And what does the TAX CUTS ARE FOR PEOPLE WHO PAY TAXES mean? I've deliniated that part already, or did you not read the OP all the way thru? No one said that the credit should come to ppl who pay no tax. No one.
post #21 of 40
5/30/03 at 11:24am
|Perhaps the biggest break for business was what did not make it into law. To offset the cost of the tax cut, senators included provisions to crack down on abusive corporate tax shelters, combat some accounting scams such as those pursued by Enron Corp., prevent U.S. companies from moving their headquarters to post office boxes in offshore tax havens such as Bermuda and limit grossly inflated deferred compensation plans for corporate executives.
Last year, at the height of the corporate scandals, such measures appeared unstoppable. But more than a year after Enron's implosion, none of them became law. This time, House negotiators tossed them aside, saying they would not agree to any provisions that could be called tax increases. That came as a relief to business lobbyists who mobilized to kill the measures.
"The things that mattered most were all the things that didn't get in," said a Republican tax lobbyist. "That kind of stuff really matters."
|Originally posted by noahsmum
Maybe the Dems should've initially agreed upon Bush's first tax proposal and none of this would've happened. Something had to be cut from the tax plan.
|But the provision was dropped in the House-Senate conference, where tax writers spent days trying to cram many tax cuts — most prominently, cuts in the taxes on stock dividends and capital gains — into a bill that the Senate said could not be larger than $350 billion.|
|Our overarching conclusion is that the Administration, House, and Senate Finance Committee proposals are seriously flawed and are strikingly removed from the economy's current and long-term problems. Although each of the proposals would provide a short-term economic boost, almost any increase in government spending or cut in tax revenues would stimulate a sluggish economy (assuming the Federal Reserve cooperates). The three proposals on the table, though, would provide their stimulus at an unnecessarily high cost: they would reduce long-term growth, exacerbate looming budget problems, and impose significant burdens on future generations. In addition, they would be regressive and would not only fail to meet their ostensible goal of integrating the personal and corporate taxes, but could also open up new sheltering activity. Better alternatives would include substantial aid to the states, an extension of unemployment insurance benefits, and reform of the alternative minimum tax.|
|The paper focuses on cuts to personal taxes (income and payroll) in the form of rebates, withholding holidays, and acceleration of scheduled marginal rate cuts; it also discusses a state sales tax holiday. Among the business tax cuts that the report examines are proposals related to the alternative minimum tax, the treatment of subpart F income, accelerated depreciation or the expensing of new investment, and investment tax credits. It also assesses the stimulative effects of reducing capital gains taxes. The paper ranks the proposals according to cost-effectiveness--that is, their first-year stimulus "bang" per total budget "buck." It concludes that most of the tax cuts that the report analyzes are unlikely to generate large first-year increases in gross domestic product.|
|The payroll tax and sales tax holidays are likely to have the greatest bang for the buck of the proposals assessed in this report. The delays inherent in implementing the sales tax holiday, however, substantially undercut its likely usefulness as a stimulative mechanism. It is also the smaller of the two proposals for tax holidays in terms of its dollar impact. The bang for the buck of a payroll tax holiday would be reduced if the holiday extended to the employer's share of payroll taxes; that extension would add to the cost of the option without generating a significant increase in consumption. Both of the holiday proposals are uncertain in their effects, with significant downside risks.
Next in ranking by likely cost-effectiveness are the extended EGTRRA rebates and the two marginal investment incentives (partial expensing and the investment tax credit). If the investment tax credit was made incremental, its cost-effectiveness would increase substantially. Again, however, both the rebates and the marginal investment incentives are characterized by significant uncertainty. Advancing the cuts in marginal income tax rates as provided under EGTRRA would have a relatively small bang for the buck because of the option's cost. The remaining incentives--modifications to the tax treatment of subpart F income, repeal of the corporate alternative minimum tax, and reductions in capital gains taxes--would be least likely to generate significant stimulus.
|Originally posted by Marlena
My suspicion, however, is that it's basically irrelevant to Bush and Co. how the cut will affect the immediate economy. Rather, this has merely been his gang's philosophy for years now, and now that Bush & Co. has an opportunity to implement it, they're going for it, no matter what its effects might be.
|Originally posted by daylily
What I want to know is, why wasn't any of this in the news before this thing was passed into law?
|President Bush sent a strong signal to House Republican leaders today that he wants them to move quickly on enacting a child tax credit that would affect millions of Americans with low incomes.
"His advice to the House Republicans is to pass it, to send it to him, so he can sign it," the president's chief spokesman, Ari Fleischer, said. "He understands they're going to take a look at some other tax matters. That's their prerogative. But he wants to make certain that this does not get slowed down, bogged down. He wants to sign it."
|The president's message to House Republican leaders, relayed through Mr. Fleischer, showed that Mr. Bush and his top advisers feel that it is time to put an image problem behind them.|
|President Bush sent a strong signal to House Republican leaders today that he wants them to move quickly on enacting a child tax credit that would affect millions of Americans with low incomes.|