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RNC circulates study that shows Dem tax plan is better for poor than GOP one

Okay, this is a bit in the weeds. But it's worth it.

This morning the Republican National Committee blasted out a story from The Hill about a new nonpartisan study finding that the poor will be hit hardest if all the Bush tax cuts are allowed to expire. An RNC spokesman, taking a shot at the Dems' failure to extend the tax cuts, rhetorically asked: "What excuse will the Democrats use now?"

Here's the funny thing, though. While that study does indeed find that letting all the tax cuts expire does disproportionately hurt the poor, it also finds that the plan Dems have actually proposed on the Bush tax cuts is better for the poor than the Republican one.

The study, by the nonpartisan Tax Foundation, took a look at how letting the tax cuts expire impacts the after-tax income of people at different income levels. The study's numbers show that letting them all expire would hurt the poor more, because the change in income would matter a lot more to them.

But using this study to attack Dems is misleading. Republicans are framing the current policy dilemma as a choice between keeping all the tax cuts or letting them all expire. But Dems aren't proposing to let all the tax cuts expire. Rather, they would continue the tax cuts for those under $250,000, while letting only the high end ones expire. The Congressional Dem plan would also renew some temporary stimulus tax-break measures enacted last year that are set to lapse.

As it happens, the study compared the actual Dem plan with the GOP one. And it found that for a family of four with an income of $40,000, the Dem plan -- continuing the low end tax cuts, plus the stimulus measures -- would cause a 7.8 percent jump in after-tax income. That jump would only be 6.8 percent under the GOP plan to continue all the Bush tax cuts.

For a single parent with two kids and an income of $20,000, that difference is even more pronounced. The jump is 8 percent under the Dem plan, and only 4.4 percent under the GOP one.

In fairness to the RNC, the study is good for the GOP in one sense. It confirms that the Bush tax cuts were helpful to the poor, despite popular belief that they only helped the rich. But the author of the study, Nick Kasprak, confirms that this finding isn't directly relevant to what Dems have proposed.

"Our study shows that the Bush tax cuts helped the poor a lot more than the popular perception, so the RNC is right to send it around for that reason," Kasprak tells me. "But the study also shows that the Congressional Democrats' plan is more generous to the poor, because it extends certain stimulus provisions into 2011, which the Republican plan does not. That isn't what the RNC wants to show."

By Greg Sargent  | October 7, 2010; 1:00 PM ET
Categories:  House Dems, House GOPers, Senate Dems, Senate Republicans, economy  
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Next: Is the "hicky" actor in GOP ad a non-story?

Comments

Democrats better at looking after the poor, than Republican are! There's a shocker for you!

Eric Cantor recently said that the reason why he is the only Republican Jewish member in the House, while there are around forty Jewish Democrats in the House is:

"Because the Jewish people like to support the underdogs"

Think about that folks. What Eric Cantor just admitted is that the Republican Party only supports The Over Dogs.

Replace the Republican Elephant Icon, with one of a Very Fat Cat.

Posted by: Liam-still | October 7, 2010 1:10 PM | Report abuse

Why should the American people believe that the Democrats favor extending the Bush tax cuts for income under $250,000 when the Democrats refused to hold a vote on that legislation?

Posted by: QuiteAlarmed | October 7, 2010 1:12 PM | Report abuse

Liam, the funny part is that it was circulated by the RNC.

Posted by: Greg Sargent | October 7, 2010 1:15 PM | Report abuse

here's an example of the problems we run into when the government tries to use the tax code for social engineering. this is from the report that Mr Sargent mentions.

"The EITC is probably one of the most complicated provisions of the tax code due to its "plateau" shape. The value of the credit rises as wage income increases until it reaches an amount at which a larger dollar amount of assistance is deemed unnecessar—this is the edge of the plateau. For several thousands of dollars of additional wage income, the credit is constant. When the worker reaches an income level at which the maximum credit is considered unnecessary, he has reached the far end of the plateau, and the credit starts to decline. When wage income increases beyond another threshold, the credit falls to zero. The exact shape of this plateau depends on both filing status and the number of dependents on the return."

so the incremental dollar improvement in income is completely offset by a loss of the EITC. so either one must find a way to boost income in one swell foop from EITC eligible to income PLUS EITC or one must remain at a level of income that retains the EITC.

How, exactly, does this promote hard work and personal improvement?

Posted by: skipsailing28 | October 7, 2010 1:16 PM | Report abuse

"But Dems aren't proposing to let all the tax cuts expire."

Maybe that's not what they are proposing, but that's what they are doing! They haven't introduced any bill to extend any rates.

Posted by: sbj3 | October 7, 2010 1:18 PM | Report abuse

Republicans are a sad joke on America.

Just look at the FACTS.

The numbers bear it out.

Posted by: Ethan2010 | October 7, 2010 1:19 PM | Report abuse

OT, but two of your points from this morning converged in my mind.

Are we (and the voters in PA) really supposed to believe that Pat Toomey is not opposed to the minimum wage?

http://www.progressiveblue.com/diary/5695/does-pat-toomey-expect-pennsylvania-to-believe-he-supports-the-minimum-wage-pasen

Posted by: michael_conrad | October 7, 2010 1:19 PM | Report abuse

I don't believe all this talk about tax brackets means ANYTHING to the public at large.

People who want to engage in a partisan fight - they are just picking up on this talk as another line in their partisan talk - however most of the people really have little idea what they are talking about when it comes to the actual issues.


I like this one: In fairness to the RNC, the study is good for the GOP in one sense. It confirms that the Bush tax cuts were helpful to the poor, despite popular belief that they only helped the rich.


You aren't going to hear that - from democrats OR Republicans.


Which proves my point - the real story behind all this tax talk really ends up far behind all the partisan attacks.


________________________


I'm just going to repeat: ECONOMIC GROWTH is the most important policy goal -

The reason is that whatever the one-year impact of ANY policy is - multiply that by 10 and you will have what the 10-year impact will be -

ASK yourself if you are willing to pay THAT amount economy-wide - in exchange for the policy goal at issue. Almost ALWAYS everyone will say, no, it's not worth that price.


ECONOMIC GROWTH brings in MORE JOBS - and MORE tax revenue - more than anything else.


Democrats WILL realize that THEY ACHIEVE MORE OF THEIR OBJECTIVES THROUGH GROWTH than through ANY policy which puts a DRAG on the economy.


Think about it.


.

Posted by: SaveTheRainforest | October 7, 2010 1:22 PM | Report abuse

Liam, the funny part is that it was circulated by the RNC.

Posted by: Greg Sargent | October 7, 2010 1:15 PM

..............

Of course they also would like to get rid of social security, and make people pay huge deductibles, each time they use Medicare. Paul Ryan wants to add a VAT tax on top of the existing local sales taxes.

The Republicans Mission Statement:

Socialism For The Wealthy, And Social Darwinism For The Poor.

Posted by: Liam-still | October 7, 2010 1:25 PM | Report abuse

SaveTheRainforest:

They think that just GIVING $1 million to each "poor" person would be better too (regardless of what that would do to the U.S. Treasury, economy at large, or even the "poor" person himself ; )

Give a man a fish and you feed him for a day -- teach a man to fish and you feed him for a lifetime.

Posted by: JakeD2 | October 7, 2010 1:27 PM | Report abuse

sbj, come on. Dems shelved the bill because Republicans said they would filibuster it. This whole thing about whether Dems did or didn't push an actual bill is irrelevant.

Posted by: Greg Sargent | October 7, 2010 1:28 PM | Report abuse

"the funny part is that it was circulated by the RNC."

I tell ya. The GOP owes its existence right now to two outside special interest groups. American Crossroads/GPS and U.S. Chamber of Commerce.

Clearly the RNC is a total joke.

The Republican Party would be dead in the water if it wasn't for heavy amounts of outside corporate spending in this cycle. They are lucky for the timing of Citizens United.

Posted by: Ethan2010 | October 7, 2010 1:30 PM | Report abuse

skipsailing28 at 1:16 PM

You have an excellent set of points there.

And one point you made - add to that the differences in filing status - two incomes, one income and number of dependents -

With ALL those variables, no one knows where they stand - in order to form any conclusions about what they think is better, or best.


ADD to that, the social security taxes which are on the TOP of the tax rates - and NO ONE knows how the Federal income taxes go up and down with income.

The Earned Income Tax Credit - going up and down in the bottom half of filers - that complicates everything further.

Federal Income Taxes are progressive - and they ACTUALLY ONLY APPLY to the top HALF of filers.

The bottom half pays zero - and they will continue to pay zero.

So what we are really talking about with ANY DISCUSSION is the 90-99 percentile of filers VS. the 50-59 percentile of filers.

IF you can get two people to actually get on the SAME PAGE with that nuance - THEN you can have a discussion.


(The democrats start talking about the "poor" and what they are really talking about is someone already in the UPPER HALF OF INCOME - in the 50-59 percentile of income)


Good Luck guys


These discussions are WAY OFF on getting it right on actually talking about what the reality is.


.

Posted by: SaveTheRainforest | October 7, 2010 1:32 PM | Report abuse

@Greg: "Dems shelved the bill because Republicans said they would filibuster it."

And the GOP had plenty of Dem support - you forgot to mention that bit.

And *you* were the one shouting for the Dems to hold the damn vote!

"This whole thing about whether Dems did or didn't push an actual bill is irrelevant."

Ha! Hardly. The people elected the Dems to govern and they aren't doing a good job. They scurried home to their districts scared to follow through on their convictions, preferring instead to concede defeat in a lame duck session.

That, Greg - the ability to govern - is *extremely* relevant to voters.

Posted by: sbj3 | October 7, 2010 1:40 PM | Report abuse

"The people elected the Dems to govern and they aren't doing a good job"

They're doing a GREAT job.

The Republicans are the ones who have made Congress the laughingstock it currently is.

Actually, SBJ, to correct you, the people elected DEMS AND REPUBLICANS to govern.

See?

Republicans were also elected to govern. They are not paid your and my tax dollars to be potted plants.

Posted by: Ethan2010 | October 7, 2010 1:45 PM | Report abuse

OT, JOBS JOBS JOBS:

* Jobless claims hit 3-month low as soft patch fades *

New U.S. claims for jobless benefits hit a near three-month low last week, suggesting some let up in the labor market's distress but likely not enough to keep the Federal Reserve from easing monetary policy further.

Initial claims for state unemployment benefits dropped 11,000 to 445,000, the lowest since the July 10 week, the Labor Department said on Thursday. Financial markets had expected claims to edge up to 455,000.

"The fact that claims are coming down in such a way suggests the labor market has a firmer underpinning than we may know," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. Still, he added: "It would not hurt if the Fed put another log on the fire."

Sales at U.S. retail chains last month also showed unexpected strength. U.S. same-store sales rose 2.8 percent, according to Thomson Reuters data which tracks 28 top chains, beating analysts' estimates for a 2.1 percent increase.

Sales, which rose for the 13th straight month, were boosted by back-to-school buying.

http://www.talkingpointsmemo.com/news/2010/10/jobless_claims_hit_3-month_low_as_soft_patch_fades.php

Jobs.

Consumer spending.

Both up and headed in the right direction.

Thank you Democratic Party and President Obama!

Posted by: Ethan2010 | October 7, 2010 1:47 PM | Report abuse

OT:

RE: "Hicky" Ad

"The GOP group blames the casting call on an outside producer."

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100703009.html

They OUTSOURCED the ad -- how appropriate? -- and either didn't watch it a single time before it aired or they thought that attempting to deceive WV voters with a fraudulent ad was perfectly a-okay.

It's so funny in some ways and really sad and despicable in others.

Posted by: Ethan2010 | October 7, 2010 1:59 PM | Report abuse

OT, JOBS JOBS JOBS

Is the Obama Administration LYING about the unemployment rate prior to the midterm elections?

http://www.gallup.com/poll/143426/Gallup-Finds-Unemployment-September.aspx

Posted by: JakeD2 | October 7, 2010 2:01 PM | Report abuse

@Ethan2010: "I tell ya. The GOP owes its existence right now to two outside special interest groups. American Crossroads/GPS and U.S. Chamber of Commerce."

The GOP owes its continued electoral viability to the Democratic party. Don't forget that.

Posted by: Kevin_Willis | October 7, 2010 2:02 PM | Report abuse

OT, Friday's Unemployment Rate Report Likely to Understate

The government's final unemployment report before the midterm elections is based on job market conditions around mid-September. Gallup's modeling of the unemployment rate is consistent with Tuesday's ADP report of a decline of 39,000 private-sector jobs, and indicates that the government's national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup's mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

However, Gallup's monitoring of job market conditions suggests that there was a sharp increase in the unemployment rate during the last couple of weeks of September. It could be that the anticipated slowdown of the overall economy has potential employers even more cautious about hiring.

...

Further, Gallup's underemployment measure suggests that the percentage of workers employed part time but looking for full-time work is declining as the unemployment rate increases. To some degree, this may reflect a reduced company demand for new part-time employees. For example, employers may be converting some existing part-time workers to full time when they are needed as replacements, but may not in turn be hiring replacement part-time workers. Another explanation may relate to the shrinkage of the workforce, as some employees who have taken part-time work in hopes of getting full-time jobs get discouraged and drop out of the workforce completely -- going back to school to enhance their education, for example, instead of doing part-time work. It is even possible that some workers may find unemployment insurance a better alternative than part-time work with little prospect of going full time.

Regardless, the sharp increase in the unemployment rate during late September does not bode well for the economy during the fourth quarter, or for holiday sales. In this regard, it is essential that the Federal Reserve and other policymakers not be misled by Friday's jobs numbers. The jobs picture could be deteriorating more rapidly than the government's job release suggests.

Posted by: JakeD2 | October 7, 2010 2:04 PM | Report abuse

"The GOP owes its continued electoral viability to the Democratic party. Don't forget that."

Um, no it certainly does not.

It owes its electoral viability to the fact that outside groups have been perpetuating misinformation through huge Big Money PR campaigns.

Koch
Chamber of Commerce
Fox News
American Crossroads/GPS

I would say you were right if the Republican Tea Party complaints actually matched up with, ya know, REALITY. For example, HCR was not a government takeover of the health care system. Yet that is repeated endlessly on the fringe email lists. I have tons of evidence of this, btw, because I'm on the lists.

No, Kevin.

It's fraud and the only way it is even remotely possible is with MASSIVE Big Money propaganda campaigns.

Posted by: Ethan2010 | October 7, 2010 2:10 PM | Report abuse

"RE: "Hicky" Ad

"The GOP group blames the casting call on an outside producer."

Being a Republican means never having to say you're sorry. About anything. It is ALWAYS someone else's fault. In a pinch just yell:

GEORGE SOROS!!!

Posted by: wbgonne | October 7, 2010 2:10 PM | Report abuse

22 Million Jobs added during the Clinton years.

8 Million Jobs lost during the Bush/Cheney years.

Annual budget surplus developed during the Clinton Years.

National debt quadrupled during the Bush/Cheney years.

McConnell and Boehner delivered the legislation that destroyed our economy, and wiped out the middle class.

We report, you decide if you would really like to reset to the Bush era!

Posted by: Liam-still | October 7, 2010 2:15 PM | Report abuse

O/T:

The new darling of the Conservtive Chris Christie strikes again:

"Tunnel Of Idiocy: Many reports that Chris Christie is about to scuttle the second rail tunnel under the Hudson. If so, it’s arguably the worst policy decision ever made by the government of New Jersey — and that’s saying a lot. The story seems to be that Christie wants to divert the funds to road and bridge repair; but in so doing he would (a) lose huge matching funds from the Port Authority and the Feds (b) delay indefinitely a project NJ needs desperately ASAP. He could avoid these consequences by raising gasoline taxes. But no, taxes must never be raised, no matter what the tradeoffs. And it’s a social bad too: now is very much the time when we should be ramping up infrastructure spending, not cutting it."

http://krugman.blogs.nytimes.com/2010/10/07/tunnel-of-idiocy/

The way Christie keeps squandering federal funds NJ will be broke before his first term ends. Maybe he'll build another highway instead cause that's just what NJ needs: more cars on the road.

Posted by: wbgonne | October 7, 2010 2:18 PM | Report abuse

Not to interrupt with good news or anything, but the White House is going to pocket veto the bill that would have legalized all the illegal things lenders have been doing to foreclose. The Senate passed a version of it yesterday without a vote, but the President had the guts to say no. He should get out there on the campaign trail about this one. One more reason to gut the Senate of it's old men when they run for re-elction!

Posted by: 54465446 | October 7, 2010 2:21 PM | Report abuse

Lies, Lies, Lies


Last spring, there was a substantial discussion about the amount of oil spilling from the BP well - NOW it comes out that the White House itself was hiding the upper limits of the range of the spill.


NOW TODAY Gallup says that unemployment is ACTUALLY OVER 10%


AND the white house is LYING ABOUT THE RATE.


Obama - TRANSPARENCY TRANSPARENCY TRANSPARENCY

Have we EVER had an administration that lies so easily - for PARTISAN GAIN ???


This is a NATIONAL DISGRACE


Do you think there is a RACIAL MOTIVATION-

That somehow Obama thinks it is OK to lie to white people???


Do you think that's it ???

.

Posted by: SaveTheRainforest | October 7, 2010 2:23 PM | Report abuse


"RE: "Hicky" Ad

"The GOP group blames the casting call on an outside producer."

Being a Republican means never having to say you're sorry. About anything. It is ALWAYS someone else's fault. In a pinch just yell:

GEORGE SOROS!!!

Posted by: wbgonne | October 7, 2010 2:10 PM

..................

Perhaps they used Meg Whitman's employment agency, and they should be blamed for that too.

Or perhaps Right Wing Hypocrites should just start using the old Flip Wilson, Geraldine character, excuse: "The devil made me do it". Come to think of it, that is a line that Christine O'Donnell should start using.

Posted by: Liam-still | October 7, 2010 2:23 PM | Report abuse

Forest Creature:

IT IS A NATIONAL DISGRACE,

"In Your Pants!!!"

Posted by: Liam-still | October 7, 2010 2:26 PM | Report abuse

"Not to interrupt with good news or anything, but the White House is going to pocket veto the bill that would have legalized all the illegal things lenders have been doing to foreclose."

That's AWESOME.

Thanks.

RE: Chris Christie, NJ is in serious serious need of more/better mass transit. So is NYC for that matter.

Posted by: Ethan2010 | October 7, 2010 2:31 PM | Report abuse

Here's my point. Let's assume for the sake of discussion that a person makes 10,000 a year and is on the EITC "Plateau". therefore they avoid oh say 2500 in taxes.

so there income net of taxes is 10,000.

If the edge of that plateau is 10,000 and the employer offers a 5% raise, the employee is actually better off refusing it. Why? Well a 5% raise amounts to 500. BUT, and this is a big BUT, the employee now must pay taxes! Sooo their new net income is 7875 (10500 *.75)!!

This isn't a raise at all, it is a punishment for trying to improve. And that's the hallmark of so many of these liberal schemes: punishing success.

I will grant this is a simplified example, but I'm certain that this is exactly what is going on. We create a disincentive for improvement because the tax payer funded transfer payment support disappears as people progress through their work careers. A small raise, something most folks would welcome, is really a financial disaster for folks at the edge of the EITC plateau.

Posted by: skipsailing28 | October 7, 2010 2:34 PM | Report abuse

sbj, come on. Dems shelved the bill because Republicans said they would filibuster it. This whole thing about whether Dems did or didn't push an actual bill is irrelevant.

Posted by: Greg Sargent
____________________________

It is totally relevant. Dems are in charge, but apparently to gutless to do their jobs and vote. It's a sad sad comment on the political party you are supporting here that they won't even try. And how good of an election year tactic would that have been, to be able to say that the Repubs ACTUALLY voted against tax cuts. So the R's said they would vote no. Did they? Who is really responsible for not voting on the bill?

Posted by: Bailers | October 7, 2010 2:38 PM | Report abuse

In whose version of reality, skip, is either $10,000 or $10,500 of annual income "success?"

You do realize that even minimum wage is more than that, right? Oh, that's right, the right has no idea what the minimum wage is and thinks, in any event, it should be reduced or eliminated.

Posted by: pragmaticstill | October 7, 2010 2:38 PM | Report abuse

Liam - SwampCreature

You are so sweet - is there any way you can actually explain what you are trying to say?

At this point, no one knows what you are saying.


.

Posted by: SaveTheRainforest | October 7, 2010 2:43 PM | Report abuse

Re: Christie

All of his braindead conservative cheerleaders will no doubt applaud this. Replace the word "budget" in "budget deficit" with "investment" and they couldn't care less.

Maybe Christie is part of that Chinese plot Agent O'Donnell was told about. (snark)

Posted by: michael_conrad | October 7, 2010 2:44 PM | Report abuse

Lies Lies Lies

In documents released Wednesday, the national oil spill commission reveals that in late April or early May the White House budget office denied a request from the National Oceanic and Atmospheric Administration to make public the worst-case discharge from the blown-out well.

BP estimated the worse scenario to be a leak of 2.5 million gallons per day. The government, meanwhile, was telling the public the well was releasing 210,000 gallons per day - a figure that later grew closer to BP's figure.


_______________________________

Can ANYONE trust Obama anymore ???


.

Posted by: SaveTheRainforest | October 7, 2010 2:45 PM | Report abuse

Talking about keeping the poor workers annual compensation below 10K so they would not have to pay taxes, reminded me of the following.

The Republican candidate for Governor of Illinois, Bill Brady, is a millionaire, and he has been paid an annual salary of $76K, as a member of the state legislature.

It turns out that Millionare Brady has managed to figure out how to not have to pay any Federal taxes for the past two years.

Posted by: Liam-still | October 7, 2010 2:47 PM | Report abuse

All, my take on why this "hicky" ad tale may be a non story:

http://voices.washingtonpost.com/plum-line/2010/10/is_the_hicky_gop_ad_a_non-stor.html

Posted by: Greg Sargent | October 7, 2010 2:48 PM | Report abuse

thank you for demonstrating an inability to engage in discussion pragmaticstill. It speaks volumes about you.

I can conclude that you are simply not interested in seeking greater understanding.

As I noted last week for true believers all that matters is that their dogma explain everything. Real life experiences just don't matter.

Simply put, whether the plateau edge is 10 or 30K my point remains, falling off the plateau is a killer for folks living on the EITC.

I'm not surprised that you dont' get that.

Posted by: skipsailing28 | October 7, 2010 2:48 PM | Report abuse

skipsailing28 at 2:34 PM


You are 100% correct - and I don't think the liberals ever want to have a discussion involving the actual facts.


One half of taxpayers do NOT pay Federal income taxes.


THAT means that the tax rate discussions ONLY apply to the top half - what parts of the top half pay which rate. What is the rate for the 90-99 percentile - the 60-69 percentile all the way to 50-59 percential of income.


From the 1 - 50 percentile - the Earned INCOME TAX CREDIT applies - which means people get the credit ON TOP OF THE DEDUCTIONS.


This is NOT a discussion about "rich" and "poor" anymore.

.


Posted by: SaveTheRainforest | October 7, 2010 2:53 PM | Report abuse

Well this Republican Millionaire candidate for Governor made sure that he has not payed Federal Taxes.

The Republican candidate for Governor of Illinois, Bill Brady, is a millionaire, and he has been paid an annual salary of $76K, as a member of the state legislature.

It turns out that Millionaire Brady has managed to figure out how to not have to pay any Federal taxes for the past two years.


Posted by: Liam-still | October 7, 2010 2:56 PM | Report abuse

You gotta love rightwingnut whiners. There's a reason Ruben Bolling's Lucky Ducky comic strips are so funny -- they're a 100 percent accurate representation of selfish rightwingnut thinking.

Posted by: Observer691 | October 7, 2010 2:58 PM | Report abuse

54465446

Thanks for alerting me to the President's veto. Did you hear what Leahy had to say after being one of the guys to get it through the Senate? Looks like he's had second thoughts as well.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Sen. Patrick Leahy (D-Vt.), chairman of the Judiciary Committee, moved the legislation through the Senate without debate on Sept. 27.

“Senator Leahy understands the President’s decision not to sign the Interstate Recognition of Notarizations Act, and he supports that decision,” said a Leahy spokeswoman in a statement. “When Congress passed the legislation, no concerns or objections had been expressed. Now that concerns have been raised, Congress should reexamine whether this bill might have an unintended impact on foreclosures in the future. We certainly do not believe that is what Representative Aderholt and the other cosponsors of the legislation intended.”

Posted by: lmsinca | October 7, 2010 2:59 PM | Report abuse

The earned income tax credit phases in over various levels of income, skip. There is no plateau and there is no cliff. It is graduated over various income levela up to a maximum amount. To learn more, visit http://www.irs.gov/individuals/article/0,,id=150513,00.html

Posted by: pragmaticstill | October 7, 2010 3:02 PM | Report abuse

"Sooo their new net income is 7875 (10500 *.75)!!"

I'm not sure how you calculated this.

I've run your numbers through two separate calculators using income of 10k vs 10.5k and filing single with no deductions and/or dependents. The salary of 10k resulted in an EIC of 261 and a total refund of 595, while the salary of 10.5k resulted in a EIC of 223 and a total refund of 507.

So, a person making 10k would end up with total take home of 10,595 while someone making 10.5k would end up with a total take home of 11,007.

Now why exactly should they turn down the 5% raise? Or did I misunderstand your point?

Posted by: schrodingerscat | October 7, 2010 3:02 PM | Report abuse

my goodness the hits just keep on coming.

Now liam-still, one of the least open minded of the commenters here is joining the undies in a wad squad because a "millionaire" didn't do his "patriotic" duty and send a significant portion of his hard earned income off the DC so that liam-still's friends in the bureaucracy can give it away.

How silly. Face it liam-still the tax rules are complex and people who have the wherewithall to do so will play the rules to win. And winning is minimizing their own personal tax liability.

If you don't like this system (I don't) then help implement a flat tax that keeps the government's bite out of the economy about the same while simplifying the rules for us all.

if you think Americans are undertaxed then why not send a "contribution" to the IRS of your own free will? Hey, I have an idea, why not PAY my taxes too?

I eagerly anticipate the childish rants and name calling that my comment will engender. Remember the old adage "Better to be thought a fool than to open your mouth and removing all doubt"?

Come on Liam-still, sustain your reputation for nastiness by removing all doubt yet again. Hurry up, the week is almost over.

Posted by: skipsailing28 | October 7, 2010 3:04 PM | Report abuse

You didn't misunderstand s cat, skip just had no point.

Posted by: pragmaticstill | October 7, 2010 3:06 PM | Report abuse

Face it liam-still the tax rules are complex and people who have the wherewithall to do so will play the rules to win. And winning is minimizing their own personal tax liability.
-----------------------------
Why do I detect that it is entirely reasonable for wealthy people to game the system, but not for poor people? Poor people are supposed to pay, whether they can pay or not. NO GAMES.

Posted by: 12BarBlues | October 7, 2010 3:10 PM | Report abuse

Skipsailing

You have some excellent points

The liberals don't get it - however I will try one more time


There are essentially TWO tax codes - one for the top half and one for the bottom half.


The bottom half either pays ZERO or can get an Earned Income Tax Credit (check in the mail from Obama)


The top half is where ALL the brackets fall into play (the bottom half doesnt worry about the brackets because the deductions and all means they pay ZERO)

So all the talk about BRACKETS is all WITHING THE TOP HALF.


If someone doesn't understand that simple over-view of the tax structure - there really is no point to having ANY discussion - because they really are not realizing what portions of the taxpayers they are talking about.


The "bottom" effective tax rate really applies to those in the MIDDLE - those in the 50th to 59th percentile of taxpayers.

If someone "gets" that - then you can have a discussion.

Posted by: SaveTheRainforest | October 7, 2010 3:11 PM | Report abuse

Face it liam-still the tax rules are complex and people who have the wherewithall to do so will play the rules to win. And winning is minimizing their own personal tax liability.
-----------------------------
Why do I detect that it is entirely reasonable for wealthy people to game the system, but not for poor people? Poor people are supposed to pay, whether they can pay or not. NO GAMES.

Posted by: 12BarBlues | October 7, 2010 3:10 PM

.................

I think it might have been Jonathan Swift who remarked: The law is a net that is woven in such a manner, that it will trap gnats, and let hornets and wasps escape. Or something similar to those words.

Posted by: Liam-still | October 7, 2010 3:14 PM | Report abuse

People would take conservatives ranting about poor people taking advantage of the system if they were consistent about wealthy people taking advantage of the system.

People would take conservatives ranting about illegal immigrants & employers, if they didn't excuse themselves from complying.

Perhaps a little less ranting, and a little more understanding, is in order? Of course, I could be wrong.

Posted by: 12BarBlues | October 7, 2010 3:20 PM | Report abuse

Looking at the graphs in the article I can see your point s cat. The high end of the plateau isn't a straigt drop off, its a scaling down. Therefore it is completely possible that an incremental raise might offset the EITC loss until a second threshold is met. OK, that makes some sense. The graphs in the article are hard to work with because of their size so I cannot fully prove my position and will accept your calculations and stand corrected.

but I also wonder if the EITC isn't the only tax payer funded benefit at stake for a small raise. What of food stamps or section 8 or Medicaid?

Posted by: skipsailing28 | October 7, 2010 3:20 PM | Report abuse

It's Socialism For The Wealthy, and Social Darwinism for the poor.

Posted by: Liam-still | October 7, 2010 3:24 PM | Report abuse

imsinca:

Can you believe that????? Now that we passed the thing, we really should go back and see what it contains! And they passed it procedurally with no actual vote! Is it any wonder that the health care legislation turned out as badly managed as it did?

In a previous roundup, Greg included a mocking piece about Joe Miller wanting to return election of Senators to the state legislatures as the Constitution directs. It seems like a crazy idea until you ask yourself could we possibly get a worse Senate?

Thanks for the reply

Posted by: 54465446 | October 7, 2010 3:24 PM | Report abuse

STRF: What's with the use of actual facts? If I didn't see all the CAPS and big spaces: I'd swear it was being ghost written. Hey, not to lure you away from taxes, but you should be a person who has a unique view of the Presdient's veto today. Got one?

Posted by: 54465446 | October 7, 2010 3:33 PM | Report abuse

54465446

I'm thinking we need to re-visit term limits, obviously we need campaign finance reform, and also changes to filibuster rules. The Senate isn't even living in the 20th Century much less the 21st.

Speaking from a dysfunctional state legislature here in CA, I don't think I'd want any of those folks to pick our Senators though, LOL.

This entire foreclosure mess is a disaster for the economy and it's just going to drag the process out that much longer. Once again, we have the banks and mortgage industry to thank for a consumer nightmare.
Master's of the Universe, my azz.

Posted by: lmsinca | October 7, 2010 3:34 PM | Report abuse

It's Bush II --- the sequel!

In a world where the voters have lost their memories, and their minds, watch as the failed policies of the Bush administration are back----with a vengeance.

See the wealthy get wealthier and the middle class and poor fall further behind as the GOP takes control of Congress.

Watch as corporations run amuck, the environment gets trashed and Wall Street wreaks havoc on the economy yet again.

See the GOP finally destroy the "evils" of Social Security and Medicare. Watch as they pay lip service to fiscal responsibility.

Get ready for ZERO net job growth with Bush II--the repeat of an error.

Coming this November to a voting booth near you.

http://www.thechicagodope.com/2010/08/16/republicans-introduce-%e2%80%9ckill-the-economy-plan%e2%80%9d/

Posted by: Mikeystyle | October 7, 2010 3:36 PM | Report abuse

The current foreclosure mess is a result of Wall Street putting the cart before the horse. There was no way to turn mortgages into international securities while abiding by individual state laws, so they just ignored them. THEN after judges all over the country actually did their jobs, Wall Street had to backtrack and surreptiously pass legislation to try to make all the things they had done legal.

Posted by: 54465446 | October 7, 2010 3:44 PM | Report abuse

in response to this:
==============
Why do I detect that it is entirely reasonable for wealthy people to game the system, but not for poor people? Poor people are supposed to pay, whether they can pay or not. NO GAMES.
======

then join us in an effort to simplify the tax code so that the bite the government takes remains stable but the games are eliminated.

the game exists because congress wants it that way. The tax code is so complex because congress wants it that way. If we want a simpler system we are going to have to overcome our own federal legislature.

Posted by: skipsailing28 | October 7, 2010 3:47 PM | Report abuse

@skip,

Under just about any flat tax scheme, my taxes would go down. If Whitman has her way in CA, with eliminating capital gains taxes, my taxes will go WAY down. If I just voted my own pocketbook, I would vote for zero capital gains, fed & state, 15% tax on dividends and to hell with everything else. That's my income--capital gains & dividends. What do I need deductions for if my income is not taxed?

If I voted my own pocketbook, I would vote for a VAT if it lessened my tax on income. Why would I care? I don't spend any more money if I make a lot or a little. I don't spend much money anyway.

But, most people don't benefit from capital gains and dividend preferences. They have only earned income. And they tend not to have any complicated deductions. Their taxes are SIMPLE.

Most people spend every dime they bring in and therefore a VAT tax would really hurt them. And really poor people can't make it now paying only state sales tax. I really don't see how adding tax burden to those who CAN'T pay makes sense.

Schemes that lessen the burden on those who CAN pay to transfer the burden to those who CAN'T just seems like a dumb business idea to me. I'm a pragmatist, not an idealist.

I remember when Reagan passed his tax simplification act. At the time, it was known as the "the lifetime employment Act for tax accountants". For most people, their taxes are SIMPLE already. It's only for wealthier people that the code is not simple.

Forgive me, when I hear someone crying out for simplicity in the tax code, especially if that person has wealth, all I hear is "let me pay less".

Posted by: 12BarBlues | October 7, 2010 6:39 PM | Report abuse

Par for the lying course for the GOP. They haven't told a truth in years.

Posted by: B2O2 | October 7, 2010 8:31 PM | Report abuse

I just now received an email stating that this website http://bit.ly/bqq3It can get you $1000 Exxon Mobil card, what do you think? is that really true ?

Posted by: taylordirk | October 8, 2010 2:46 AM | Report abuse

What I haven't seen posted now or earlier, is the acknowledgement by the left that the Bush tax cuts actually favored the poor and lower income portion of the taxpaying public. Only now that they want to address the expiration of these cuts for all but the upper level do they have to deal with the fact that those cuts did indeed favor the poorer subset. And as was noted by others, the left is not willing to put it to a vote so how much can you believe when rhetoric doesn't follow action?

Posted by: paulkositzka | October 9, 2010 12:33 PM | Report abuse

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