Tuesday, February 10, 2009

TAX CUTITIS


This cartoon was in the local paper yesterday. I downloaded the image from GoComics.

A few thoughts after twenty odd minutes of intensive internet research. We’re still hearing the tax cut mantra. I have no idea what percentage the ‘pubs are looking at. But, they keep talking about us low and middle income folks. Gee, it’s nice to finally be noticed. I surprised they even remember we exist. So I’m just spitballing here.

One internet site put the median household income in the United States at $61,500 last year. So half the households have an income below that amount and half are above that amount. For the sake of argument I’ll assume that one person is employed and making that much money. Under our progressive system, the tax rate on that amount is twenty five percent. After comparing the basic hit with what’s actually on my W2, claiming only myself, I’m assuming that the tax hit for my imaginary taxpayer is $15,375 or $1,285 or so per month: and he’s not claiming anybody including himself.

I doubt they’re going to drop to the next lowest tax bracket of fifteen percent so, for the sake of argument, let’s drop this person to twenty percent. The hit is now $12,300 or $1,025 per month. Not bad, an extra $260 per month. But, that’s with no exemptions. So the actual “cut” would be lower, probably much lower.

If I follow the same scenario for someone making what some of my former co workers are making, say $25,000 per year and drop the rate to midway between brackets to get a twelve and a half percent rate I end up with a whopping $43.75 (or so) extra per month. And remember, this is without claiming anyone, including myself, so the actual “savings” would probably be lower. Not much immediate stimulus at twenty bucks or so per paycheck. Yeah, I’m going to run right out and buy a new car. Actually that just about covers the cost of materials to rehab the old hardware for the doors and cupboards in the kitchen. We’re painting this week.

Hell, that “tax cut” for a two week paycheck wouldn’t even buy a gallon of mid grade paint. It would be enough to cover the supplies it took to fix the kitchen ceiling ourselves. And it would buy a really good lunch at Lisa’s cafĂ©.

Get real guys and come back to planet earth. Get the heck out of D.C. Get your insulated backsides back to your home states and visit the local employment offices. For God’s sake look into the faces of the people behind the statistics.

9 comments:

Lisa :-] said...

I wouldn't mind if a few "Joe Taxpayers" got enough money to buy a really good lunch at my cafe.

And BTW, Senate Republicans forced the Administration to CUT the middle-class tax cut. So they really DON'T give a rat's ass about us.

Nice to know some things never change...

JACKIE said...

I hadn't heard about the middle class tax cut being "cut." It's a trip to hear 'pubs worrying about the drain on the future of the stimulus package. Geez where were you guys when we invaded Afghanistan and Iraq off budget. Oh, yeah. Iraqi oil was supposed to pay for the war. NOT!

Kathy said...

Oh yes, it is nice to know some things never change. If I ever get any of my money back I might by a ticket to Oregon and buy a cup of coffee at Lisa's cafe. That way I'd be supporting ... the gas station by purchasing gas to drive to the airport, the mall with my new clothing purchases, the travel agent, an airline, a taxi or rental company, a hotel and well, Lisa's Cafe! Woo hoo!

Oh, wait, I'm only dreaming here. Reality will set in, I'm sure when our good friend, Gov' Devall Patrick increases our gas tax 27 cents A GALLON ... Masshole.

Anne said...

I don't think there is a perfect fix. If it starts at Main St. then I say everybody should prepare themselves to take care of themselves......just like the Great Depression. I am also sick of hearing the word recession. The deffinition of the difference between recession and depression? If it is a recession YOU are out of a job....if it is a depression, I'm out of a job. I also think it is our duty to contact our senators and congressmen and let them know how we want them to vote. It's easy to do now, via online. Do you (meaning anybody reading this) do this? Anne

sunflowerkat321 said...

I'm sure that in NY, any federal tax cut will be immediately gobbled up in tax increases on the state level. I'm sure it's not much different in many other states. I think that the republicans are gambling on the average citizen not doing the math to figure out that this will not provide them with much (if any) relief. As things stand now, any extra money anyone finds in their check will most likely still go to taxes on the state or local level.

Lisa :-] said...

Anne--

My husband emails the president, our senators and our Congressmen all the time. He invariably gets back some kind of form letter that thanks him for his interest, then goes on to explain why his views are basically full of shit.

And, while I'm at reponding to Anne, I'd like to point out that people DID NOT just "take care of themselves" during the Great Depression. There were a huge number of government programs instituted to stimulate the economy, provide jobs and care for those who could not care for themselves. Ever hear of the "New Deal?"

It is not a sign of personal weakness to expect the government to do something about the economy. We invest 20% of our paychecks into FEDERAL taxes, more if you add in state and local. I don't think it's unreasonable of us to expect some kind of return on that investment...

Anne said...

I agree Lisa, Our government has a great responsibility. However we all need to email or write our congressmen/women to imform them of our opinions. Their future depends on our imput. I also believe that it is personal responsibility to take care of ones self and only depend on government when necessarry. It is becoming more and more necessary for more people. We are at a critical time in history. I always get updates on how my senators and congressmen/women vote and I am always giving them my opinion. I suggest that every voting person in every household do the same. What could it hurt? If you get back a response as to how wrong your opinion is.....vote the S.O.B out of office. WE are the government and every vote counts. Anne

TJ said...

I haven't heard a single word about the middle class and what they see in it's future. I have heard that unemployment will be exteneded with a $one time$ raise. I have heard that people who are collecting disabilities will get a one time $250.00$ hit and food stamps will be increased for those who can benefit from the support.
Not a word about people who are retired and started a self employmed small buisness. For those retirees who have done this [ that would be us ]we are paying a total of 15% Federal taxes on our retirement and a additional 15%self employment tax which makes it damn hard to stay honest and operating within the bars. The range for people who make $200,300-$357,700 are only paying 33%!!!

Most all of our money goes to one employee and the Federal government. This is the case for most..
What I hear the President saying is for us to stop spending and start saving....
"" Creating a new culture of responsibility— Extreme Makeover, American Edition—will require some personal heavy lifting from each of us.""
I say we need a Secretary of NO BULLSHIT! Someone who understands that we really aren't a country made up totally of irresponsible, cry baby people.
I want the ball back in the laps who have created this mess and leave the work horses alone unless you can throw them a crumb here and there.
Thanks for the ear!
TJ

JACKIE said...

TJ you can bend out ears anytime. I haven't heard the middle class mentioned since the controversy over bailing out the car comapanies. Somehow we bought into the idea that the country could buy manufactured goods from overseas and evolve into a "services" economy. And that this WAS A REALLY GOOD IDEA. It never occurred to a lot of us to ask who was benefitting from this.

Trouble is employee pay for providing services never matched what was paid for actually making something to be sold. And they've outsourced as many of those jobs as possible.

Too much focus on how the stock market was doing. As long as the market was up too many of us assumed that the economy was doing ok. It masked the fact that a lot of people were already in trouble and had been for at least a couple of years.

Pesonally we've been stimulating the local home inprovement store, and a good electrician. all the rest is sweat equity. the kitchen looks pretty good right now.