But first . . .
What else is so cheap and delicious? Think about it. And when they say, ‘Back to the salt mines,’ who are all these people working in the salt mines? And if it’s so awful down there, why aren’t they unionized?
And now . . .
YOUR TAX REFUND
If you have dependent children, you will soon be getting $400 from the IRS for each one (unless your wages are too low, in which case, you and your kids will just have to make do). In this same tax-refund vein, there now comes Form 8302. And while it’s not a form I have to fill out, you should take a minute to see whether it applies to you. Click here.
92% TAX CUT FOR THE AVERAGE JOE
Kirk Dolan: ‘I wasn’t going to write, but then you mentioned ‘tax cuts for the rich’ again. Am I the only one confused by your stance? Whether I agree or not, at least I understand your reasoning for not wanting tax cuts for people making > $80K. Fine. Let’s talk about the average guy, married, 2 dependent kids, making $40K/year. He will get a 92% tax cut, per an article I sent you from Time Magazine. Question: Do you support this 92% tax cut? If yes, then why have I never seen you write something like this: ‘Although I disagree with everything else Bush has proposed, I certainly support the 92% tax cut for the average Joe?’ If no, then what exactly do you support for Joe? 100% tax cut? No tax cut? Increased taxes?’
☞ Well, first, as I think I have written on more than one occasion, my problem is absolutely NOT with the tax cuts for the average Joe. Here, for example, my comment from May 6, 2002:
My heart leapt when I saw Tim Russert put the Kennedy “tax cut” chart up on his screen on yesterday’s ‘Meet the Press.’ This is exactly what American economic policy should be:
1. Fiscal responsibility – low interest rates – economic growth.
2. Protect Social Security and provide some funds for things like prescription drug assistance to the elderly.
3. How? By adopting this tax plan:
FIRST 80% of Americans (those with income up to $72,000 a year): KEEP 100% of the tax cut and make it permanent!
NEXT 15% (those of us with income from $72,000 to $147,000 a year): KEEP 99% of the tax cut and make it permanent. (Average annual ‘cost’ to this group in less than originally expected tax cuts: $17.)
Subtotal: for 95% of Americans, last year’s tax cuts would be 99% or 100% preserved and made permanent.
Since then, we have launched this costly war and slashed taxes on dividends and capital gains. That is the sacrifice those of us rich enough to have appreciable dividends and capital gains have been called upon to make.
We’re too old to fight in Iraq, most of us; but at least we get to do something.
Someone with, say, $10,000 a year in dividends (you, perhaps?), is called upon to keep an extra $2,460 in the effort to pump up the economy. Someone with $100,000 a year in dividends is called upon to keep an extra $24,600. (The new 15% rate vs. the old Clinton/Gore 39.6% rate.) You may not be able to heft a rifle and pack through scorching desert heat, but at least you can participate in this operation to create jobs (Operation No-Spinach, Just Dessert?).
And yes, someone with $100 a year in dividends, like the average Joe, gets the dividend tax cut, too, too! Depending on his tax bracket, he saves either $5 or $10. (If he is in the 10% or 15% bracket, his rate on dividends drops all the way to 5%.) So the average Joe is not forgotten.
[One last thing probably worth noting: If someone’s income tax bill goes down from $1,000 to $80 – a 92% cut – but his family’s share of the National Debt goes up by $5,000 (in large part because of the cost of massive tax cuts for people earning a hundred times more) and his family’s property taxes go up and their school has to double-up on English teachers and the dollar grows weaker . . . it may not be quite the sweet deal it was cracked up to be.]
‘If this is class warfare, then my class is winning.’
– Warren Buffett
Tomorrow: Foolish Calculators and Griping GIs