Bush child credit stiffs low-income workers - Mothering Forums

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#1 of 40 Old 05-29-2003, 09:01 AM - Thread Starter
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Oopsie! Look what got chucked out of the new tax law as it emerged from conference!

http://www.nytimes.com/2003/05/29/politics/29CHIL.html

Quote:
Most taxpayers will receive a $400-a-child check in the mail this summer as a result of the law, which raises the child tax credit, to $1,000 from $600. It had been clear from the beginning that the wealthiest families would not receive the credit, which is intended to phase out at high incomes.
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But after studying the bill approved on Friday, liberal and child advocacy groups discovered that a different group of families would also not benefit from the $400 increase — families who make just above the minimum wage.

Because of the formula for calculating the credit, most families with incomes from $10,500 to $26,625 will not benefit. The Center on Budget and Policy Priorities, a liberal group, says those families include 11.9 million children, or one of every six children under 17.
But hey, who cares? - these folks probably wouldn't vote Republican, anyway, and sure as hell don't have any money to donate to Bush's re-election campaign....
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#2 of 40 Old 05-29-2003, 11:29 AM
 
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I just read this and came on to post it myself. It is un@#$#@#believable.
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#3 of 40 Old 05-29-2003, 11:48 AM
 
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If we were going to have a tax cut to give $1,000 to all these other kids, there's no reason not to include these kids, too," said David Harris, president of the Children's Research and Education Institute. "Their families are working and playing by the rules and are left out, though it would not have cost too much to include them."

I guess if GWB keeps saying... Leave no child behind, leave no child behind...and if he keeps saying he is compassionate, compassionate, compassionate...

well, if he says it enough I guess he believes people will believe him.

except for those who are hurt by him.

I don't get it.. those who defend him so much must be pretty rich.

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#4 of 40 Old 05-29-2003, 12:02 PM
 
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yes, it totally sucks!!!

but honestly, I think that a certain percentage of people who will be hurt by this don't care. Because they view his other philosophies like anti abortion and anti freedom for amercians as ok because they agree with those.

it's the old " as long as he is against ______, then I don't care about anything else" syndrome :
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#5 of 40 Old 05-29-2003, 02:33 PM
 
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This is so infuriating.

The new Bush child tax-credit ammounts to a huge new entitlement program-- at a time when nobody is even sure how we will pay for existing entitlements like Social Security or Medicaid. It's one of those unfunded mandated that Republicans like to complain about unless they are the ones responsible for doing it.

Even worse, it's just an entitlement for the middle-class, not low income people who really need it.

All I know is that I'm going to take my "child tax credit" and send it straight to whomever is running against Bush in 2004.
I mean it too. I gave his $300 "tax cut" to my favorite environmental group. His bribes won't buy my vote.

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#6 of 40 Old 05-29-2003, 02:45 PM
 
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They don't get the credit because they didn't pay the taxes in the first place.

If they got checks, it would be a handout, not a tax credit. And that is a different subject altogether, called welfare.

So, before you accuse mean ol' Bush of trying to starve poor children, please take into account the tax structure here.
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#7 of 40 Old 05-29-2003, 03:25 PM
 
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d
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#8 of 40 Old 05-29-2003, 04:03 PM
 
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I wish ppl would read the info before responding..............

Quote:
The Senate provision that did pass was intended to help those families making $10,500 to $26,625 who do pay federal taxes and could have taken all or part of the $600 credit. The provision, which would have cost $3.5 billion, would have allowed those families to receive some or all of the extra $400 in the new law.
italics mine.
Quote:
"I don't know why they would cut that out of the bill," said Senator Blanche Lincoln, the Arkansas Democrat who persuaded the full Senate to send the credit to many more low income families before the provision was dropped in conference. "These are the people who need it the most and who will spend it the most. These are the people who buy the blue jeans and the detergent and who will stimulate the economy with their spending."
Juxtapose this to Warren Buffett's view on the tax cut:

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Instead, give reductions to those who both need and will spend the money gained. Enact a Social Security tax "holiday" or give a flat-sum rebate to people with low incomes. Putting $1,000 in the pockets of 310,000 families with urgent needs is going to provide far more stimulus to the economy than putting the same $310 million in my pockets.
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When you listen to tax-cut rhetoric, remember that giving one class of taxpayer a "break" requires -- now or down the line -- that an equivalent burden be imposed on other parties. In other words, if I get a break, someone else pays. Government can't deliver a free lunch to the country as a whole. It can, however, determine who pays for lunch. And last week the Senate handed the bill to the wrong party.
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Supporters of making dividends tax-free like to paint critics as promoters of class warfare. The fact is, however, that their proposal promotes class welfare. For my class.
Dividend Voodoo

Throw in the thread posted today about the shelved deficit report ............ if you can't smell the stink of this tax cut you should get your nose checked.
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#9 of 40 Old 05-29-2003, 04:08 PM
 
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sorry
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#10 of 40 Old 05-29-2003, 04:27 PM
 
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#11 of 40 Old 05-29-2003, 04:34 PM
 
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I didn't think so El's. But I did look at Marlena's post and realize I'd done some repeating. I should have left it though. Can never have too much ranting, eh?! Then again, it's not really that difficult to understand why this is bad, is it?
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#12 of 40 Old 05-29-2003, 04:36 PM
 
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Delta said~They don't get the credit because they didn't pay the taxes in the first place.

If they got checks, it would be a handout, not a tax credit. And that is a different subject altogether, called welfare.

So, before you accuse mean ol' Bush of trying to starve poor children, please take into account the tax structure here.
Delta, I assume you were not able to access the information. But this will indeed effect families that pay taxes. It will effect those with the greatest need. More of that good ol' compassionate conservatism, not leaving children behind, not determening policy based on 'focus groups' type stuff?????

My fear is that many others will also assume that this does not effect tax payers as you have.
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#13 of 40 Old 05-29-2003, 05:44 PM - Thread Starter
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Delta, the tax credit is refundable. A refundable credit is one which, if the filer does not pay sufficient taxes to receive the entire benefit of the credit, the difference is refunded, or given to, the filer. This is a standard part of our tax system, with which one ought to be familiar before making blanket statements.

Please see the following for more information:

http://www.cbpp.org/5-28-03tax3.htm

Quote:
The conference agreement does not accelerate the increase in the credit’s refundability percentage from 10 percent of earnings above $10,500 to 15 percent of earnings above this level. Such an acceleration was part of the Senate-passed bill but was dropped in conference.

For low-income families, the amount of the child tax credit often is limited by the amount of the credit that is refundable. Simply increasing the size of the credit to $1,000 does not increase the amount of the benefit for most of these families.

For example, consider a married couple with two children and $20,000 in income in 2003. Due to the standard deduction and personal exemptions, this family owes no income tax. Its credit is limited to the amount that can be received in refundable form. And that amount is limited to 10 percent of earned income above $10,500. Since the family has $9,500 in income above the $10,500 threshold, it is limited to a refundable child tax credit of $950 in 2003, which works out to $475 per child. In other words, this family is already unable to use the full $600 per child. Increasing the maximum credit amount to $1,000 does nothing for this family; its credit still cannot exceed $950 (10 percent of earnings above $10,500), or $475 per child.

What would have happened to this family if the child tax credit had been increased to $1,000 per child and the increase in the refundability percentage to 15 percent scheduled for 2005 had been accelerated, as would have occurred under the Senate bill? The family’s credit amount would be 15 percent of earned income above $10,500, or $1,425. This family would have received a tax cut of $475, rather than getting nothing.
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#14 of 40 Old 05-29-2003, 06:43 PM
 
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El's 3 Ones...

I have posted lots more info on the "shelved" study. (Including access to a 55 page PDF file.)

I just wanted to provide all I could. I am still not sure that even all that additional info provides actual straight answers.

But, it is all very interesting. Remember when we had a HUGE surplus?...wow....times to change, eh?

That stink just keeps getting "louder" as my grandmother used to say...Joyce in the mts.

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#15 of 40 Old 05-29-2003, 10:33 PM
 
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They pay their 8% FICA, they pay 8.25% sales taxes in Texas (soon to be 9.25%), and they pay property taxes directly and indirectly, and ad valorum taxes. They pay a higher percentage of their income in taxes than the wealthy.

I don't see how they can dare to call themselves "compassionate".
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#16 of 40 Old 05-29-2003, 11:39 PM
 
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We got $3800 off our taxes in "welfare" in 2002.

It was the amount we saved from taking our $10,800 mortgage interest tax deduction.

"Welfare" is just another word for "money it's ok to give to corporations or higher income earners, but we begrude it when you don't earn enough".

edited for spelling
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#17 of 40 Old 05-29-2003, 11:40 PM
 
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Oh, yes, there's more welfare:

Once you reach an earnings cap of $80,000 or so, you DO NOT pay the 7% payroll taxes for Social Security. It just stops.

THAT is welfare too.
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#18 of 40 Old 05-30-2003, 11:09 AM
 
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from the OP article

Most families with children who make about $30,000 or less are also eligible for the earned income credit, which the law does not not change. In addition, the law has a few other benefits for low income earners, like expanding the lowest tax bracket and a temporary reduction in the penalty on two-income couples.

Several centrist senators worked hard to make the child credit fully refundable for all low income families, and the full Senate voted this month to include a provision that would have included the minimum-wage families. 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.

House Republicans, who acknowledged the gap on the child credit, blamed the Senate for insisting on its $350 billion cap, saying the low-income families could have been covered had the Senate been more flexible.

A spokeswoman for the Republicans on the House Ways and Means Committee, Christin Tinsworth, noted that the provision was included in an agreement reached last week by Representative Bill Thomas, Republican of California, the committee chairman, and Senator Charles E. Grassley, Republican of Iowa, chairman of the Senate Finance Committee.

That agreement would have cost $380 billion, but it fell apart when an important swing senator, George V. Voinovich, Republican of Ohio, said he could not approve any bill that exceeded $350 billion. To satisfy him and the Senate, Ms. Tinsworth said, the child credit provision was dropped, along with other costs.


end article


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. We made about $20,000 last year, which is beans considering where we live and we paid NO taxes. We actually got $750 through Earned Income Tax Credit for having a child. TAX CUTS ARE FOR PEOPLE WHO PAY TAXES.
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#19 of 40 Old 05-30-2003, 11:15 AM
 
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This is so unfair, I can't stand it. So, someone who cleans hotel rooms 8 hours a day is less worthy than a nurse or a teacher?
No child left behind? Give me a break.

I remember one of the presidential debates in which Gore pointed out that Bush's proposed tax cuts would mostly benefit the wealthy, and Bush's response was that the people who "work harder" "deserve" the tax breaks. I'm not sure how he came to the conclusion that people with more money work harder.
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#20 of 40 Old 05-30-2003, 11:22 AM
 
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Quote:
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. We made about $20,000 last year, which is beans considering where we live and we paid NO taxes. We actually got $750 through Earned Income Tax Credit for having a child. TAX CUTS ARE FOR PEOPLE WHO PAY TAXES.
Maybe the Dems???????? The elephants have control, or have you forgotten? Every single quote above was from an elephant. You quoted yourself, it fell apart when Voinovich wouldn't vote. What was his affiliation again?

curious..............very curious.................


El
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#21 of 40 Old 05-30-2003, 11:24 AM
 
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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.
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#22 of 40 Old 05-30-2003, 11:36 AM
 
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by the way, if President Bush really wanted to see this pass with this provision which would have taken care of the the children of the really low income...he could have called George V. Voinovich, Republican of Ohio and asked him to vote for it. Instead, the white house did nothing.....and just distanced themselves from this bill.

this stings.

In particular for those of us who followed white house antics last november. During that time several moderate rebublicans were horrified by the Eli-lilly rider being attached to the homeland security bill. In particular, both senators from Maine, both republican. The white house made calls to these senators and others via Trent Lott (and others) demanding that they vote for the bill and that they would take care of the other thing later. (eli lilly)
These calls came as late as midnight. They WORKED the phones. And what was this cause? protecting Eli Lilly. That's what it looks like when the white house gets behind something.

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#23 of 40 Old 05-30-2003, 12:32 PM
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Word, Trabot! Thank you.

And great deconstruction, El's, thanks for the info.
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#24 of 40 Old 05-30-2003, 01:14 PM - Thread Starter
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As a follow up on who won and who lost in the Bush/Republican tax cut:

http://www.washingtonpost.com/wp-dyn...l?nav=hptop_tb

Quote:
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."
But I suppose that's ok - after all, any "tax increase" is bad under any circumstances, right? And it's not an "unfair" tax break (aka "welfare"), since they weren't paying those taxes to begin with, eh?
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#25 of 40 Old 05-30-2003, 01:17 PM
 
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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.
Yea right, gawd forbid they take some $$ out of the pockets of the wealthy so the poor could get a fargen break. Im sorry NM but isn't this supposed to 'stimulate' our failing economy?

What your saying is, if the dems would have 'agreed' to the 'entire disaster package,' we would have provided for the poor....?? This country is in massive debt! Each family in this now OWES 28,000 towards the federal deficit due to W's management of our money. Democrats think cutting taxes now is irresponsible. However, they feel that if the Repubs 'really' want to stimulate pur economy (with this bs tax cut) the $$ should go to people who will actually spend it i.e. THE POOR!

Noahsmum~pay attention to the snip you provided and I've outlined below ...They 'crammed' in tax cuts for dividends/stocks and dropped the poorest people from the plan. Typical Rebublican priorities. And keep in mind again that this is some how supposed to 'stimulate' the economy. :

Great swammy makes a prediction....When the economy is in fact NOT stimulated, the Dems will be blamed for not passing the entire package.


Quote:
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.
This is simply the 'Rebublican' way of punishing democrats who would'nt fall in line for their irresponsible tax cut. I hope the average family pays attention and votes Bush out in the next election....
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#26 of 40 Old 05-30-2003, 01:54 PM - Thread Starter
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The notion of economic stimulus is a red herring. I'm not tax specialist by any stretch of the imagination, but to date I have seen not a single explanation of how cutting taxes for corporations and for investors in said corporations could possibly stimulate the economy in its present straits. The problem is not inadequate production, but inadequate demand. If the problem is inadequate demand, then it would seem logical that one would put money in the hands of those most likely to spend it (namely, the lower and middle class) than in the hands of the most wealthy and corporations.

Perhaps someone could explain the alleged stimulus effect of the bush/republican tax cut to me - I would be most grateful.

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.
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#27 of 40 Old 05-30-2003, 02:05 PM - Thread Starter
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Here's an overview of an article out of the Brookings Institution evaluating the tax cut proposals that were on the table. I found it useful, as might others:

http://www.brook.edu/views/articles/gale/20030513.htm

Quote:
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.
It of course goes on to provide a discussion.
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#28 of 40 Old 05-30-2003, 02:07 PM
 
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I liked this article by J. Galbraith.

http://www.startribune.com/stories/562/3904253.html
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#29 of 40 Old 05-30-2003, 02:17 PM - Thread Starter
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And if you want a more "unbiased" source, here's an analysis from the Congressional Budget Office:

http://www.cbo.gov/showdoc.cfm?index=3251&sequence=0

Quote:
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.
and again:

Quote:
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.
Note that the investment and capital gains tax cut options analyzed in the paper ranked lowest on the list. Moreover, no one can claim that a bunch of Commie Pinkos wrote it.
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#30 of 40 Old 05-30-2003, 02:45 PM
 
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Quote:
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.
I think you hit the nail on the head there.

What I want to know is, why wasn't any of this in the news before this thing was passed into law? Last night, Tom Daschle was on NBC news claiming that he and other dems were not included in negotiations about the new tax cut plan.
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