in NYC. Here's his slant on the Big Tax Cut, and how the administration worked true to form by getting it passed by lying. Thought it was worth posting here.
The Bush administration's liberal use of "sunset" provisions puts the big --
and I mean BIG -- lie to the size of its tax cut proposals. In Tax Cut I,
the administration got passed a gradual reduction in estate taxes through
2010, when they're eliminated completely. Until 2011, that is, when they're
scheduled to return. The problem here is twofold: If you're an (elderly)
adult in 2010 with a reasonably large estate, you should sleep with one eye
open. Expect the level of matricide/patricide to spike in the last year of
tax-free generational wealth transfer, as baby boomers see to their parents'
demise in order to avoid paying upon the return of the estate tax. Speaking
of which, what politician is going to speak against what will then be the
status quo (i.e. no estate tax) in favor of allowing the sunset provision to
take effect and returning the tax? Not one. Anyone who does so will be
immediately derided as a tax raiser and promptly roasted. The pressure to
keep the tax eliminated will be overwhelming. Ditto for yesterday's Tax Cut II. The elimination (or reduction) of the
double taxation of dividends is, of course, a good thing (though it should
have been done on the corporate side, allowing corporations to deduct the
amount of dividends they pay to shareholders). However, once again, the
administration used dubious sunset provisions to bring taxes back
(presumably after Bush's (God forbid) second term). As Warren Buffett so
succinctly put it in his Washington Post op-ed piece (Dividend Voodoo) two
days ago, these nonsensical sunset provisions are going to dictate both
corporate and shareholder behavior: shareholders will want less in
dividends in years when they're taxed, and will crank up the pressure on
corporations to pay as much as they can when dividends are tax free. Is
this any way to run the capital markets? And again, any politician who
dares voice his support (in years to come) for allowing the taxes to return
will not be a politician for long. Meanwhile, deficits will continue to
balloon, the economy will continue stagger, and jobs will continue to be
lost. And the rich will get richer, even though both Mr. Buffett and fellow
billionaire George Soros have both voiced their disdain at the proposals.
Replies: 3 people speak up
As I might have mentioned before, one problem with the proposed federal tax cuts is that states and cities will be forced to increase their taxes and fees (while reducing services).
Here in NYC, the maintenance on my coop increased by $75/month (mostly due to the 18.5% increase in the real estate tax). Then starting in May, the MTA fare increased a staggering 33.3%. For me, that translates into an additional $21/month.
So if we annualize both increases, I'm poorer by about $1,150. So my federal tax cut has to be at least that much in order for me to breakeven.
Then again, my employer cut me back to 3 days/week. That's a 40% reduction in gross wages.
To sum it all up, I'd need an $18,570 reduction/refund of my federal income taxes to breakeven. What are my chances for that? Can you understand why I sooooo depressed?
Posted by Metropolitan99 @ 05/22/2003 01:47 PM NY
yeah, the $30 i will be saving on my taxes this year hardly seems worth all the suffering that will be caused. The estate tax is obviousely rediculous, as is the marriage penalty, but on the other hand, i also think income taxes are wrong to begin with. however, untill a better way is found to fund important government programs i guess we will always have taxes. i would pay my taxes with a smile, if they went to fund reasonable programs, like education, health care, the environment, and to help reign in corporate power, so people dont lose their jobs so the profit margin can be increased.
ive been unemployed since september, when i moved to chicago, but that is my fault for going to art school i guess,but my wife works at a food pantry, and their client list has increased by 50% over the last year, here in the job loss capital of the country. The commander in Theif has ruined this country's economy, and bankrupted state budgets with his warmongering, and tax cuts for the rich. even if you ignore the tax cut, there is still no reason to have a deficit, or to have to cut important programs. what we need to do is cut the military budget. there is no reason we need to spend as much as the entire rest of the world for our military. we could cut that in half and still be able to kill as many innocent people as we feel necessary. if we are going to have such a huge military, we should put them to work for the public good between wars, as firemen, or building roads, or repairing schools, whatever the states need done. we also need to end the drug war, that costs us billions a year, and does nothing but ruin innocent peoples lives. and we could also save billions by ending corporate welfare, and throwing those bums out on the streets. in the county i grew up in, the library budget has been cut by 90% so the state can fund its federaly mandated homeland security programs (which didnt come with any funding) i guess what im saying is, its time to throw these goons out like the french did to their royal family (although preferably without all the guillotines and massacres)
once again, the french to the rescue with new ideas
Posted by justin mccormack @ 05/23/2003 02:01 PM NY
Justin,
We should have a contest: which U.S. city lost the most jobs? I still say that NYC is the #1 wasteland.
70% of Americans approve of President Draft-dodger. I just don't get it! It would be comical if it wasn't so tragic.
Posted by Metropolitan99 @ 05/23/2003 03:54 PM NY
