GOP hopefuls’ tax plans don’t give average Americans anything to be happy about (Washington Post)

[웃 910]

It's very simple, just learn these equations:

GOP = Big deficits + Tax cuts primarily helping the super rich + Not helping the poor and middle class + Maybe a war or 2

DEM = Small deficits or surpluses + No tax cuts primarily helping the super rich + Helping the poor and middle class + Maybe a war or 2

GOP hopefuls' tax plans don't give average Americans anything to be happy about

When Texas Gov. Rick Perry unveiled a tax plan Tuesday, there was some hope that he would deliver viable tax reform and distinguish himself from his Republican presidential rivals.

No dice.

Perry's plan— like those plans of former Massachusetts governor Mitt Romney and former Godfather's Pizza chief executive Herman Cain — is deeply disappointing when measured against the triumvirate of good tax-policy principles: fairness, simplicity and the ability to raise sufficient revenue.

Although Perry and Cain certainly get points for boldness for suggesting an entirely new tax system, their plans fall woefully short on all three criteria generally embraced by tax experts. Romney's approach is more conventional and simply tweaks the current baffling tax code — but without any major improvements.

Everyone from corporate executives to small-business owners to average Americans is studying the proposals and their distributional effects to try to divine how they would be affected by the changes. Would the emphasis on flattening and simplifying the tax code help the wealthier more than the middle class, as many experts are predicting? And is this rush to reduce tax rates a thinly veiled effort to starve government programs by reducing the long-term revenue flow as a percentage of the economy? Here's a snapshot of the "Big Three" GOP tax plans:

● The Perry plan offers taxpayers the choice of paying under the current federal tax system, or under a new flat tax of 20 percent that would be applicable to all individuals, no matter what their income.

Those opting for the flat tax system would pay no taxes on capital gains, dividends, interest and Social Security. They would still get to deduct mortgage interest, charitable donations and state and local taxes, and their standard deduction would be bumped up to $12,500 from the current $11,600.

For all taxpayers, no matter which system they opt for, the Perry plan scraps the estate tax. The corporate tax would drop from today's top rate of 35 percent to 20 percent.

●Cain's "9-9-9" plan would scrap the current tax code and introduce a 9 percent business tax, 9 percent individual income tax and 9 percent national sales tax. Taxpayers living below the poverty line would be excused from the individual income tax.

●Romney's plan extends the Bush-era tax cuts, preserving today's top marginal income-tax rate of 35 percent rather than allowing it to jump to 39.6 percent, as it is scheduled to do next year. It scraps the estate tax. And for taxpayers earning less than $200,000 a year, there would be no taxes on capital gains, dividends or interest. The plan would also lower the corporate tax to 25 percent.

When it comes to fairness — defined as distributing the tax burden according to who can afford to pay it — the Cain plan gets the lowest grade. That's because it would give massive tax cuts to the wealthy and tax increases to any taxpayer with annual earnings above the poverty line and below $200,000 a year.

The biggest increase in the tax burden would be for those earning between $40,000 and $50,000. They would pay $4,399 more in taxes annually, according to an analysis by the nonpartisan Tax Policy Center. A couple with the median family income of about $60,000 would incur a $4,326 increase.

Anyone earning $200,000 or more in annual income could bank on a tax cut. A $3 million-a-year earner's annual tax bill would decline by about $455,000. Someone earning $7.9 million would see about a $1.4 million drop in his or her taxes.

Some middle-income taxpayers might reap a benefit under Romney's plan if they realize capital gains, dividends or interest. Romney would render those gains tax-free. But that would do little to help the middle class, because investment income for that group of taxpayers is typically minimal. Compared with the benefit the wealthy would get under Romney's plan from an elimination of the estate tax, Romney is essentially throwing the middle class a few bones.

As for Perry's plan, the Texan shrewdly immunized himself against criticism that he was proposing to raise taxes on any group by offering folks the option of paying under the current system.

There would be no "losers" under the first option, but there would be a limited number of "winners" under the second option. That's because, under the best-case scenario, only individuals or families with gross earnings of upward of $200,000 a year would reap a benefit.

At that taxable income threshold of $150,000 (which is income minus deductions), the effective tax rate is 20 percent, which is the same as Perry's flat tax rate. So anyone with taxable income of more than $150,000 would see a higher-than-20 percent effective rate under the current system, and they would opt to pay the flat tax, says Jeff Lancaster, a principal at Bingham, Osborn and Scarborough in San Francisco.

"He's not raising taxes on anyone — just lowering them for people with more than $150,000 of taxable income," Lancaster says.

And even though Perry bills his plan as refreshingly simple — anyone paying under the flat-tax system need only file on a postcard, he likes to point out — it is anything but that. By giving taxpayers an option of whether to pay under the current or flat-tax systems, he would maintain the complexities of the current tax system and layer an entire new tax system on top of it. That would hardly be an improvement.

As for Romney's plan, it's as dense and complicated as the current system, because he only makes some changes on the margins. His central changes are to eliminate capital-gains taxes on taxpayers earning less than $200,000 and to repeal the estate tax.

Cain's plan appears simple, but think again. "Would it be difficult to file taxes? No," says Michael Linden, director for tax and budget policy of the Center for American Progress.

But if simplicity is defined partly by transparency, "the plan is misleading," Linden says.

The 9 percent business tax isn't ultimately paid by businesses, as its name suggests. It works like a value-added tax, a levy that passes down the supply chain of any item's production and is ultimately embedded in prices. "It is essentially borne by consumers but doesn't show up on their tax return," Linden says, pointing out that the 9-9-9 plan is essentially a 27 percent tax paid by individuals.

Revenue, meanwhile, is the whole point of having a tax system, but none of the Republican plans would raise revenue matching the current tax system's $4.6 trillion, which some argue isn't even enough.

Details of the various plans' revenue haven't been released. The only plan that actually raises taxes is Cain's — on the middle class — but his massive tax cuts for the wealthy would far outweigh any added revenue collected from the middle class.

Clearly, any tax plan will have to include compromises when it comes to fairness, simplicity and revenue.

"These criteria are often in conflict with each other," says Chris William Sanchirico, a Samuel A. Blank professor of law, business and public policy at the University of Pennsylvania.

"For example, simplicity may be in conflict with fairness. As soon as you want to key tax liability to people's ability to pay, then you have to look for indications of people's ability to pay, and all of a sudden it becomes quite complicated," Sanchirico says.

Still, the average American ought to be miffed at the Republican candidates' push for major tax changes that would do little for them while helping the nation's wealthiest taxpayers.

No dice.

Hube is a columnist for The Fiscal Times, an independent news organization that provides original reporting and analysis on fiscal and economic matters.

http://www.washingto...NMPM_print.html

Edited November 1, 2011 by Lord Infamous

[Hilarious Clinton 452]

In 2002, Lili Tuggle-Weir found her dating options were limited.

The Montgomery Village native was a freshman at Ringling College of Art and Design in Sarasota, Fla., and only three of her fellow photography majors were guys. One had a girlfriend. One was gay. And one was Andrew Koswaski.

Semester after semester, the two shared classes together and not much else. But senior year, a friend of Tuggle-Weir’s who was also a skateboarding buddy of Koswaski’s started bringing him around regularly. Skateboarding held little allure for Tuggle-Weir, but the more time she spent with Koswaski, the more they connected. What appealed to her, she says, was “the fact that I couldn’t predict him — we didn’t wear the same thing, we didn’t do the same thing.” But, says Koswaski, “overall, our personalities were kind of similar, so we were willing to try new things around each other.”

In spring 2006, Tuggle-Weir spent a weekend visiting her grandmother in Orlando; Koswaski was nearby on a family trip and agreed to give her a ride back to school. He had never missed a class, but she persuaded him to play hooky. They stopped at Dinosaur World, a quirky roadside attraction, and went to a movie. “It was fun,” she remembers. “We balanced each other, and he was willing to be slightly goony with me.”

After their road trip, they began to hang out together. But though Tuggle-Weir wanted their growing friendship to turn into a relationship, she wasn’t sure if Koswaski felt the same way — until Pluto stepped in. The costumed canine started playfully trying to get her attention while the two were visiting Disney World.

Pluto “started doing the ‘No, come with me’ thing that the characters do. And [Koswaski] got really upset!” Tuggle-Weir recalls. “He grabbed my hand and pulled me over the Bridge of Tomorrowland and said ‘You’re here with me !’”

From then on, there was no question that they were a couple. After graduation, they embarked on a five-week, cross-country road trip in Tuggle-Weir’s yellow Volkswagen Beetle. “We could go 100 miles and just listen to music,” Tuggle-Weir says. “He was okay with me being really nerdy about music, and I was okay with stopping every 45 minutes ’cause there was a ditch he wanted to skate or a half-pipe somewhere.”

But the two had separate post-college paths in mind: Koswaski had plans to pursue snowboarding photography in Colorado, while Tuggle-Weir had a music photography gig lined up in London.

They agreed to take a break, but time apart only strengthened their commitment to each other. “She was definitely always in the back of my mind,” Koswaski says.

“We went and did our separate things and decided it wasn’t worth doing if he wasn’t there and I wasn’t there,” Tuggle-Weir says. So after a year, they both packed their bags and moved, first to Tennessee, then to Florida, starting their own online graphic design business along the way.

In Florida, they found jobs and spent their weekends visiting Tuggle-Weir’s grandmother, who had cancer. Koswaski would watch television and talk with the ailing woman for hours — something that endeared him to Tuggle-Weir’s family. “He was there for the long haul, and he showed that he was willing to step up, which I already knew, but everybody else got to see,” she says.

The idea of marriage came up more often as she developed an infatuation with wedding TV shows. “It was really intriguing to me to look at all these people and see how a complete stranger would visualize the same event,” she says. The artistic planning and elaborate decorations in the shows opened up a hypothetical wedding dialogue for the couple that then turned serious.

“It eventually just got to the point where we knew we were gonna be together forever,” says Koswaski, now 27. “She knows me better than I know myself, which is scary. She kind of puts me on the right path when I’m not sure about things.”

In January 2010, he got permission and her grandmother’s ring from Tuggle-Weir’s parents. The following April, on another trip to Disney World, his plan to pop the question during a fireworks show was ruined by a rainstorm. Instead, he managed to coax her into getting ice cream. As they ate in a gazebo, he turned to her and — inspired by a line from the movie “Pirate Radio” — presented the ring and asked: “How ’bout it, then?”

“I didn’t know what to say, so I just hit him in the arm,” she says.

On Oct. 8, the couple wed at the Shrine of St. Jude in Rockville. The ceremony was followed by an Alice in Wonderland/Mad Hatter-themed reception at Brookside Gardens, complete with ceramic bunnies, a swing band and flashlights for guests to find their way out of the rabbit hole. The two are holding off on a honeymoon until next August, when they will visit the 2012 Olympics in London.

As for why their relationship works, “I think it’s because no matter what we do . . . I know we’re not gonna be bored,” Tuggle-Weir, 27, explains. “The two of us are gonna make it fun, and that’s something I want to do every day.”

http://www.washingtonpost.com/lifestyle/weddings/on-love-lili-tuggle-weir-and-andrew-koswaski-wed/2011/10/10/gIQAHym8PM_story.html

[SMR 368]

In 2002, Lili Tuggle-Weir found her dating options were limited.

The Montgomery Village native was a freshman at Ringling College of Art and Design in Sarasota, Fla., and only three of her fellow photography majors were guys. One had a girlfriend. One was gay. And one was Andrew Koswaski.

Semester after semester, the two shared classes together and not much else. But senior year, a friend of Tuggle-Weir’s who was also a skateboarding buddy of Koswaski’s started bringing him around regularly. Skateboarding held little allure for Tuggle-Weir, but the more time she spent with Koswaski, the more they connected. What appealed to her, she says, was “the fact that I couldn’t predict him — we didn’t wear the same thing, we didn’t do the same thing.” But, says Koswaski, “overall, our personalities were kind of similar, so we were willing to try new things around each other.”

In spring 2006, Tuggle-Weir spent a weekend visiting her grandmother in Orlando; Koswaski was nearby on a family trip and agreed to give her a ride back to school. He had never missed a class, but she persuaded him to play hooky. They stopped at Dinosaur World, a quirky roadside attraction, and went to a movie. “It was fun,” she remembers. “We balanced each other, and he was willing to be slightly goony with me.”

After their road trip, they began to hang out together. But though Tuggle-Weir wanted their growing friendship to turn into a relationship, she wasn’t sure if Koswaski felt the same way — until Pluto stepped in. The costumed canine started playfully trying to get her attention while the two were visiting Disney World.

Pluto “started doing the ‘No, come with me’ thing that the characters do. And [Koswaski] got really upset!” Tuggle-Weir recalls. “He grabbed my hand and pulled me over the Bridge of Tomorrowland and said ‘You’re here with me !’”

From then on, there was no question that they were a couple. After graduation, they embarked on a five-week, cross-country road trip in Tuggle-Weir’s yellow Volkswagen Beetle. “We could go 100 miles and just listen to music,” Tuggle-Weir says. “He was okay with me being really nerdy about music, and I was okay with stopping every 45 minutes ’cause there was a ditch he wanted to skate or a half-pipe somewhere.”

But the two had separate post-college paths in mind: Koswaski had plans to pursue snowboarding photography in Colorado, while Tuggle-Weir had a music photography gig lined up in London.

They agreed to take a break, but time apart only strengthened their commitment to each other. “She was definitely always in the back of my mind,” Koswaski says.

“We went and did our separate things and decided it wasn’t worth doing if he wasn’t there and I wasn’t there,” Tuggle-Weir says. So after a year, they both packed their bags and moved, first to Tennessee, then to Florida, starting their own online graphic design business along the way.

In Florida, they found jobs and spent their weekends visiting Tuggle-Weir’s grandmother, who had cancer. Koswaski would watch television and talk with the ailing woman for hours — something that endeared him to Tuggle-Weir’s family. “He was there for the long haul, and he showed that he was willing to step up, which I already knew, but everybody else got to see,” she says.

The idea of marriage came up more often as she developed an infatuation with wedding TV shows. “It was really intriguing to me to look at all these people and see how a complete stranger would visualize the same event,” she says. The artistic planning and elaborate decorations in the shows opened up a hypothetical wedding dialogue for the couple that then turned serious.

“It eventually just got to the point where we knew we were gonna be together forever,” says Koswaski, now 27. “She knows me better than I know myself, which is scary. She kind of puts me on the right path when I’m not sure about things.”

In January 2010, he got permission and her grandmother’s ring from Tuggle-Weir’s parents. The following April, on another trip to Disney World, his plan to pop the question during a fireworks show was ruined by a rainstorm. Instead, he managed to coax her into getting ice cream. As they ate in a gazebo, he turned to her and — inspired by a line from the movie “Pirate Radio” — presented the ring and asked: “How ’bout it, then?”

“I didn’t know what to say, so I just hit him in the arm,” she says.

On Oct. 8, the couple wed at the Shrine of St. Jude in Rockville. The ceremony was followed by an Alice in Wonderland/Mad Hatter-themed reception at Brookside Gardens, complete with ceramic bunnies, a swing band and flashlights for guests to find their way out of the rabbit hole. The two are holding off on a honeymoon until next August, when they will visit the 2012 Olympics in London.

As for why their relationship works, “I think it’s because no matter what we do . . . I know we’re not gonna be bored,” Tuggle-Weir, 27, explains. “The two of us are gonna make it fun, and that’s something I want to do every day.”

http://www.washingtonpost.com/lifestyle/weddings/on-love-lili-tuggle-weir-and-andrew-koswaski-wed/2011/10/10/gIQAHym8PM_story.html

Is this an analogy for the current GOP primary? Or is this just completely off topic?

[SMR 368]

In response to the original post:

In regards to Cain's plan on a corporate tax, how is this different (other than the fact that it's 35% -deductions instead of 9%) than the current corporate tax which is also eventually passed on to consumers?

In regards to Romney's plan, how is it worse for low income than the status quo? It's the same rate as the Obama tax cuts. And it includes a capital gains tax cut for ordinary Americans, which means anybody saving for retirement can do so tax free. Isn't that a good thing?

[mawilson 2,133]

It's very simple, just learn these equations:

GOP = Big deficits + Tax cuts primarily helping the super rich + Not helping the poor and middle class + Maybe a war or 2

DEM = Small deficits or surplusesEven bigger deficits + No tax cuts primarily helping the super rich + Helping the poor and middle class + Maybe a war or 2

Fixed that for you.

[Mr. Big Dog 10,747]

What is it with you guys voting against your own best interests?

It's called masochism.

mas·och·ism - noun

2: pleasure in being abused or dominated : a taste for suffering

[Dan J 277]

In response to the original post:

In regards to Cain's plan on a corporate tax, how is this different (other than the fact that it's 35% -deductions instead of 9%) than the current corporate tax which is also eventually passed on to consumers?

In regards to Romney's plan, how is it worse for low income than the status quo? It's the same rate as the Obama tax cuts. And it includes a capital gains tax cut for ordinary Americans, which means anybody saving for retirement can do so tax free. Isn't that a good thing?

Tax increases on corporations may get passed on to consumers if they are in an industry that is not price sensitive. There are industries in which passing on a price increase will definetly result in lower sales. Which may make paying higher taxes out of profit, better than dealing with losses due to lower sales.

[slim 1,530]

Tax increases on corporations may get passed on to consumers if they are in an industry that is not price sensitive. There are industries in which passing on a price increase will definetly result in lower sales. Which may make paying higher taxes out of profit, better than dealing with losses due to lower sales.

Taxes will always be passed onto the customers. That's why taxing businesses is stupid.

[Usui Takumi 1,562]

Taxes will always be passed onto the customers. That's why taxing businesses is stupid.

Actually the situation with the FAA shows this not to be the case...prices are based on what the market will pay sometimes independent of taxes.

Edited November 1, 2011 by Sousuke

[Mr. Big Dog 10,747]

Actually the situation with the FAA shows this not to be the case.

Actually, what the recent situation with the FAA showed was that tax relief on corporations doesn't trickle down to the consumer. Taxes go up, they get passed down as price increases to the consumer. Taxes go down, profits go up and prices stay unchanged. It's a one-way street.

[dalegg 143]

Fixed that for you.

Maybe Obama isn't a Democrat?

[mawilson 2,133]

Maybe Obama isn't a Democrat?

Don't see any surpluses coming from him, that's for damn sure.

[Gary and Alla 3,694]

I thought Dems want everyone to pay a fair share? Who is not paying a fair share?

I, for one average American, am very please to see that someone is fianlly offering to fix our broken system of revenue raising so we can go forward with other things. Charging more on the government credit card and expecting half the people to pay the tab just isn't going to work