quote: o Permanently repeal the alternative minimum tax once and for all; o Permanently keep the capital gains and dividends taxes at 15 percent; o Permanently kill the Death Tax for estates under $5 million, and cut the tax rate to 15 percent for those above; o Permanently extend the $1,000-per-child tax credit; o Permanently repeal the marriage tax penalty; o Permanently simplify itemized deductions to include only home mortgage interest and charitable contributions. o Lower top marginal income rates from 35 percent to 25 percent. o Simplify the tax code to include only two other brackets, 15 and 10 percent. o Lower corporate tax rate as well, from 35 percent to 25 percent.
The total cost would be over $3 trillion.
36/41 Repubs voted for this. What were they thinking? "Let's drive up that national debt as fast as we can"?
Actually, it's obvious what they were thinking -- "The people in the top bracket are paying 7/5 times as much taxes as they should be."
Does anyone actually agree with this? Even the actual tax payers? There was a Times editorial a couple days ago from the Netflix CEO suggesting that the top bracket be raised to 50%.
Posted by natural_mystic (Member # 11760) on :
Apparently it's not 'generational theft' if the government has to borrow money because revenue is too low (as against spending being too high).
Posted by fugu13 (Member # 2859) on :
Actually, I like quite a bit of the plan, though I'd prefer to do it initially in a relatively revenue and tax-burden neutral way, then fiddle with the parameters later.
And I doubt it would actually end up reducing the tax burden of the highest tax payers all that much (proportionally to everyone else); many of them manage to arrange exemptions to pay a much lower effective tax rate.
But yeah, it was far too large a plan. And I don't think, even shrunk to a comparable size as the likely passing one (though that one will balloon to unforeseen size), it would be all that good a plan. But I'd probably prefer it to the one that will pass.
Posted by TomDavidson (Member # 124) on :
I would be perfectly willing to enact this plan under the following restriction: for three years before this plan goes into effect, balance the federal budget.
Posted by BlackBlade (Member # 8376) on :
quote:Originally posted by TomDavidson: I would be perfectly willing to enact this plan under the following restriction: for three years before this plan goes into effect, balance the federal budget.
I like that suggestion Tom.
Posted by Mucus (Member # 9735) on :
Yikes. And I thought the 15,000 tax credit for homebuyers was wacky enough.
Posted by Lyrhawn (Member # 7039) on :
quote:Originally posted by TomDavidson: I would be perfectly willing to enact this plan under the following restriction: for three years before this plan goes into effect, balance the federal budget.
You mean balance it to the level of reduced spending that would be allowed under the new tax structure? Or just get rid of the current deficit?
Either way, I'd say balance it and then cut another quarter to half a trillion in spending to start paying down the debt.
Other than that, I have no philosophical objection to cutting taxes.
Posted by Lisa (Member # 8384) on :
quote:Originally posted by natural_mystic: Apparently it's not 'generational theft' if the government has to borrow money because revenue is too low (as against spending being too high).
That's kind of a dishonest comment. I'm sure you're aware that they want to cut programs as well, rather than borrow or tax for them.
Posted by Marlozhan (Member # 2422) on :
quote:Originally posted by Lisa:
quote:Originally posted by natural_mystic: Apparently it's not 'generational theft' if the government has to borrow money because revenue is too low (as against spending being too high).
That's kind of a dishonest comment. I'm sure you're aware that they want to cut programs as well, rather than borrow or tax for them.
I agree with Lisa. The comment on 'generational theft" comes from the belief that the current government programs have to stay the way they are (or increase in number or size). One of my biggest pet-peeves with our government is that, when they are speaking of spending, the word "temporary" is not in their vocabulary. And if they do use the word temporary, they don't actually follow through with it. Whatever happened to the idea of cleaning house when it comes to government programs? I would love to see much more talk about which programs need to be cut, which ones need to be improved (and not automatically assume that improve means enlarge), which ones need to be strengthened, etc. If corporations approached their expenditures the way government did, they would not stay afloat long.
This is not to say that the government never cuts or streamlines programs, but it does not happen near enough and it is seldom discussed in the political arena in comparison to raising/lowering taxes or adding programs.
I am not a proponent of big government, but even if you are, I still think it is prudent to look at government programs in this fashion. Just because you believe big government is okay doesn't automatically mean that every program the government puts forth is good.
Plainly put, we need to see a heck of a lot more accountability from the government regarding how they spend our money. Having said this out loud, I think I will go back to the thread on quantum teleportation since that will likely be fully realized long before the government is actually accountable with our money. Posted by Vadon (Member # 4561) on :
quote:Originally posted by Mucus: Yikes. And I thought the 15,000 tax credit for homebuyers was wacky enough.
To be perfectly honest, I've got some high hopes riding on that one. My parents have been trying to sell their house since late spring of last year. It's been hurting badly as they no longer live in that house and now have to pay the mortgage on it and the rent on the one they live in now. As a whole? Yeah, wacky. But it could also save us a lot of grief.
Posted by TomDavidson (Member # 124) on :
The credit would only apply to new, first-time homebuyers in the year they bought their house. Is your parents' old home a good starter home?
Posted by Occasional (Member # 5860) on :
The idea of a starter home baffles me. Yes, I know people move. However, I guess I come from a culture where to move is done only as a necessity for job transfer or you really get that huge raise. When I think of buying a home (and I do own one) I think of permanence. You keep it until the above or you become senile or die.
Posted by fugu13 (Member # 2859) on :
Unless it has been changed yet again, you've got that wrong, Tom. The tax credit, last I saw the details, was for anyone (not just first-timers) buying any home (not just new ones) provided it becomes your primary residence and remains such for at least two years.
Some other details: unlike the other one, the tax credit is limited to the amount you pay in taxes (though you can split it over two years), so if you have low income, the tax credit becomes less useful. Of course, it also doesn't need to be paid back over time (unlike the current one).
My brother and sister-in-law bought a home last may, that was in the process of being remodeled, but not quite done. Over the summer, they finished up the work that needed to be done. They have plans on doing some more changes this coming summer. Her father is a general contractor, so they're getting the work done relatively cheap. And because of the market, and because of the un-finished work, they got the house for probably half or 40% of the price it would have got in 2007. How is the market going to rebound? I don't know. But they got the house for 330 (340?), and it wouldn't surprise me at all if in 3 years they could sell it for 800. So do they move? Or not? Its an interesting question for them, since they both work within 20 minutes of the house (in opposite directions), and its perfect for raising a family, which they plan on starting next summer. On the other hand, if they can move into a nice home AND get a huge nest egg coming back...
*shrug* We'll see what they do. If it were me I'd probably stay, but my sister-in-law isn't happy unless she's got a hammer in her hands. So she might want to move into another fix-er-upper when the kids hit pre-school.
Posted by Christine (Member # 8594) on :
I think any programs that they want to axe need to be cut BEFORE taxes are cut. I would also not consider it fiscally responsible to cut taxes until our national debt was paid off or at least on some kind of meaningful repayment schedule. If all that is set in place, then I don't have a problem with tax cuts.
However, I would be interested to know which government programs they feel need to go and which get to stay. From what I've seen over the past 8 years, the Republicans want to spend money just as much as the Democrats do -- just on different projects.
Posted by scifibum (Member # 7625) on :
quote:Originally posted by fugu13: Unless it has been changed yet again, you've got that wrong, Tom. The tax credit, last I saw the details, was for anyone (not just first-timers) buying any home (not just new ones) provided it becomes your primary residence and remains such for at least two years.
Some other details: unlike the other one, the tax credit is limited to the amount you pay in taxes (though you can split it over two years), so if you have low income, the tax credit becomes less useful. Of course, it also doesn't need to be paid back over time (unlike the current one).
It makes me wonder about finding someone in an identical model house (there are several within a quarter mile) and agreeing to trade houses. We'd each net a few thousand in tax credits after expenses.
Actually with depressed home values my new mortgage would have PMI so it's probably not worth it.
Posted by Xaposert (Member # 1612) on :
Hmmm... if we're headed in this direction, maybe we should go all the way. How about this alternative tax plan:
-No taxes. -Spend as much as we want on anything we want. -If anyone asks how we'll pay it back, just say that if we don't pass this plan, there will be an economic catastrophe.
Posted by Mucus (Member # 9735) on :
fugu13's recollection matches the one I was referring to anyways.
Vadon: I just think that its a bad idea overall. As in encouraging superficial trading of houses as scifibum hinted at and also it would seem to me that all it would do is bump up house prices by some fraction of the 15k at *great expense* without addressing the underlying dropping trend (Indeed, one can argue that after policies like interest-only loans on the private side and mortgage deductibility on the government side, that there has been enough interference and house prices *should* be allowed to drop significantly).
But its nothing personal. By all means, if a wacky policy goes through, you may as well make the best of it for your family. I know I would*.
Posted by Sterling (Member # 8096) on :
quote:Originally posted by Marlozhan: This is not to say that the government never cuts or streamlines programs, but it does not happen near enough and it is seldom discussed in the political arena in comparison to raising/lowering taxes or adding programs.
The problem is that the way most of our politicians work, we end up keeping subsidies that encourage destructive agricultural practices in play while cutting early childhood education. Or cutting toxic waste clean-up, while keeping planes the military doesn't want rolling off the assembly line in some Senator's back yard.
Much like the question "But do we have the right to judge" invariably raises at least a few people who are all too ready to pull the executioner's switch, there's always readiness to kill other people's funding, or ignore likely consequences to garner a sought voter demographic because they'll be out of office by the time those consequences come to pass.
"Where is the revenue going to come from" doesn't seem like an unreasonable question, and if the only answer forthcoming is "tax cuts!", I feel a strong urge to slap the respondent.
[ February 12, 2009, 05:46 AM: Message edited by: Sterling ]
Posted by Kwea (Member # 2199) on :
quote:Originally posted by Occasional: The idea of a starter home baffles me. Yes, I know people move. However, I guess I come from a culture where to move is done only as a necessity for job transfer or you really get that huge raise. When I think of buying a home (and I do own one) I think of permanence. You keep it until the above or you become senile or die.
It's not just that. People often can't truly afford to move into a house that will fit their needs in 10 years. A 2 bedroom/1 bathroom house is great...as long as you don't have a kid or three.
Buying a starter home allows people to gain equity rather than paying rent. It means that you have a home, and are building your credit up by paying a mortgage as well, making the NEXT loan you apply for more likely to be approved.
I am paying about $700 a month in rent, and after I leave I get nothing for it. I could buy a home these days (if I wasn't in school and working) and pay not much more than that....perhaps even less...and in 5 years I wouldn't be any worse off that if I had rented.
More than likely I'd be better off, and able to afford a better home, and would find a loan even easier.
Too many people try to buy a 2000sq/ft house for their first, then end up not being able to afford the payments, electric and other utilities for it. If they had downsized and bought a starter home, they would have been able to keep their homes, and later as their needs change they would be able to either sell that home or build on to it.
Posted by scholarette (Member # 11540) on :
In my market, the problem with helping first time home buyers is that cheaper homes are not where the inventory is. Cheap homes are still being purchased pretty quickly, it is the 2000 sq ft houses that a lot of first time buyers can't afford that are sitting there in the hundreds. Maybe this is not a national trend, but what you need to do is get people who can upgrade from the starter homes to do so. If my husband gets a job (big if), we would be able to afford a bigger home, but right now, we think staying at our current home is the better choice financially. I thought that the 4% interest rates for qualified buyers would actually be a great way to motivate people to buy at all levels.
Posted by fugu13 (Member # 2859) on :
Yeah, people who really want a home right now and have good credit will have no problem buying homes at great rates right away, in most areas of the country. Interest rates are spectacularly low, and prices are pretty low, too.
Posted by Bokonon (Member # 480) on :
Not low enough in the Boston metro area... Unless we want to add an additional car + insurance to our expenses.
-Bok
Posted by rivka (Member # 4859) on :
He said "most". I figured that was specifically to exclude areas like NYC, Boston, L.A., etc. Posted by Bokonon (Member # 480) on :
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