Question for McCain supporters...

I've been hearing a lot lately about Obama being a socialist, people site Obama's plans for refundable tax credits for poor people (refundable tax credits mean you can a tax refund larger than the amount you pay in taxes) and quote him saying he wants to 'spread the wealth around'.

My question is why are Obama's refundable tax credits socialistic, but the refundable tax credits McCain has proposed are a reform? and why don't you accuse Sarah Palin of being a socialist after she added windfall taxes to oil companies in Alaska and then redistributed the tax money to the people of Alaska? Does it only count as socialism if you propose 'spreading the wealth around' but not if you actually do spread it around?

Original Post by deaglesfan:

Lets not forget in all this that "middle class/income" stops at $57,000 HOUSEHOLD INCOME.  (http://articles.moneycentral.msn.com/Savingan dDebt/LearnToBudget/TheSecretToSuccessInTheMi ddleClass.aspx) and that people sub-middle class (under $36,000) pay very little in tax anyway.

 So, if you are making over $91,705 COMBINED household income, you are considered "upper class" (not even upper-middle) and would benefit more form McCain's plan--because you EARN more and are already taxed at a higher percentage than the other brackets.  The McCain personal tax incentives are not to benefit the wealthy---they are to make the taxation more fair across the board.  Why is it that my family should return 28%-35% of my income when we have worked to have a job that pays those kind of salaries when there are people, 15% and 25% to get the same service out of the government?  It is because of the socialist ideals that I should subsidize people who can't pay as much.  I do understand that $36,000 is not enough for a person to live on if they lost 35% of their salary to taxes, but dang it, why should I lose a larger percentage of my income just because my job pays more.  Tax me at the same rate and you will still get more money out of me than some one making 1/2 of what I do.

 

 Okay, but the "upper class" is still low enough income that Obama will be taxing you less than McCain will.  By that terminology, it's only "really really rich" who'll be better off under McCain.

My problem with your last argument is two-fold:

1. The higher your total income, the smaller a percentage of it you pay on necessities like food and necessary shelter.  Therefore, you have a larger percentage left over for frills (which might include things like living in a bigger house than you necessarily need or driving a more expensive car than you necessarily need).  Frills are good things; I'm not saying you don't deserve them.  But at the same time, because you have a higher percentage of your income "leftover" after necessities, it makes sense that you should pay higher taxes.  I currently live in a place that thinks it's fair to charge exactly the same dollar value (not even percentage!) for health care to someone making $15K per year and to someone making $1 million per year.  In my opinion, that's ridiculous (as I told them on a phone survey several years back).  I realise others will disagree with me on that.

2. Do you really think that pay rates scale particularly well with value produced by a job?  I don't.  I think society benefits much more from teachers and police and fire fighters than it does from bankers and movie stars.  But who gets paid more?  Are the bankers and movie stars smarter or otherwise better than the teachers and police?  Not necessarily.  Wouldn't the world be a better place if our smartest people took jobs like teaching kids and solving crimes - rather than jobs shuffling paper?  I'm not saying people don't work hard to get the high paying jobs, but people work just as hard to get less-well-paying jobs as well.  So, I might buy the argument that those with better paying jobs deserve to have a higher quality of life than those with smaller pay cheques *if* I bought the argument that those high paying jobs really were the "most important".  I'm not actually suggesting that means that everyone should just give up all their income over a certain amount - but it makes complete sense to me that those earning larger incomes should be paying a higher percentage in taxes (particularly given the points I made in Reason #1).

OP:  My question is why are Obama's refundable tax credits socialistic, but the refundable tax credits McCain has proposed are a reform?

 Obama will take the federal income tax dollars that are paid by 70ish% of the population, and give them to the 30ish% that do not pay any federal income taxes.   That is the peak of socialism.  Lately he has been using the term "payroll taxes" because there are a lot of people who just don't understand that not everything the feds take from your payroll check is income tax.  (The public education system is a socialists friend)  McCains tax credits only give you credit on taxes paid.  You pay, you get credit.  You don't pay, no credit.

OP: and why don't you accuse Sarah Palin of being a socialist after she added windfall taxes to oil companies in Alaska and then redistributed the tax money to the people of Alaska? 

Here is a loose explanation of how this situation works;  The tax is essentially like a lease where the oil co. pays the good state of AK for use of their land and resources -the state owns the mineral rights, the lands the pipelines run on, roads for upkeep, waterways for shipping etc.).  Instead of the AK government (politicians) making a profit off the resources that are owned by the people, the people make a profit.  You know, government FOR the people. 

I hope that helps.  Kay.

the percentage in the first  part of your response is inaccurate. Obama does not propose taking the taxes paid by 70% of the population and giving them to the 30% that don't pay.

Please provide a link.

You don't have to look at Alaska to see socialism at work. You just have to watch the federal bail out package unfold. Nationalizing banks? Now there's talk of buying up part of GM? These actions fit the strictest definition of socialism and under a republican administration, no less.

SusieCue, you said a couple of things that really jumped out at me.

#21 - The higher your total income, the smaller a percentage of it you pay on necessities like food and necessary shelter. 

OK, but who decides where necessity ends and frill begins?  You? Me? Mr. Obama?  McCain?  Scary. 

Also from #21 -  Do you really think that pay rates scale particularly well with value produced by a job?  I don't.

Value is determined by demand.  Personally I don't think that "Dancing with the Stars" is worth an hour of my time, but the polls prove it is one of the top rated shows on t.v. today, putting a premium price on commercials showing during that hour on that channel.   The only way to get the Cop a better paycheck then the movie star is for a whole lot of people to stop going to the movies.  It is a shame....and it says a lot.

Personally, I am for a federal sales tax to replace the federal income tax.   This would serve several purposes all at once.  1st, those who make more money are more likely to spend more - and hence, pay more, making a whole lot of low income people happy.  2nd, a sales tax means that illegal aliens are paying federal taxes (way past time for that)  And no more IRS.  Nothing bad about eliminated bureaucracy.   

Along this line, I think there should be a credit for basic living expenses per person - enough to cover the taxes on necessary food and shelter for each individual.  I also think that a singe vehicle and a primary residence should escape federal taxation.

Kay.

Kay, do you live in a state that taxes food? My state of residence does not tax food at all. I have travelled to a state that has no state income tax, instead they have a high sales tax that also taxes food. This really hurts middle to lower income workers and favors the rich. Do you have any idea of how much higher your food bill would be if you were paying taxes on food? It is shocking. I use this as an example of a flat tax.

Flat taxes are more inherently unfair than a progressive income tax. I know they sound fair on paper and in theory, but once you see what happens with a real income scenario it is very easy to see how a flat tax punishes the middle and lower incomes and makes it that much harder to pull themselves up.

Original Post by kathygator:

the percentage in the first  part of your response is inaccurate. Obama does not propose taking the taxes paid by 70% of the population and giving them to the 30% that don't pay.

Please provide a link.

Here you go.  This addresses both the numbers I gave and the "95%" that Mr. Obama talks about.  Search engines are easy to use.  But I admit my mistake.  According to this site, it is closer to 60-40.      http://www.politifact.com/truth-o-meter/artic le/2008/oct/20/your-taxing-questions-answered /

You don't have to look at Alaska to see socialism at work. You just have to watch the federal bail out package unfold. Nationalizing banks? Now there's talk of buying up part of GM? These actions fit the strictest definition of socialism and under a republican administration, no less.

 Tell me about it!!  I am absolutely disgusted with the whole situation.  I am no expert and cannot really give an educated opinion on the need for this bailout, but even if all the doomsayers are right and the world as we know it will end if we don't make this money available, it occurs to me that you cannot adequately plan how to best use trillions of dollars in a matter of a few days.   Especially not the bozo's we have on the hill.  Ridiculous.

Kay.

Here is an example I came up with in another thread that explains the unfairness in a flat tax rate. I used to prepare taxes for a wide variety of people. I also used to work for a big bank in their estate and trust department. So I have seen flagrant examples of the very rich shielding a large percent of their income and actually paying very little in taxes.

Two single guys. Both work all year, 1 makes $10,000 the other makes $100,000. They each pay 5%. The one now has to live on and pay all his bills on $9,500. The other lives on the $95,000. The guy making $10,000 probably works harder for his money than the other guy.

Now remember, both of them still have to pay city tax, state tax, sales tax, property tax. The guy making $10,000 can barely live. The other guy doesn't even notice any of his money is missing.

The flat tax is only fair in a mathematical sense on paper. It is not fair in a humane and moral sense. The guy making $100,000 can afford to pay more and still live well.

If you add children into the figure you quickly see how a flat tax kills middle income families.

Here is a thread with a really good discussion of taxes in general and the difference between flat taxes and progressive taxes. The first part of the thread isn't really worth visiting, but go to post #41 and read through about #66.

Well, like I said, my preference is for a sales tax rather than a flat tax.  And my preferred version allows for a credit to cover taxes on necessities.  "Necessities" include a chicken cooked at home diet, not lobster and caviar at the Grand.   So those who are eating out 5 times a week will pay much more than those who eat at home and budget the food dollars.  Reasonable.    

What is unreasonable is somebody working part time for minimum wage - as your example shows - and expecting sympathy from people employed full time. 

Look, I am all for giving people the help they need to get on their feet, get an education, training, experience, to get them to a place where they have a skill for which other people want to pay.   Yes, lets give the 10k guy a leg up.  But at some point, that leg up has to segue in to him standing on his own two feet.   I think that the difference between us is that I am willing to close the checkbook on the person who doesn't stand up on their own in a reasonable time period.  There is a difference between being humane and being taken advantage of.  

Kay.

Kay, a sales tax is a flat tax. How are you going to give people a credit to cover necessities if you institute a sales tax? You can just not tax food, but what about dish soap or towels or toothpaste, shampoo, aspirin.

Would you be happier if I changed the lower income worker to $20,000 a year? That means he's working a 40 hour week, 52 weeks out of the year at about $9.50 an hour.

Two single guys. Both work all year, 1 makes $20,000 the other makes $100,000. They each pay 5%. The one now has to live on and pay all his bills on $19,000. The other lives on the $95,000.

Now remember, both of them still have to pay city tax, state tax, sales tax, property tax. Also remember they each have to pay their rent, pay for health insurance, pay utilities, buy food, pay for transportation.

The guy who is making $100,000 per year has plenty of money left over to better his situation. He will have funds left over to put into retirement or to invest in tax free income producing accounts so that he can earn money without having to pay tax. A flat tax makes it even harder for low and middle income workers to make improvements to their lifestyle.

No where in any of my posts did I suggest giving unlimited handouts to anyone.

Again, a per-person credit for necessities.   

A flat-tax is generally discussed a flat income tax.   One can  pay a smaller or larger percentage of their income in sales taxes depending on how much they spend.

10k, 20k 50k, does it really matter?  There will always be those that think that they are working harder for less money and it just isn't fair that somebody has more than they do. 

We all have the right to equal opportunity.  Not equal results.   Look, I make my living inspecting aircraft parts at an FAA repair station.  Every day people all over the states trust their lives to the wing flaps I say are good enough to put back on that plane, but I'm thinking I don't make as much as those jackasses who film that show called jackass.   It's not fair.  Life isn't fair.  I'm over it. 

Kay.

You personally owe me about $34,000 as your share of the national debt - my nation holds your paper. Would you like to pay that over your tax bill in a small reasonable rate, or would you like to pay me now as a lump sum?

 The people who agitate for tax cuts and less government spending would like you to believe that you can defer repayment of the naional debt - preferably until they're dead and it's your grandchildrens' responsibility.

But that's not even considering the larger picture.  Do you even know what the tax money people pay go to? You work for the FAA, you're paid by the tax income of the nation. Under a flat tax system you can kiss your job goodbye, the FAA is one of those government agencies that are an unnecessary imposition on the market that the Grover Nordquist-style anti-government activists would like to get rid of.

 How would your lifestyle change if you went from inspecting aircraft to flipping burgers?

 There are wider ramifications than your personal pocket book. How about the national highway system? Telecom? clean air and water? Food that's inspected by the FDA? All of those are unneccesary interferences in the free market and can be disposed of according to the flat-taxers.

 How do you feel about your nation being able to afford Medicare? Medicaid? Social Security for the elderly? Scholarships for education? High schools?

 Flat tax can't pay for that, because while Wendy the Waitress - or Kay the Burger flipper after the FAA is disbanded - have no choice but to live in debt peonage to the corporation they work for, the 1% of society who owns 80% of the wealth of your nation do not spend their wealth in a taxable manner- a flat sales tax would shelter all unearned income from interests and investments from taxation.

 Your plan would make yourself poorer while the rich grow richer- at your expense.

 You've been sold a bill of goods, by some very clever liars.

Wow, Melkor, your post is hard to follow. 

First, I do not work FOR the FAA.  The FAA does not repair aircraft.  I work for a repair station that is governed by the FAA.   The common terminology may be confusing for those unfamiliar with it.   Whether or not the FAA exists, the planes still need to be repaired.  But that is neither here nor there.  If I stop working at the repair station, I go back to electronics.  Or automotive.  I hear alternative energy is starting to actually produce things.  My skills are not dependent on any one industry.

Medicare, medicaid, SS?  I don't count on any of it and  I work my backside off to make sure I don't NEED to count on it.  If it happens, good for me.   But it is not looking good. 

I absolutely agree with needed spending.  Roads, schools, cops (excluding the DEA) military are all needful programs.   And we should absolutely pay for them with all the extra money that is generated with the tax cuts.  Look it up.  Over the last 30 years, whenever taxes go down, revenue goes up.  And then, we can start to pay off that debt by cutting programs that are not needed. 

It really does make sense.  To pay off debt, spend less than you bring in.  It works for families, it works for businesses, it would work for the US government.  And if I can do this without sticking my hand into somebody else's pocket, so can uncle Sam.

Finally, I am willing to bet that nobody personally owes you anything more than a fiver.

Kay.

Sales taxes places the entire tax burden straight onto consumer spending at a retail level.

 Most of the economy is not retail - a flat tax or sales tax would except the entire stock market, all business-to-business spending, all stock dividends and all interest income from taxation, import and export tariffs and basically exempting every source of government revenue that isn't based on consumer spending from taxation.

 Joe the plumber pays everything while Simon the hedge fund manager pays nothing, in other words. How fair is that?

 And as for the taxes down/revenue up thing - no. Whenever reaganomics-style inflationary deficit spending and tax revenue cuts have happened the result has been investment bubbles, savings and loan scandals, government bailouts and a massive wealth transfer from the middle class to the capital owner class.

 Look it up. Whenver there have been massive tax cuts and deficit spending, you've paid for it through loss of purchasing power. In real terms, you make less now than you did 30 years ago.

  You've been had by the hidden agenda of the Grover Nordquist anti-government activists who are actively trying to bankrupt your government so they can finally get rid of programs like college scholarships and social security.

 (But you're right- most of your debt isn't owed to me, you owe it to the Chinese government. Now, does that make you feel safer?)

I quite enjoy your posts, Melkor.

Sometimes you can't talk to people though... they just don't want to listen. And you're right about the China thing... I read an interesting article about it the other day. I'll have to dig it up.

Original Post by kay_h:

Yes, lets give the 10k guy a leg up.  But at some point, that leg up has to segue in to him standing on his own two feet.   I think that the difference between us is that I am willing to close the checkbook on the person who doesn't stand up on their own in a reasonable time period.  There is a difference between being humane and being taken advantage of.  

Kay.

So humanity come down to a timeline.

Those in the lowest income brackets arent worrying about buying a house, getting insurance or going to college because theyre scraping by to pay rent and feed themselves. 

Sounds like it okay to give them a leg up with tax relief in order to get their necessities but if they dont pull themselves out of their low salary range, sucks for them.  Well, it already sucks for them but now that we've tired of them not excelling, expect things to suck much more.  

Outside factors and circumstance allow some to break away from poverty.  The majority dont.  Shall we blame them?  Should we remind them humanity has limits and in order not to be taken advantage of the clock running down so enjoy their poverty while they can - its going to get worse because theyve been poor too long? The wealthy apparantly cant afford to pay more taxes so you can continuing stuggling less.  Or if they can, its just not fair - you know, survival of the richest.

There's a pretty bold assumption that the money borrowed is going to be paid back considering the sum is beyond something that can actually be paid even by the United States.

Watch for repudiation in the form of an IMF paper gold scam.

It'll be an expensive lesson for all involved.

Sure, you're probably not going to pay it back in cash, but one way or the other it's going to cost you - either you pay the higher taxes necessary, or you pay it by losing purchasing power.

 Those tax cuts are going to make your real economy bleed from every orifice. Next year, China will pass you in manufacturing capacity, and will soon no longer need you as a market for the products of their increased industrial productivity, their own worker base will be sufficient. They won't pull the plug immediately, but there will come a point when they'll stop giving you easy credit and start talking hard terms.

The ones that are gonna get hosed are those countries holding t-bills, but the time for easy credit is passed imho, the gov't is just squeezing every last drop out of it that they can before the game is up.

The new currency will have to be asset backed, so no more free credit (good for the us people imho) and immediately restores our purchasing power. Unlikely that it'd be gold based, though we have more than anyone else, but it'll have to collateralized somehow.

Without free credit, they can't use deficit spending and we finally get the means to enforce limited government.

So, you're basically one of Grover Nordquist's boys?