Tax Day Tea Party

NT Drummer · April 7, 2009

If we are all going to pay these astronomically high taxes, why did my paycheck just increase due to lower taxes? Just curious how I am paying higher taxes by paying less.

My understanding is that this decrease in the withholding percentage is NOT a tax cut and NOT a rebate; the tax rates haven't changed. If so, that means a lot of people will be underwithheld, and will need to write a check to the IRS come April 15, 2010. We'll see how much they like doing that.

Can anyone confirm this?

The extra $15 or so per week certainly doesn't change my spending habits.

KRAM1 · April 7, 2009

that trillion $$ deficit has to be paid off somehow. If they don't raise taxes, how would you suppose they would raise revenues?

Buy cutting taxes and cutting government spending.

Edited April 7, 2009 by KRAM1

meangreenacct · April 7, 2009

Folks like Coffee and Tea will never get it...if you want to increase tax revenues you LOWER TAXES! Lower taxes work to create jobs and investment in research that leads to more jobs...more jobs equal more folks paying taxes and buying "stuff"...ie: more tax revenue.
BTW...the recent raise in the tax on tobacco by the Obama Administration is just one more broken promise from this administration. Anyone recall his promise that, what? 95% of the people will see NO increase in their taxes and would actually see a decrease? Hmmmmmm...a rise in the tax on tobacco will indeed be a raise in taxes for a lot of the folks who believed this guy's campaign promise of no new taxes for the majority of the citizens...and, just which folks do you think this little tax play will hurt the most...those that can least afford to pay more taxes...the poor and working poor of this nation. Nice job thiere Mr. O looking for ways to help those that can least afford to pay taxes (or so you said anyway).
Slashing all those military equipment plans and creating a lot more layoffs at defense contractor firms is a great way to get folks back to work too. Nice job! I think it will be interesting to see how many of the cuts Gates announced yesterday will actually come to pass. I would imagine that there will be lots of "crossing the aisle" on this one when dems and republicans alike start hearing from the "home folks" who will be losing jobs and revenue in the home districts.
Oh, hey, the laid off defense industry workers can just join AmericaCorps...or is that AmeikaCorps?
Anyone going to attend the Denton County Tax day Tea Party event? My bride and I will be there...anyone else?

So if we want to raise revenue by lowering taxes, how low do we go? Is 0% the target? I'm no expert economist, but I have a feeling 0% would not raise revenue, but that's just me.

I've often wondered about the tax issue. Many say lowering tax raises revenue, although nothing shown to me has proven it, nothing I've seen has disproven it. When I look at the issue one thing I consider is that taxes can be an inducement to spend. If I am a business and pay 0% taxes, adding a new employee with a 100K salary costs me $100K. Adding the same employee when I have a 35% tax rate costs me $65K (I suppose an additional 8% or so in FICA/SS). Same thing with purchases of equipment and other expenses, it reduces my marginal costs. So I find somewhat a falacy in the blanket statement that lowering taxes encourages more spending, to me it makes the cost of spending higher and thus acts as a deterant. Of course there is the very logical arguement that there is a point where taxes are so high that it acts as a deterant to investment. Who wants to take a risk in hopes of keeping 10% of the proft (that assumes a return to the draconian 90% tax rates)?

KRAM1 · April 7, 2009

My understanding is that this decrease in the withholding percentage is NOT a tax cut and NOT a rebate; the tax rates haven't changed. If so, that means a lot of people will be underwithheld, and will need to write a check to the IRS come April 15, 2010. We'll see how much they like doing that.
Can anyone confirm this?
The extra $15 or so per week certainly doesn't change my spending habits.

I believe you have it correct, sir. The folks who think they just received a tax "decrease" will definitely get a wake up call come tax time for 2009.

And, if taxes have not already been raised, what's up with that new tax on tabacco products? As a smoker, chewer, etc. if his taxes have gone up any after April 1st.

meangreenacct · April 7, 2009

My understanding is that this decrease in the withholding percentage is NOT a tax cut and NOT a rebate; the tax rates haven't changed. If so, that means a lot of people will be underwithheld, and will need to write a check to the IRS come April 15, 2010. We'll see how much they like doing that.
Can anyone confirm this?
The extra $15 or so per week certainly doesn't change my spending habits.

You are half correct. No change in tax rates and it is not a rebate. It is however a tax credit - meaning a below the line deduction in your tax bill. I believe the amounts are $400 per person/$800 couple. Your tax lability will be calculated the same way as it has in the past, however when the total tax liability is calculated - example $3000 for a couple - $800 will be deducted from that.

Just as a disclaimer, I am in no way a tax expert - I only know enough to pass that section of the CPA exam.

Censored by Laurie · April 7, 2009

You are half correct. No change in tax rates and it is not a rebate. It is however a tax credit - meaning a below the line deduction in your tax bill. I believe the amounts are $400 per person/$800 couple. Your tax lability will be calculated the same way as it has in the past, however when the total tax liability is calculated - example $3000 for a couple - $800 will be deducted from that.
Just as a disclaimer, I am in no way a tax expert - I only know enough to pass that section of the CPA exam.

So does that mean it is essentially redistributing a portion of your what would eventually amount to your tax refund throughout the year?

meangreenacct · April 7, 2009

So does that mean it is essentially redistributing a portion of your what would eventually amount to your tax refund throughout the year?

In a sense yes. As eligibility for tax credits is typically not determined by your employer, the benefit of them is typically realized when you file your taxes. In this case employers were instructed to adjust withholding so that the benefit is felt now to theoretically stimulate spending. Hence most people get about $8 additional per paycheck (52*8= approximately $400).

For Kram - no one will get a "wake up call" in 2009 due to this. They will see that after the deduction of the tax credit from their tax bill, that the withholding was correct.

forevereagle · April 7, 2009

And, if taxes have not already been raised, what's up with that new tax on tabacco products? As a smoker, chewer, etc. if his taxes have gone up any after April 1st.

My taxes didn't go up. I don't smoke or use any type of tobacco, so I don't really care about all that. If that affects anyone here, sorry, but it sucks to be you.

KRAM1 · April 7, 2009

My taxes didn't go up. I don't smoke or use any type of tobacco, so I don't really care about all that. If that affects anyone here, sorry, but it sucks to be you.

Point is...in case you missed it...Obama promised, like the old "read my lips" from Daddy Bush....NO NEW TAXES! He lied! Tax increases hurt lots of people in unexpected ways. Just because one does not smoke is a sad excuse for "not caring" about this broken promise. I don't smoke either, but the people who will be hurt by this tax increase are the very folks least able to bear it from a financial standpoint, but since smokers are "shunned" by folks who think it "sucks to be them" they will not complain...so, the government sticks it to them. "Sin" taxes are the easiest for the government to impose...those being tobacco, alcohol, etc.

Seems all a politician need do with some folks is promise to "tax someone else" and they'll get the votes...then they just turn around and tax everyone. President Obama has shown his hand early in his tenure on this one. Smoke or not...we are all going to see higher taxes. Hide and watch...I guess you thought that "extra bit of pay in your check recently" was really a tax decrease. Silly you!

KRAM1 · April 7, 2009

If you think your taxes will not go up under this administration you are smoking some "funny weed". Ha! Just keep thinking that...sounds good. Hide and watch.

UNT90 · April 7, 2009

Gas tax to follow...Alcohol tax to follow..

Wonder if that affects anyone on this board.

meangreenacct · April 7, 2009

Point is...in case you missed it...Obama promised, like the old "read my lips" from Daddy Bush....NO NEW TAXES! He lied! Tax increases hurt lots of people in unexpected ways. Just because one does not smoke is a sad excuse for "not caring" about this broken promise. I don't smoke either, but the people who will be hurt by this tax increase are the very folks least able to bear it from a financial standpoint, but since smokers are "shunned" by folks who think it "sucks to be them" they will not complain...so, the government sticks it to them. "Sin" taxes are the easiest for the government to impose...those being tobacco, alcohol, etc.
Seems all a politician need do with some folks is promise to "tax someone else" and they'll get the votes...then they just turn around and tax everyone. President Obama has shown his hand early in his tenure on this one. Smoke or not...we are all going to see higher taxes. Hide and watch...I guess you thought that "extra bit of pay in your check recently" was really a tax decrease. Silly you!

Kram - technically one would have to smoke more then 7 packs a week to have their taxes go up when factoring in the TAX CREDIT that other people have referred to in this thread, which is $400 for each worker. I'm sure there is a phase out, so if you make $150K and love your smokes, your taxes will go up.

eulesseagle · April 7, 2009

here is a small list of other taxes coming to ameriKa.

http://thebarefoot.wordpress.com/2009/03/3...-taxes-planned/

this is just the beginning.....

it may help everyone if read a little about the fabians in england.

meangreenacct · April 7, 2009

here is a small list of other taxes coming to ameriKa.
http://thebarefoot.wordpress.com/2009/03/3...-taxes-planned/
this is just the beginning.....
it may help everyone if read a little about the fabians in england.

Very interesting. Even more interesting would be if the blogger had sourced any of the "proposed" taxes to anything - even the blog of another person pulling stuff out of his butt. I could setup a blog and post the opposite, saying the government is proposing to pay you to drink soda and use batteries...it would hold the same amount of credibility as this guy.

forevereagle · April 7, 2009

Point is...in case you missed it...Obama promised, like the old "read my lips" from Daddy Bush....NO NEW TAXES! He lied!

So wait, did he create a new tax on tobacco? Maybe I missed something...

eulesseagle · April 7, 2009

Very interesting. Even more interesting would be if the blogger had sourced any of the "proposed" taxes to anything - even the blog of another person pulling stuff out of his butt. I could setup a blog and post the opposite, saying the government is proposing to pay you to drink soda and use batteries...it would hold the same amount of credibility as this guy.

just put your head back in the sand & you will feel more comfortable.

forevereagle · April 7, 2009

just put your head back in the sand & you will feel more comfortable.

UNT90 · April 8, 2009

Very interesting. Even more interesting would be if the blogger had sourced any of the "proposed" taxes to anything - even the blog of another person pulling stuff out of his butt. I could setup a blog and post the opposite, saying the government is proposing to pay you to drink soda and use batteries...it would hold the same amount of credibility as this guy.

It's common sense. Pres. Obama has to raise taxes to pay for MASSIVE spending package. Pres. Obama enacts sin tax on cigs because he can deny this is a tax hike. This tax will not be enough to pay for his spending. So, what other sin tax could be enacted? Gas and alcohol. Go to Canada and see how much these items are taxed. That is what is going to happen here.

Someone could research the Canadian tax rate. Not me. Too Lazy.

Coffee and TV · April 8, 2009

Buy cutting taxes and cutting government spending.

You mean cut back on social security and medicare just as baby boomers start hitting the qualifying ages? Good luck on that one, I think you have a better chance of being an astronaut on the next moon mission. And hey since you advocate cutting spending, let's start with the defense department. Instead of cold war defense weaponry, we could use a more tactical (and less expensive) military considering the current enemies.

Coffee and TV · April 8, 2009

It's common sense. Pres. Obama has to raise taxes to pay for MASSIVE spending package. Pres. Obama enacts sin tax on cigs because he can deny this is a tax hike. This tax will not be enough to pay for his spending. So, what other sin tax could be enacted? Gas and alcohol. Go to Canada and see how much these items are taxed. That is what is going to happen here.
Someone could research the Canadian tax rate. Not me. Too Lazy.

The tobacco tax is purely for SCHIPS. Its purpose is not intended for crop subsidies or debt interest.

UNTflyer · April 8, 2009

Nevermind that we had two deep tax cuts under Bush and our deficeit shot up exponentially.

One had nothing to do with the other. Taxes were cut and we hit record revenues. It was the spending that caused the deficit.

UNTflyer · April 8, 2009

So if we want to raise revenue by lowering taxes, how low do we go?

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point.

Edited April 8, 2009 by UNTflyer

meangreenacct · April 8, 2009

just put your head back in the sand & you will feel more comfortable.

Dude - I'm not saying there aren't plans to raises taxes. I'm just saying if you are going to post something it would be nice if it had one shred of evidence supporting it. I work with people who deal with these issues every day. If the tax claims that are in that link were serious proposals I can guarantee either my clients or my coworkers would be bringing them up.

UNTflyer · April 8, 2009

The tobacco tax is purely for SCHIPS. Its purpose is not intended for crop subsidies or debt interest.

Hahaha! Just like Social Security taxes are purely for social security?

Coffee and TV · April 8, 2009

One had nothing to do with the other. Taxes were cut and we hit record revenues. It was the spending that caused the deficit.

You think that 1.3 trillion in tax cuts had nothing to do with the deficit? Really?

Record revenues because there was a record amount of people working because there was a record amount of people in the United States.

In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point.

Smoot-Hawley is not a good example of raising taxes. That act was passed with protectionism in mind, not raising revenues. The problem that incurred was that there was retaliation by other countries and imports plunged. Its a different ballgame than anything being proposed currently.

Hahaha! Just like Social Security taxes are purely for social security?

I didn't say they don't go into the same pot, I'm just saying that was the intention. Hell with the elimination of pay-go by the 'conservatives' who ran Congress for 12 years, it was a borrow and spend bonanza. At least with the sin tax there's the idea that something is covering it.

Edited April 8, 2009 by Coffee and TV