Toby Gottfried: ‘Here is a simple proposal which helps everyone in what I think is a fair way: raise the brackets. That is, leave the rates alone, but increase the income levels where they take effect. That lowers everybody’s taxes, helps the upper end more than the lower, but not unreasonably, and doesn’t change ‘pain thresholds’ much.’
☞ I like it. We’re too far along for this to be likely to happen, but I think it makes good sense.
Paul Glass: ‘Why give a bigger tax refund to those who don’t pay as much in taxes? Sounds more like a wealth redistribution scheme.’
☞ When the top bracket was 90% and dropped to 70% and then 50% and then 28%, the great mass of tax payers got little or no lowering of THEIR tax brackets. So now I’d suggest let’s give the average guy a break without necessarily giving the wealthiest few a huge break. Even after the tax hike to 39.6%, gains in after-tax income for the top 1% have way outstripped gains for the bottom 90% – in part because the capital gains rate was chopped from 28% to 20% in 1997. That was a huge tax cut for the wealthy without a commensurate break for everyone else. So now maybe it’s the average family’s turn.
Thorsten Kril: ‘So at which income would you set the cut-off for tax cuts? And on whose authority can you decide where the middle class ends and the rich starts?’
☞ Well, it’s arbitrary, just as now. (I do think most would agree that the top 2% is not ‘middle class.’) There are lots of ways to give even the top 1% a little relief without spending $688 billion to do it. For example, the extra $500 per child tax credit the President proposes would apply to rich as well as poor.
Robert Pomerenk: ‘You write that under Clinton, taxes were ONLY raised for those at the top. That is true. And recall the rationale: we had deficits “as far as the eye can see,” and taxing the rich was intended to right the boat. Now we find that we did the job only too well, and are facing surpluses as far as the eye can see. Do we now give back the excess to the rich that paid it? Of course not. Now that Washington has got the money, let’s dream up some new programs, or else give the lion’s share to ‘hard working’ low- and middle-income earners. (It’s funny how the rich are NEVER described as ‘hard working.’) Either our government was duplicitous in using deficits as merely an argument to re-distribute wealth from the rich to the non-rich, or government simply overshot the mark and gouged the rich more than needed. If the latter, it’s a simple matter to give a portion of it back. But I will not hold my breath.’
☞ Maybe we should wait until we’ve paid off the $5 trillion debt, most of it racked up when Reagan cut the top rate from 70% to 28%. Maybe he overshot a little?
(As for the hard-working rich, scrubbing floors, working the assembly line, the only quibble I’d raise is that their hard work is voluntary, which sometimes makes it more fun.)
James Schaefer: ‘I’m very surprised to see you replaying Senator Tom Daschle’s comments with out putting the numbers to the test. I don’t think I could better explain the misleading comments of Mr. Daschle better than Scott Burns . . .’
☞ Scott Burns rightly points out that the Bush-plan tax-savings to someone earning $300,000 wouldn’t equal a new Lexus each year. (I told you guys to buy used cars.) But the confusion may be this. The minimum income in the top 1% is something like $319,000 (I am doing these numbers from memory), and, no, that poor guy does not get a Lexus. But the average income of the folks in the top 1% is more like $900,000, on which the tax savings would be an annual Lexus. Even then, if $900,000 is the average and not the median, fewer than half the one-percenters would get a new Lexus each year; many would get a Mustang or a Sebring, some would have to settle for a ’96 Saturn. But the larger point I think is quite fair, even if Senator Daschle may not have been clear in his statement.
It’s the same sort of error President Bush makes when he says that the average family would save $1,600 under his plan. ‘This claim is misleading,’ reports Citizens for Tax Justice, because it is based on the average income, not the median. Almost 90% of taxpayers would receive less than $1,600 — and 27% would receive no tax cut at all.
And what if a huge tax cut unsettles the bond markets even a little, and interest rates wind up a bit higher than they otherwise would have been? If your home mortgage and car loan cost an extra 1%, might that not wipe out much of your tax relief? This is not a problem for the top 1%. They tend to do more lending than borrowing.
Tom Wilder: ‘You Democrats astound me. Of course the tax reduction is more for those in the highest bracket in dollars. They pay far more in dollars than the rest! What about in percentage? Have you even considered this aspect? My calculations show that a cut from 15% to 10% is a 33% reduction and a cut from 39.6% to 33% is a 16.67% reduction. (From this you could argue the tax cut is twice as large for taxpayers in the lowest bracket.) You never seem to address this point. (Maybe it does not fit the Democratic party chorus of drivel?)’
Ted Niblett: ‘Dude! Your logic is turning me into a liberal! My fiancée loves this trend; I’m a touch horrified. Keep it up!’
☞ Beats clickles any day. (Especially being called ‘dude.’)
Quote of the Day
There is nothing like higher prices to attract more buyers. In department stores you mark merchandise down to move it. On Wall Street you mark it up.~Michael Metz, Oppenheimer
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