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Tax Day Rhetoric Aside, Americans' Bills are Lower
WASHINGTON - You wouldn't know it by the Tax Day rhetoric, but Americans are paying lower taxes this year, even with increases passed by many states to balance their budgets. Don't expect it to last.
Elaine Scholtz waves at cars in front of Liberty Tax Service in Laconia, N.H., Wednesday, April 14,2010. The deadline for filing taxes is Thursday. (AP Photo/Jim Cole) Congress cut individuals' federal taxes for this year by about $173 billion shortly after President Barack Obama took office, dwarfing the $28.6 billion in increases by states.
In the next few years, however, many can expect to pay more. Some future increases were enacted as part of Obama's health care overhaul. And former President George W. Bush's tax cuts expire in January. Obama and the Democrats want to renew only some of them, thus raising taxes for individuals making more than $200,000 and couples making more than $250,000.
As this year's April 15 federal deadline passes, the debate about future tax increases has Republicans in Congress and conservatives across the country portraying Democrats as tax-and-spend liberals even before any new levies are approved. The discussion also is helping frame the congressional elections this fall.
"The fact is in the past year we have had more tax cuts than almost anytime in our nation's history," said Rep. Steve Cohen, D-Tenn. "It's something that people don't realize because of the false rhetoric that is spread throughout this Congress."
Grover Norquist, president of Americans for Tax Reform, said conservatives didn't see any need to wait before protesting.
"I thought that we were going to have to wait until the tax increases started to see popular unhappiness," Norquist said at a Capitol Hill forum Wednesday. "Last year, people started reacting, the tea parties started organizing, in reaction to spending too much. They didn't wait for the tax increases to come."
The massive economic recovery package enacted last year included about $300 billion in tax cuts over 10 years. About $232 billion was in cuts for individuals, nearly all in the first two years.
The most generous was Obama's Making Work Pay credit, which gives individuals up to $400 and couples up to $800 for 2009 and 2010. The $1,000 child tax credit was expanded to more families, and the working poor can qualify for as much as $5,657 from the Earned Income Tax Credit.
There were also credits for qualified families who buy new homes or make energy improvements to existing ones, as well as tax breaks to help pay college tuition or buy new cars.
"From investing in small business to buying a home or making it energy efficient, to sending your children to college to buying a car, these tax cuts are helping families and businesses across the country," said Rep. Russ Carnahan, D-Mo.
At the same time, many states raised taxes last year because they are required by state constitutions to balance their budgets, even during a recession. In all, states increased personal income taxes by $11.4 billion, according to the National Conference of State Legislatures. They increased sales taxes by $7.2 billion and business taxes by $2 billion.
The biggest tax increase in the health care overhaul is limited to individuals making more than $200,000 and couples making more than $250,000, though other increases would hit lower income taxpayers.
For the first time, the Medicare payroll tax would be applied to investment income, beginning in 2013. A new 3.8 percent tax would be imposed on interest, dividends, capital gains and other investment income for individuals making more than $200,000 a year and couples making more than $250,000.
The bill also would increase the Medicare payroll tax by 0.9 percentage point to 2.35 percent on wages above $200,000 for individuals and $250,000 for married couples filing jointly.
"We know the tax man cometh, and over the next few years, boy, will he be coming with a vengeance," said Sen. Orrin Hatch, R-Utah.
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Raging Grannies of South Florida shared their thoughts on this issue the other day, with their own inimitable brand of singing activism. Check it out at...
http://www.youtube.com/watch?v=Hjk6lFT-tus
Just paid mine, owed the State got back from the Feds. It isnt the paying of taxes that bothers me, I think it an obligation and an investment for which I get a return, good roads, police, fire, education for my grandkids etc...But there are far too many things being done with our money to which I object, money spent unwisely, extravagantly and for deeds I consider unlawful.
In Clinton's time, even with a Democratic majority in both houses of Congress, raising taxing on the very rich barely passed. Today, even with a stronger majority of Democrats, nobody wants to even look at the issue. I talk to a lot of Obama loyal supporters and even when they're poor they say "Let him do it when he has the votes !" or something like "He's doing the right thing of postponing rolling back taxing the wealthy" and they'll say the same thing for their Democratic Congress critters. But there is plenty of good reasons why some people don't want to pay taxes. Who can trust a government that keeps spending on wars, bailing out corporate giants, and financing the privatization of everything with our tax dollars? But what does it matter when we're borrowing from China endlessly anyway?
TAXES LESS -- ONLY FOR 51% VOTING MAJORITY
Those in the U.S. who do not have 12 years of education, they have more then one thing in common:
(1) All live in laboring class slum neighborhoods.
(2) All are not of the 51% voting majority, great jobs and those with terrific homes.
(3) None have healthcare insurance.
Now, I know me be just a dumb slow thinker laborer, but surely gentlemen, why is all of government and mass media dead silent on the correlation between intelligence, education and wealth?
More mainstream disinformation, which like all good disinformation is partly true.
Federal, state, and municipal revenues are down hugely, yes, but because the tax base is disintegrating.
This is the second stage of the wave that is the collapse, also easily predictable.
Incidentally, in that context, Obama's ill-conceived Health Insurance reform, benefiting mainly the for profit insurers, will be a complete economic disaster when it kicks in.
That boy needs some economists trained in Ricardo and Marx by his side twenty-four hours a day until he learns some real world economics, and crafts his stimulus programs accordingly.
In the end, whatever his Stepan Fetchit style, he is a lawyer, with a lawyer's simple-minded view of the world.
And remember, Stepan Fetchit was a brilliant actor, who detourned the white racists' mockery. In private life he was a very intelligent fellow, nothing like the film persona.
Sorrily, one apparently cannot say the same about Obama.
The 2009 Federal budget deficit was one trillion four hundred billion, and is projected for 2010 at one trillion five hundred billion (source: Monthly Treasury Statement of Receipts and Outlays of the United States Government - Septemeber 2009).
For fiscal year 2008 - BEFORE the healthcare bill passed - mandatory entitlements (ie; social security and medicare) accounted for 53% of federal spending - one trillion five hundred fifty billion (coincidentally similar to 2010 projected deficits)! In that year, if we cut the ENTIRE military budget (six hundred and seven billion)and ALL domestic discretionary spending, like FDA, FCC, infrastructure, DOE, etc., (four hundred fifty billion) we would still have a deficit in 2010 of almost FIVE HUNDRED BILLION!
Of course, this cannot happen, so;
How do we get to a balanced budget? Does this conundrum worry anyone else?
dpjr
Yes, it worries me greatly. The answer to your balanced budget question of course is...No.
Under the irresponsible governance we have now, you may only count on less medical care, higher costs, more taxes of every kind, higher debt and fewer services and continuing high unemployment.
You should read this if you're worried about federal spending:
http://neweconomicperspectives.blogspot.com
/2010/04/what-is-responsible-fiscal-policy.html
Zmann, thanks for the link and that is an excellent blog. I wasn't even aware of my university starting the blog. They sound more nonpartisan than most economic blogs out there but I will be sure to check them out. If I can't send the uneducated to school, then I'll just have to bring them education and find some ways to give it to them in a manner that it appeals to them. :)
This website is also excellent: http://www.newdeal20.org/
The authors are usually very good at answering questions posted to the blog.
Deficits in and of themselves need not be problematic. It hinges partly on the economy. In this case, however, the US is now completely in the Financial Capitalist mode with a comatose genuine economy.
Ironically, Kucinich's Health Care plan, which was to make universal Health Insurance the business of a non-profit Federal Insurance Corporation, would help the real economy enormously and might even turn a profit.
Obama's and the Democrats' present Health Insurance is the worst of both worlds, and, as Kucinich himself notes, benefits only the for profit Health Insurers, who are exactly the problem. As such it is actually regressive economically and will be an economic disaster, exactly as it is designed to be.
But it is a victory for Obama! Everyone keeps saying so. It's just like 'lower taxes'.
Why do I feel like I'm still getting screwed, but by a bigger cock?
The worse problem than all of that is the USD is no longer the world reserve currency, but just a choice. The Financial Capitalists have still not figured out what that means, and are not only fooling the American public, but also fooling themselves.
There is really no easy way out of the present fix.
One way of putting it sounds absurd but has a strong element of truth: Communism is the only way to save US Capitalism now.