Why does everybody worry so much about tax cuts/raises?

[MrSoul]

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what if every dairy wants to charge 20/gallon for milk?
there has to be something to stop industries from jacking up prices on things

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I live in Pennsylvania. The Commonwealth regulates the price of three things: tobacco, alcohol, and milk. They don't prevent dairies from charging higher prices, they prevent dairies from charging lower prices. We currently spend around $3 per gallon of milk. They give us a line that the price floor protects poor Pennsylvanian dairy farmers which is true, but at the expense of Pennsylvanian consumers. The milk could just as easily be imported from other states, or other countries for that matter.

Government control on prices, although well intended, have had devastating consequences. The oil shortage of the 70's; price control. California energy "crisis" in 2000 (as vulturesrow pointed out); price control. Housing shortages in New York City; price control. High unemployment rates; price control. The flu vaccine shortage that we are currently witnessing; price control. I could give endless examples here, but I think my point is clear. We are better off allowing market forces to set prices.



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we stop the govt waste (money used as litter example)...they are the most inefficient users of money

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Good point. Here's my solution.
Eliminate the following departments:

1) Agriculture
2) Commerce
3) Education
4) Energy
5) Health
6) Homeland Security
7) Housing
8) Interior
9) Labor
10) Transportation
11) Veterans' Affairs

[lastchance]

A lot of people don't have the money to pay for some of this stuff. Yes, the government is overinflated and probably should be cut back. But I also believe taxes should be RAISED, because you have to pay for things, surprisingly enough. But I think people deserve to have health care, education, and some other things without paying quite a bit of money for them. Most private schools and medical care is definitely not cheap. There are benefits to most of the programs we pay due to taxes. The key is how to make these programs better, and of course, eliminating some programs.

I don't believe in setting price controls, but I do believe in the government using taxes to pay for certain things, like the Police, the Fire Department, Defense, all things that we should pay for. That's what it comes down to, paying for services. And the government does force taxes because there are some things that benefit a lot of people. They must be paid for.

[Rooster71]

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For the middle class, the tax cuts were very small, maybe a few hundred or thousand dollars...

But while those were cut, health care premiums go up 54%! I'm more worried about paying an extra 100/month (1200/year) for health care than $500 tax savings

And there are many more things rising than just health care...so why is it that taxes are the biggest deal (at least with taxes, u don't ever even see the extra money being taken out, whereas with health coverage, etc it goes out of ur monthly budget, straight from ur checking account, where u could actually see it and even spend it if not for that higher premium)


also, all anybody has to do is start a home-based business as a sole proprietor doing whatever (or nothing, really) and then show a loss, thus making more of their real income tax-free...u can't do that with health care coverage or rising college tuitions or gas prices

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You have a very good point. I believe that the reason we hear so much about tax cuts/raises is because taxes are one of the two major planks of the Bush platform (terrorism being the other). If Bush wasn't able to rail on and on about his tax cuts, he would lose support. Very few people seem to notice that the tax cuts he provided are miniscule to the average American.

[Rooster71]

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jake, do u want airlines to be able to charge us 1k each way for a 300 mile trip because there is no way to stop the industry from jacking up the prices together?

do u want ur power company charging u $4/kilowatt?

what if every dairy wants to charge 20/gallon for milk?

there has to be something to stop industries from jacking up prices on things



and we could lower taxes and provide more services if:

a) we spent less on military (the next closest country only spends <10billion on military a year)

b) we stop the govt waste (money used as litter example)...they are the most inefficient users of money

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Industries "jacking up prices" is not the problem. Market forces take care of that, for the most part. However when someone says that market forces are the answer to all economic issues, they are extremely short-sighted. Even a large number of these people would be crying for government intervention if gasoline were to reach $6-8/gallon.

[natedogg]

To quote my favorite VP candidate, there are so many inaccuracies here it's hard to know where to begin.

For the middle class, the tax cuts were very small, maybe a few hundred or thousand dollars...

Are you implying that since the cut was small (to you) that these people don't deserve the cut?

But while those were cut, health care premiums go up 54%! I'm more worried about paying an extra 100/month (1200/year) for health care than $500 tax savings

You are presenting a false dichotomy. It's not like failing to cut taxes would somehow have eliminated the rise is health care costs. They are unrelated.


And there are many more things rising than just health care...so why is it that taxes are the biggest deal (at least with taxes, u don't ever even see the extra money being taken out, whereas with health coverage, etc it goes out of ur monthly budget, straight from ur checking account, where u could actually see it and even spend it if not for that higher premium)

You are proof positive that witholding is just a scam to keep the masses complacent about their oppressive tax burden. Just because you don't have to write the check yourself makes it somehow more bearable? Out of sight out of mindis somehow better? How sad.

By the way, most employers offer a plan that lets you pay for your health care pretax.

also, all anybody has to do is start a home-based business as a sole proprietor doing whatever (or nothing, really) and then show a loss, thus making more of their real income tax-free

No. Trust me. I do this myself and you need real income for the business in order to get much benefit from it. Schedule C losses are not deducted from your W2 income. If your income is all W-2 you have precious few options. That's why the tax cut for the middle class is actually a good thing.

...u can't do that with health care coverage or rising college tuitions or gas prices

Well, yes, you can definitely do that with college tuition if you plan properly, and the same goes for health care. Get a high deductible plan and open a medical savings account. That's what I did. Then all your non-covered costs are tax deductible. And like I said, most group plan premiums are paid pre-tax, withheld by your employer.

I get the sense your real concern is that the high-income earners got a tax break TOO. Let's put it this way:

Joe earns $1 MIL and pays $400K in income tax. Bob earns $50k and pays $5k in income tax.

If you are going to cut taxes on Bob, why doesn't Joe get a break too? Joe is in fact more heavily burdened by the current tax rate.

(Yes, I realize most people with Joe's income hide it all and end up paying a lower tax rate in the end than Bob - see John Edwards for a good example, but the principle is that Joe's tax rate is already much higher than Bob's so it's only fair to cut him a break too.
But the left, which are really a bunch of communists, are infuriated by the very concept of rich people, much less treating them equally)

I'm not a rich person. But I understand fairness better than the communists.

natedogg

[MrSoul]

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However when someone says that market forces are the answer to all economic issues, they are extremely short-sighted. Even a large number of these people would be crying for government intervention if gasoline were to reach $6-8/gallon.

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Market forces would prevent gasoline from reaching $6-8/gallon.

[EarlCat]

So high taxes are okay as long as you don't see the money being taken out???

[EarlCat]

Here's the problem with a graduated income tax.

First, the tax is on income, not wealth. This means that wealthy people who don't generate an income don't have any tax burden, while average people who might receive a much-needed windfall do.

Case in point. A husband and wife get a small business loan for $100,000 to open a corner store. The business does fairly well, the family is able to pay off the loan over 10 years and still pull a yearly salary of $30,000--middle class. After that 10 years, they decide to sell the business. Their hard work over the last decade has payed off and the business for about $250,000 (not unreasonable for the yearly income it generates).

All of the sudden our middle-class working family finds themselves in the top tax bracket. That year they literally end up paying more in taxes than they brought home the last 4 years! Are they rich? By no means. But the idea that this family wouldn't benefit from a so-called "tax cut for the rich" is ludicrous. Unfortunately, there are certain politicians out there that believe taxes should be raised on anyone who earns more than $200,000 in a given year.

Just something to think about.

[Rooster71]

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However when someone says that market forces are the answer to all economic issues, they are extremely short-sighted. Even a large number of these people would be crying for government intervention if gasoline were to reach $6-8/gallon.

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Market forces would prevent gasoline from reaching $6-8/gallon.

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There are many factors that influence the price of gas. There is no way to know what the price may or may not be at any time in the future. Since you provide no information to support your claim, I assume you are just blowing smoke and have little or no knowledge of the subject.

[adios]

Supply and demand don't have a major impact on gasoline prices? Sure we believe you and the burden of proof is in you to validate the claim that supply and demand don't have a major impact on gasoline prices. BTW supply and demand are market forces.