Wednesday, December 8

Liberals Have No Right To Demand That Others Pay More In Taxes Than They Do

It seems that Liberals are all up in arms about the President agreeing not to raise taxes on all Americans. This goes against the Liberal/Democrat demands that taxes be raised for the richest Americans.

First, one argument that Liberal Democrats were making, and something that Congressman Pelosi was using as an argument to raise taxes, was that all Americans were still going to get a tax cut, up to a certain point. In other works that the richest paid the same taxes as those earning less than them for that same portion of earnings, i.e. under $250,000 for couples. This however is disingenuous and the Democrat's first lie, because not all of the tax breaks are extended to Americans that exceed a certain income level. One of those tax breaks that cuts out is the child tax credit.
Credit worth as much as $1,000 per child

If you have children who are under age 17 at of the end of 2009, you can get a $1,000 tax credit per child on your tax return. A tax credit reduces your tax bill dollar-for-dollar, so three qualifying children, for example, can cut what you owe Uncle Sam by $3,000. The credit may be limited if your income exceeds the levels listed below.

And the credit does not affect the exemptions you take for dependents—worth $3,650 each in 2009. The child tax credit is in addition to those exemptions.

Credit is phased out at higher income levels

The child tax credit is reduced or eliminated if your adjusted gross income is above certain thresholds. The credit amount is reduced by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income (AGI) exceeds the threshold amount.

The threshold is:

  • $110,000 on a joint return
  • $75,000 for an unmarried individual
  • $55,000 for a married individual filing a separate return
- TurboTax
The argument for higher taxes for the rich made by Liberals also ignores a simple fact that the tax system is progressive and those that earn more pay a higher percentage of tax on their higher earnings with or without keeping the current tax rates. Click on the images below that cover both the current rates (10%, 15%, 25%, 28%, 33% and 35%) and the previous rates (10%, 15%, 27%, 30%, 35% and 38%) and in each case, the rich always pay a higher percentage in tax on their higher earnings. (Tables found here)

Liberals are also complaining that the announced tax deal by the President is unfair in that it extends the tax break for two years but only extends unemployment for 13 months is another weak argument. Simply put, unemployment payment is supposed to be temporary aid in order to help people find replacement work. It is crazy to extend such payments for years. This has the ability to distort behavior against taking other work, especially if the new work does not pay as well as the old job did. Unemployed were never entitled to unlimited unemployment benefits. To offer up another year is doing little more than creating a class of permanently unemployable 'workers'. This needs to stop.

The argument made by Liberals is distorting the actual cost of extending the current tax rates. they are using the cost to extend the current tax rates for the next ten years. Comparatively speaking, this amount is much smaller than any one year deficit during the Obama Administration. It is also about the same cost as the failure known as the 'Stimulus Bill'. As I wrote before:
As for the number that the President is commenting on there above, while being large, they pall in comparison to the actual deficit total. As for the $700 billion cost the President mentions, that is the cost to extend the tax cuts for the rich for the next ten years. In comparison, 'The total deficit for fiscal year 2009 was $1.42 trillion'. - Link
The argument made by the Liberals also ignores that the richest Americans already pay the majority of taxes. the lower half pay next to nothing. Take a look at the graphic below. The bottom half of the population is paying no Federal income taxes. How is that fair? Everyone should contribute. Many do not and this is distorting rational decision making as they are only looking at the Federal Government in terms of handouts. So it then becomes in their best interest to ensure that the richest are taxed as much as possible. It also perverts the perpetration of fraud among benefit recipients who, instead of reporting fraud, instead also look to benefit by replicating the crime, since it does not cost them anything.

The Democrats in Congress are talking about extending the Tax Cut for the middle class, because the poor don't pay anything. They are also ignoring the real problem which is spending. The Government is addicted to spending. As with any addition, the cure is never more, in this case money, but less. (and do not forget the other problem which is simple waste...)

OK, I got the additional unemployment time wrong:
Just wanted to point out that the unemployment benefits extension doesn't give the 99ers another 13 months. The 99ers are still done after 99 weeks. This new bill just covers those behind the 99ers who are about to lose benefits.

I won't denigrate these people. I will say that people who can't find work for two years should perhaps move to where the opportunities are. - Lou Minatti
As for that last comment about moving, I have written about that before. It is hard to find work when the jobs have moved from your part of the country. Yes, some are moving overseas but many are just moving to cheaper parts of the country. There are lots of jobs here. Just ask all the illegal aliens doing them. See my posts ""The economy will recover faster if workers are willing to seek out and seize distant opportunities"", "Don't Redistribute wealth. Redistribute the poor" and "Don't Redistribute the Wealth - Redistribute the Work!" for more on that.
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Scoremore said...

If the concern is that a lot of the wealthy may cut or prevent job hires then why not provide a tax incentive for the business they are in charge of rather than boost their income? How many of those making 250K+ are directly responsible for hiring employees? I’d guess (I know I shouldn’t) that some proportion of these wealthy either inherited it, or or are responsible for a minimum (and not negotiable) number of jobs like doctors, lawyers, actors and sports players (the latter of course to a possibly negligible degree. It seems like a crude way to ensure job growth to just give them all tax reductions. I know there are already business incentives but proposing more to compromise would be much more helpful than flat out giving money to the wealthy. Of course there’s nothing wrong w/ giving money to anyone, except when there are people trying to make ends meet, with no purchasing power on their own to afford necessities like food and health care, which are by the way much more efficient for productivity than luxury cars and 4-star dinners. Something’s off here. Is it just that democrats are completely inept at explaining things or am I not understanding the message?

rashid1891 said...

As for the number that the President is commenting on there above, while being large, they pall in comparison to the actual deficit total. As for the $700 billion cost the President mentions, that is the cost to extend the tax cuts for the rich for the next ten years. In comparison,