WSJ.com: Key Tax Breaks at Risk as Panel Looks at Cuts .

[Popeman38]

Uh, I have to admit that I'm having a lot of trouble believing your 12% claim. But I'll also admit that I'm not fully aware of how the child tax credit works. Haven't really played with those numbers, much.

(That's an invitation to educate me, if you'd like.)

Easy for the Child Tax Credit. You get a discount of $1000 for every child under the age of 18 you claim as a dependent.

As for the 12%, the child tax credit and the mortgage interest literally drops me from the 25% tax bracket to the 15% tax bracket. But if you do the dollar for dollar comparison (which I would prefer not to do on the interwebz because it involves specifics), losing these two exemptions alone will literally cost my ~12% -- with the disclaimer that I will have to sit down and do the exact math but I would project my margin of error at +/-3.

EDIT: The 12% increase is a percentage of income.

[Larry]

$10,000 tax credit? Or deduction?

I assume it's a credit, since that's what it's called.

A credit doesn't change your marginal tax rate. A 10K credit simply means "take $10K off your taxes".

(Most tax credits, though, the way they work is, ad $10 credit "pays" you (reduces your taxes by) $10, until your tax gets to zero. Some tax credits go further, and once they've reduced your taxes to zero, the government actually pays you what's left. With them, a $10 credit "pays" you $10, even if your taxes were zero, already.)

(I think that the child tax credit is one of those kind of credits.)

If so, then it's ridiculously easy to figure out what the effect of losing a $10,000 tax credit works out to. It works out to $10,000.

----------

Now with a tax deduction (like the mortgage interest deduction) the relationship is that

(Amount of deduction) times (marginal tax rate) equals (amount of savings).

Which is one of the funny things about tax deductions.

The fact that it's multiplied by your marginal tax rate means that a tax deduction is much more valuable to people in the higher marginal rates.

Joe Dirtpoor is in a 10% marginal rate. This means that the government "pays" 10% of the interest of his mortgage. (In fact, if Joe Dirtpoor is in a 0% bracket, then the mortgage deduction does absolutely nothing for him.)

Dan Snyder, evil capitalist millionaire, is in the 35% marginal rate. That means that the government "pays" 35% of the interest on his mortgage.

It would be just about impossible for the mortgage interest deduction to account for 12% of your total income.

Even if you were in the 35% tax rate, you'd have to be spending 1/3 of your total income, just paying the interest on your mortgage, for it to have an impact of 12% of your income. In that case, the mortgage deduction would equal 35% of 1/3 of your income.

[alexey]

Nope.

Now, let's look at the differences between your analogy and the subject of the thread.

1) Our 100K revenue reduction didn't occur because our customer left us. It occurred because the CEO decided to give one customer free service for a year.

2) When we decided to hand out freebies to select customers, our expenses didn't go down. (In you analogy of the customer leaving, we lost his revenues and his expenses.)

3) Now that customer #1 has been given free service for a year, he's demanding that it must be free next year, too, or else he's going to yell that you're charging him a price hike. He's demanding that he be given free service forever, and insisting that we make up for the lost revenue by cutting back on the service we deliver to Customer #2.

Good one.

[December90]

Nope.

Now, let's look at the differences between your analogy and the subject of the thread.

1) Our 100K revenue reduction didn't occur because our customer left us. It occurred because the CEO decided to give one customer free service for a year.

2) When we decided to hand out freebies to select customers, our expenses didn't go down. (In you analogy of the customer leaving, we lost his revenues and his expenses.)

3) Now that customer #1 has been given free service for a year, he's demanding that it must be free next year, too, or else he's going to yell that you're charging him a price hike. He's demanding that he be given free service forever, and insisting that we make up for the lost revenue by cutting back on the service we deliver to Customer #2.

1) So does this mean that you are one of the uneducated fools who believes that the "Bush Tax cuts" only benefited the top. I thought from other posts that you knew better than that.

2) We need to stop the "freebies" is that something that you and I agree upon?

3) It is funny you think that the only the people who are actually paying the majority of taxes are complaining about the loss of "free stuff".

a couple simple questions:

At what rate would you say the marginal tax rate is too high? (income level and rate)

Do you think that the entitlement programs of the Federal Government are solvent financially for the long term? (defining these programs for simplicity as only Social Security, Medicare, and Obamacare)

[Thiebear]

Good one.

Technically its way off..

It should say the CEO decided to end a credit of 3200 for a service since he has been a customer.

the CEO says its not an increase, just a removal of a credit due to costs.

The customer then notes the CEO pay went up the same amount.

The CEO says were your not seeing the big picture...nobody can do my job, i make sure you're happy.

The customer notes that every employee gets a severance package for life.

The CEO agrees and says you don't want people to go broke do you they put some money in each month?

The customer notes that there is a cafeteria in the office with Free food nobody bothers to eat.

The CEO agrees and said they had to give it 2mil just incase someone was to eat there. (shift work you know).

The customer notes that the children of the employees children get breakfast/lunch/dinner.

The CEO agrees and said the employees were hard pressed to feed the children so we do now in SAC.

The customer asks about the 340billion in missing revenue each year not collected.

The CEO agrees to get right on that once he gets more money

The customer asks since he's already paying 100k can't the CEO find something to cut.

The CEO agreed and said the credit was 'it' and smiles, hangs up.

The customer shakes his head in wonder

The CEO marks his record with 'ungrateful' and 'stingy'.

[twa]

the credit was 'it'

Good one...they are making the hard cuts of raising your taxes

[nonniey]

Technically its way off..

It should say the CEO decided to end a credit of 3200 for a service since he has been a customer.

the CEO says its not an increase, just a removal of a credit due to costs.

The customer then notes the CEO pay went up the same amount.

The CEO says were your not seeing the big picture...nobody can do my job, i make sure you're happy.

The customer notes that every employee gets a severance package for life.

The CEO agrees and says you don't want people to go broke do you they put some money in each month?

The customer notes that there is a cafeteria in the office with Free food nobody bothers to eat.

The CEO agrees and said they had to give it 2mil just incase someone was to eat there. (shift work you know).

The customer notes that the children of the employees children get breakfast/lunch/dinner.

The CEO agrees and said the employees were hard pressed to feed the children so we do now in SAC.

The customer asks about the 340billion in missing revenue each year not collected.

The CEO agrees to get right on that once he gets more money

The customer asks since he's already paying 100k can't the CEO find something to cut.

The CEO agreed and said the credit was 'it' and smiles, hangs up.

The customer shakes his head in wonder

The CEO marks his record with 'ungrateful' and 'stingy'.

Good one ;-).

[Larry]

1) So does this mean that you are one of the uneducated fools who believes that the "Bush Tax cuts" only benefited the top. I thought from other posts that you knew better than that.

If you've read my other posts, then why are you accusing me of believing something that no one has ever said?

(Other than the traditional, reflexive urge, when discussing an issue, to make up a position for somebody else, and then argue with the position you just invented.)

2) We need to stop the "freebies" is that something that you and I agree upon?

Everybody's opposed to Freebies, Waste, Abuse, Giveaways, and lots of other negative-sounding words.

Different people simply differ as to what they are.

(I'm tempted to claim that there isn't a single line item in the entire federal budget with "Freebie" in the name. But then, knowing the federal government, it's possible I'd be wrong.)

3) It is funny you think that the only the people who are actually paying the majority of taxes are complaining about the loss of "free stuff".

It's funny that you persist in this attempt to invent fictional positions, and then try to claim I have them.

a couple simple questions:

At what rate would you say the marginal tax rate is too high? (income level and rate)

I certainly don't claim to have an exact number.

I'll certainly agree that back in Kennedy's day, 90% was too high. (The expression I like was that 90% isn't a tax, it's a confiscatory fine.)

(Although I'd also observe that back when the official rate was 90%, no one came close to paying it. Just like they don't pay the official highest rate, today.)

I seem to recall that when Reagan took over, the maximum rate was 70%. Still WAY too high, IMO.

However, we're not arguing about whether the rate should be 70%, or 90. What we're discussing are the claims of financial catastrophe if we leave alone an already-passed law, which has already been factored into the budgeting, which calls for a temporary reduction from 37% to 35%, to expire, as planned.

(I'll also observe that, according to this site, those "top tax rates" still aren't the rate that people actually pay. Their data doesn't break down into "people in the X bracket", but their first chart says that for people in the "top 1%" club (club is open to people making $380K or over), the average member of the club paid 23% of his income in taxes (total Income and Cap Gains taxes). While I'll freely admit that I'm pulling this number out of my Philly, it seems logical that if an "official" tax rate of 35% yields a "real" tax rate of 23%, then an "official" rate of 36 should only cause the "real" rate to go up to 24 or so.)

(In short, when it comes to the difference between the Obama plan and the Republican "extend everything" plan, all of this grand theatrics and cries of impending doom are about whether 1% of the population will experience a 1% tax increase.) (1% of their income.)

In short, my personal opinion is that when we're facing a very fragile economy, and record deficits, then no, I don't think that a 1% tax increase is a monstrous thing to discuss.

Do you think that the entitlement programs of the Federal Government are solvent financially for the long term? (defining these programs for simplicity as only Social Security, Medicare, and Obamacare)

Well, I certainly don't know about Obamacare. But, given past history . . . .

No, SS is not "solvent financially for the long term".

That said, though, I do have to point something out.

Neither is any other federal program. You think the Defense Department is set to go the next 75 years without a rate increase?

Neither, for that measure, are any private insurance programs I know of. How many years, lately, did your health insurance not go up? Or other insurance?

Think that Blue Cross has enough money in the bank, right now, so that they can pay benefits for the next 75 years, without a rate increase? If the answer is "no", then should we immediately get rid of this proven-failure ponzi scheme which cannot possibly be there in the future?

Think the NFL has it worked out so that they can last for the next 100 years without increasing ticket prices?

How come the only entity in the entire world where the GOP seems to believe that anything that isn't prepared to last for 100 years without any additional revenue, is a catastrophe, are SS and Medicare?

(That said, though. Frankly, I support raising the retirement age to 70. (For most people. No doubt there will have to be exceptions. I don't think we want 70 year old long-haul truckers, heading down the highway.) In fact, back in the last election, one of my fantasies was that McCain would decide that he didn't need a second term, therefore He'd decide to "tough the third rail", and raise the retirement age.)

(I think the retirement age has to be raised slowly, or else it's not fair to the people who were on the verge of retirement, to "move the goalposts". But I think that we need to set the change in motion, now.)

[Larry]

the credit was 'it'

Good one...they are making the hard cuts of raising your taxes

Have to confess that I'm not getting your point.

(Which might be due to your traditional reluctance to make one.)

[alexey]

Technically its way off..

It should say the CEO decided to end a credit of 3200 for a service since he has been a customer.

the CEO says its not an increase, just a removal of a credit due to costs.

The customer then notes the CEO pay went up the same amount.

The CEO says were your not seeing the big picture...nobody can do my job, i make sure you're happy.

The customer notes that every employee gets a severance package for life.

The CEO agrees and says you don't want people to go broke do you they put some money in each month?

The customer notes that there is a cafeteria in the office with Free food nobody bothers to eat.

The CEO agrees and said they had to give it 2mil just incase someone was to eat there. (shift work you know).

The customer notes that the children of the employees children get breakfast/lunch/dinner.

The CEO agrees and said the employees were hard pressed to feed the children so we do now in SAC.

The customer asks about the 340billion in missing revenue each year not collected.

The CEO agrees to get right on that once he gets more money

The customer asks since he's already paying 100k can't the CEO find something to cut.

The CEO agreed and said the credit was 'it' and smiles, hangs up.

The customer shakes his head in wonder

The CEO marks his record with 'ungrateful' and 'stingy'.

I have to admit that I am having a hard time detecting your point.

If you are saying that we have other multiple problems that need addressing and spending cuts to make, then yes.

If you are saying that these other problems somehow justify extending tax cuts, then show me your math.

[Thiebear]

My point was very clear: CUT the crap before you raise the taxes.

You want me to pay an additional amount to fix our debt.. FINE, show me the 'details'

so far all we have is a promise from a commission created to keep others clean... Kinda like Fannie and Freddie debt going to banks ready to fail, so they could get a clean slate? ..

Promises only mean something if you follow through.

“And the American people told us they expected us to work together for fiscal responsibility, with the highest ethical standards and with civility and bipartisanship.

“After years of historic deficits, this 110th Congress will commit itself to a higher standard: pay-as-you-go, no new deficit spending. Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt.

“In order to achieve our new America for the 21st century, we must return this House to the American people. So our first order of business is passing the toughest congressional ethics reform in history. This new Congress doesn't have 2 years or 200 days. Let us join together in the first 100 hours to make this Congress the most honest and open Congress in history. 100 hours.

“This openness requires respect for every voice in the Congress. As Thomas Jefferson said, ``Every difference of opinion is not a difference of principle.'' My colleagues elected me to be Speaker of the House, the entire House. Respectful of the vision of our Founders, the expectation of our people, and the great challenges that we face, we have an obligation to reach beyond partisanship to work for all Americans.

“Let us stand together to move our country forward, seeking common ground for the common good. We have made history; now let us make progress for the American people.

“May God bless our work, and may God bless America.”

Fark.com: today: January 4, 2007: "After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending" Let's check in on the results (cnsnews.com)

At the close of business on Jan. 4, 2007, Pelosi’s first day as speaker, the national debt was $8,670,596,242,973.04 (8.67 trillion), according to the Bureau of the Public Debt, a division of the U.S. Treasury Department. At the close of business on Oct. 22, it stood at $13,667,983,325,978.31 (13.67 trillion), an increase of 4,997,387,083,005.27 (or approximately $5 trillion).

Raising taxes JUST to raise taxes means nothing.

Doing the HARD work in returning Troops, Fixing Social Programs and using those extra 600,000 employees to actually dig into the details and not be sloppy 100% of the time..

This year they tried to get out 'early'. Workin hard for us.

(230 days off this year?) including the 2.5 days a week they work NORMALLY...+ 134 scheduled days off.

Include the weekends and your up to approx. 230 days off.

(worst recession since the 1920's?

http://www.nga.org/Files/pdf/LEGCAL2009.PDF

Heres the one for 2007 that i was screaming about because we were MELTING down and they took 3 months off basically August - January:

January 15: Martin Luther King Day

January 25-26: House Republican Conference retreat

February 1-2: House Democratic Caucus retreat

February 19-23: President’s Day Recess

April 2-9: Easter Recess for the Senate

April 2-13: Easter Recess for the House

May 28 - June 1: Memorial Day Recess

July 2 - July 6: Fourth of July Recess

August 6 - September 3: August Recess

October 26: Target Adjournment for the House

(Excuse me if i want them to trim some of the fat before they put their relaxed puffy hands out again.

"When I tell constituents that our workweek is 2 1/2 days at best, they shake their heads," said Rep. Brian Baird, D-Wash. "They wonder what we're doing, and I have to wonder, too."

Does that clear it up for you Alexey: I feel Lazy ass people sucking at their jobs are asking me to kick in "Again" while they go fight for a job they haven't done and enjoy a nice 60days off. Then they ***** and moan about the current state of affairs while blaming the other side that is off also.

When the IRS Says i have to show every document or face a fine I pull my bank records and receipts and i show up for my guilty until proven innocent..

When the people say the Government has to show why they LOST 340billion while wasting 1trillion they say your right, we have to increase taxes....

[alexey]

My point was very clear: CUT the crap before you raise the taxes.

How about, balance the budget before cutting taxes?

[Thiebear]

How about, balance the budget before cutting taxes?

before cutting taxes or before cutting several tax breaks.

[alexey]

before cutting taxes or before cutting several tax breaks.

Before reducing revenue.

Everybody hates taxes. It's easy to campaign for lower taxes. Lower taxes is just another way of buying votes. Don't reduce the revenue unless you demonstrate that you've got the balls to cut spending.

[twa]

Before reducing revenue.

Everybody hates taxes. It's easy to campaign for lower taxes. Lower taxes is just another way of buying votes. Don't reduce the revenue unless you demonstrate that you've got the balls to cut spending.

We already know the answer to that.

Increased spending is simply buying votes as well,and most do not even feel shame for it.

It also requires taking more from others to sustain.

added

Obviously there can be no balanced budget if you continually increase spending....ya sound like woman with a credit card:silly:.

[Thiebear]

So you didnt read the rant or could care less if every income tax dollar from every citizen in 2009 was wasted?

Just get more as my 5yr old was quick to say... go to the atm and get more...

Sometimes you have to say No... we need to be more responsible honey... and you'll get the same scowl and temper tantrum from the Congress if they were not taking off till next year.

I notice you keep rewording every statement to 'sound better' in your one liners of vagueness.

[December90]

Thiebear,

You just don't understand.

It was on sale for 10% off. I had to buy 10 that way I got 100% off. Think of all the money I am saving with these discounts.

what?

We couldn't afford 1, much less 10. Okay I will go buy more to save some more money.

======================

Ignore Political parties and ask yourself if Congress has not looked like this for way too long (Answering complaints about too much spending by raising spending). Put in someone, anyone, willing to say "STOP!" to the foolish wasting of the hard earned money of the American People.

If the government needs money for something and can demonstrate that it is being put to productive use then taxes are fine. If the government is simply looking to redistribute wealth from those who can make it to those who cannot of those who choose not to, then, not only "no" but "Hell No"

[Thiebear]

Here is the Washington Post

http://voices.washingtonpost.com/shortstack/2009/11/top_10_most_destructive_govern.html

i'll list only number 10, but would accept all of them to start:

10. WASTE, WASTE, WASTE. Government waste amounts to at least $600 billion. Consolidating the 86 welfare programs would save some $300 billion a year. Closing 25 of 50 useless major agencies, including the Maritime Commission, the Appalachian Regional Commission, the Rural Utilities Service, and others would save billions, as will cutting the number of cabinet agencies from 15 to 12. Eliminating earmarks - such as $107,000 to study the sex life of the Japanese Quail - would, since 1991, have saved $27l billion in useless pork.

[The Evil Genius]

Here is the Washington Post

http://voices.washingtonpost.com/shortstack/2009/11/top_10_most_destructive_govern.html

i'll list only number 10, but would accept all of them to start:

10. WASTE, WASTE, WASTE. Government waste amounts to at least $600 billion. Consolidating the 86 welfare programs would save some $300 billion a year. Closing 25 of 50 useless major agencies, including the Maritime Commission, the Appalachian Regional Commission, the Rural Utilities Service, and others would save billions, as will cutting the number of cabinet agencies from 15 to 12. Eliminating earmarks - such as $107,000 to study the sex life of the Japanese Quail - would, since 1991, have saved $27l billion in useless pork.

First - define waste.

Second - quibble over the definition. Because your definition of waste is someone's good program. Especially when it props up their local economy.

Third - look at private sector on how not to have waste.

Fourth - Take a few aspirin because the private sector is equal (or in some cases, worse) when it comes to wasteful spending.

Fifth - Keep the status quo. It's easier and as an fellow American, you know we prefer easy.

:evilg:

[alexey]

So you didnt read the rant or could care less if every income tax dollar from every citizen in 2009 was wasted?

Just get more as my 5yr old was quick to say... go to the atm and get more...

Sometimes you have to say No... we need to be more responsible honey... and you'll get the same scowl and temper tantrum from the Congress if they were not taking off till next year.

Yep. Sometimes you have to say no, we need to be more responsible honey. We need to reduce spending BEFORE you can have your tax cut.

[alexey]

We already know the answer to that.

Increased spending is simply buying votes as well,and most do not even feel shame for it.

It also requires taking more from others to sustain.

added

Obviously there can be no balanced budget if you continually increase spending....ya sound like woman with a credit card:silly:.

I'm with you on the spending, buying votes, and all that.

I'm just not into borrowing money so that we can give tax cuts.

I am also not a big fan of running the country into the ground, and then campaigning against the other party that had to spend money to prevent the whole freaking economy from crashing.

I have seen a lot of talking the talk, but not a lot of walking the walk. People keep pointing at "spending" and "waste" to justify tax cuts. Tax cuts are easy, spending and waste cuts are hard. If you cut taxes without cutting spending and waste, you are in a deeper hole. If you cut spending and waste without cutting taxes, your fiscal situation is even better.

(and hey, If somehow you end up with a surplus, how about paying off some debt)

[Thiebear]

Define Waste: Medicaid having 233% markup for the same products the Veterans Administration pays for.

Define Waste: Congress working 2.5 days a week and 6months off a year, but getting full time pay, benefits and retirement plans in 5 years..

(the equivalent of maybe 3 years of work in the real world). (do you know anyone that gets retirement in 3 years? Explosive Ordinance Division? Nope.

Define Waste: Paying out billions of dollars with no reporting or outright lying.

what do you define it as since you are now participating.. did you read the measly 2 pages.

There was more in that Washington Post article, did you read it or just answer my post with random questions?

[The Evil Genius]

what do you define it as since you are now particpipating.. did you read the measly 2 pages.

There was more in that Washington Post article, did you read it or just answer my post with random questions?

Since it's an editorial - it's hard to argue against it's "facts".

Like Problem #6 - Misinterpreting the Constitution.

And what..no mention of the DoD? Or the issues with obligation authority and state appropriations - which is how the Feds really skim money off the top?

[Thiebear]

TEG: Way to focus on the way out of participating.. Love people that will pick 1 line of 1000 and destroy 'it'.

while the other person didn't reference that line .... (always nice).

Do you have anything to add about say: what is being discussed? Or you going to nitpick the behind the scenes.

Could you post where i said every one of them was a 'fact' or used the word 'fact' other than trying to use a paper the opposing side could at least accept as not being partisan? Huffington Post and NY times when i can also.

i will go take a pill though.. i seem to be retaining water on this topic... taking a few hours off.

[The Evil Genius]

Or you going to nitpick the behind the scenes?

It's what I do best! Especially when those throwaway lines kill the intent (via absurd comments) of the entire editorial.

Do you think, honestly, if this wasn't a GOP hit piece...that the DoD waste wouldn't have been brought up?

:evilg:

And I do have plenty to add - hell, I have added it ad nauseum before.

I believe that there is no such thing as an efficient government. Or even an efficient business. So what are we arguing about again?