NOTES:
Last blog I made "laudatory" reference to Child Tax Credit for $110,000 income earners. It was meant to question the Credits going to this level, and above, income earner. Taxes information and comparisons were made using current 2007 tax levels. IRS, Wikepedia, Census Bureau sites provided base informations. Some interpolation was implemented to move 2006 base information to 2007 plausible amounts. Only a few figures were offered though actual applications embraced incomes from $12,000 through one millions dollars. At least two levels of income for each quintile (average incomes expressed in fifths of average incomes)
more tax credits
Tax credits are frequently given to partially address expensive facets of budget experience that frequently far exceeds annual costs of living or projected inflation levels. Two significant family credits are related to education and health or health insurance. These credits certainly can reduce some of the negative impact created in these areas. The primary problem is that there is little, if any, amounts available for lower income earners. Many can barely cover ordinary household budgetary amounts. Tax credits or programs helpful to address health, higher education and retirement account programs are not within their capability. It is like offering rental credits to the homeless. This does not mean that income earners that gain from these credits are not burdened by these high costs. It does suggest that those income groups most in need are in no position to capitalize on these credits.
Many individuals and corporations express the concept that lowering the burden of high income taxpayers and corporations will benefit working people in creating more employment and competing in the global market. They are not against tax credits. They endorse the 15% capital gain rate that are applicable on equity income and hedge funds. There are many ways of treating income that should be taxable as ordinary income at special rates. They do not mind credits for certain industries and other industries excluded from paying taxes or paying rents on assets that belong to the public.
Government involvement in health or education is EVIL while government support of business or sustaining and increasing the wealth of the highest income earners is desired.
Education
US corporations continue to suggest the need to allow more educated and trained immigrants into the United States.
When looking at the statistics based on income, education and race there is a definite correlation
of income and education. Asians are highest with Caucasian, black and Latinos last.
This does not suggest the intellect or capacity for knowledge favorable or unfavorable within any race. The opposite should point to a problem within our society that must be addressed. Tests that could reasonably
illustrate basic intelligence equivalent in all races. A normal distribution curve would equally
apply to all races.
Are more Asians and Caucasians going to college because parents believe education opportunities are necessary and attainable for their children?
Are many children not going to college because their parents do not believe that they or their children can afford college.?
Have we served our children, our society or our country? If we as parents cannot believe higher education is possible and attainable for all, then higher education will not be possible or attainable for all. Education should not be entirely free. There should be a responsibility of reasonable financial obligation. There must be the responsibility of
preparing yourself or your children in the discipline necessary to achieve success in any level of
life pursuits.
Your responsibility then is believing in your self and your children.
Reasonable health and education opportunities should be available to all.
Sunday, October 14, 2007
Wednesday, October 10, 2007
Give them Credit
Manipulating the public
The tax credit has been the most useful tool for the government to support or subsidize those areas that they decide are functions of the Government. Frequently the original or stated purpose is buried by consequences of the results.
Itemized deductions were originally presented as a device to promote home ownership. As with most tax credits or deductions, the principal beneficiaries are the taxpayers with the highest income. Due to Standard Deduction amounts few taxpayers benefit to any discernible degree until they are in and above the fourth quintile of income. That is above $70,000 annual income.
The gain, if any in the lower half of average income normally is less than ten percent of the itemized amounts. At the upper end they save around thirty percent. A head of household Illinois resident might save around $1,100 from an annual income of $60,000. The HH Illinois resident earning $300,000 would save around $22,500. Five times the earnings gains twenty times the benefits.
If a taxpayer pays $10,000 for state taxes, should the Federal Government reward them $3,000 in tax credits for this liability. A high income taxpayer with a mortgage of 6.5% ends up as the equivalent of around 4.5%. Most taxpayers are led to believe that the Itemized deduction facet is there for their benefit. I think we can state that if there were no itemized deductions we would not find Murdoch or Trump living in FEMA trailers.
Certainly lost would be the deduction from charitable deductions. A significant number of taxpayers have contributed a considerable amount of money and will continue to do so when they think the occasion is important. Many wealthy individuals and businesses have contributed and will continue to contribute regardless of tax adjustments.
The individuals and businesses that might be affected could still give around 70 percent. They could call in the photographers and media. They could tell them what a great person/business they are, hand them a plaque and they would be satisfied.
Tax changes will be suggested and hopefully equitable changes will be made. The legislators love to point out the complexity of applying and regulations regarding compliance in filing. These are almost always inferring as a part of the IRS. These complexities and thousands of pages were not caused by the IRS. They became the necessary result of all the individual and corporate tax credits passed by the legislators.
Earned income credit and Child tax credit.
The earned income credit proposed during Gerald Fords administration was purported to move people away from welfare to employment. Certainly must credit significant success in its initial form. Candidates frequently suggest increasing the EIC as something for the general public good. This was not enough so they added the Child Tax Credit and additional child tax credit.
My perspective suggest that the EIC has been a significant factor in wage stagnation. The businesses could not discriminate in salary regarding the family obligation of the employee. The Government chose to do this for them. The employee with eligible children could frequently end up with $6,000 and more net than the single or married without children. There is no tax obligation, they and their employer do not contribute to Social Security.
I have heard on more than one occasion the suggestion that low-paying business such as Wal-Mart, restaurants and other small businesses do not lack in employment applications. They also point out the benefits from EIC and other programs.
They do not ask where these benefits come from. That is: who pays the piper. Those businesses that rely on Federal and state programs to compensate for their traditional inadequate pay. If this cost is not passed on to the consumers of the products and services of these companies it must come out of the taxes from the individuals and businesses that do pay equitable salaries. That is if the other companies and individuals have to pay additional amounts to "subsidize" the other companies than there company is passing on to their customers the cost generated by others.
Specifically to be applauded is the Child Tax Credit and additional child tax credit. There are some application rules that limit the additional child tax credit in the lowest end of income. There are no restrictions to the married filing jointly until there income exceeds $110,000. Head of households have adjustments after $75,000 income.
I sometimes question the Head of household tax differencials. I usually forget the "head of household" discounts. The government hands out these "head of household" discounts so when you pay your rent, utilities food and other costs you get this equalizing discount.
There is no argument that the base minimum pay is not sufficient to defray the minimum costs of shelter, food, clothing and other household expenses. The question has to be asked "Why Not! When an individual is willing to work full time in any area of employment, it should be expected that they should be able to afford basic needs. At what point should the government subsidize them for choices that may have been made related to the size of the family and typs of expenses they incur.
Many work full time, sometimes another part time job and give their children the love and attention so important to their development. Some pay that additional money to get their tax return check within a couple days. The money may be gone within the month but they have their High Definition Tv, for example, or have paid off the "payday loans" and penalties accrued.
Due to divorce, the loss of a spouse, and other factors, a financial burden has been placed upon many ouside of the current means to defray current costs. What is the responsibility of Government and the responsibility of the parent.
The ability and eagerness to procreate should not be the base for aiding the family. Adequate wages, reasonable health and education cost ( wouldn't that be nice) should be part of the benefits expected from the business and the state and federal government.
The last increase in minimum wages was met (through coercian) with a requirement that tax credits are part of the package. These tax credits were no way assured that they would benefit the so-called businesses that were affected by the increase in minimum wages. The population of the States that paid less than the proposed increase of minimum wages was around 39 percent. Since these business taxes did not differenciate between the state and targeted business this was just another national tax credit caused by lazy or cowardly legislatures.
At some time we will have to address the base of income, taxation and credits. It is not fair to the public or consumer of a goods or product to not pay the direct and indirect cost. It is certainly not fair for the income and tax liabilty of other businesses to be taxed to compensate for the inadequacy of the original businesses.
This is a base for a "false" economical structure.
The tax credit has been the most useful tool for the government to support or subsidize those areas that they decide are functions of the Government. Frequently the original or stated purpose is buried by consequences of the results.
Itemized deductions were originally presented as a device to promote home ownership. As with most tax credits or deductions, the principal beneficiaries are the taxpayers with the highest income. Due to Standard Deduction amounts few taxpayers benefit to any discernible degree until they are in and above the fourth quintile of income. That is above $70,000 annual income.
The gain, if any in the lower half of average income normally is less than ten percent of the itemized amounts. At the upper end they save around thirty percent. A head of household Illinois resident might save around $1,100 from an annual income of $60,000. The HH Illinois resident earning $300,000 would save around $22,500. Five times the earnings gains twenty times the benefits.
If a taxpayer pays $10,000 for state taxes, should the Federal Government reward them $3,000 in tax credits for this liability. A high income taxpayer with a mortgage of 6.5% ends up as the equivalent of around 4.5%. Most taxpayers are led to believe that the Itemized deduction facet is there for their benefit. I think we can state that if there were no itemized deductions we would not find Murdoch or Trump living in FEMA trailers.
Certainly lost would be the deduction from charitable deductions. A significant number of taxpayers have contributed a considerable amount of money and will continue to do so when they think the occasion is important. Many wealthy individuals and businesses have contributed and will continue to contribute regardless of tax adjustments.
The individuals and businesses that might be affected could still give around 70 percent. They could call in the photographers and media. They could tell them what a great person/business they are, hand them a plaque and they would be satisfied.
Tax changes will be suggested and hopefully equitable changes will be made. The legislators love to point out the complexity of applying and regulations regarding compliance in filing. These are almost always inferring as a part of the IRS. These complexities and thousands of pages were not caused by the IRS. They became the necessary result of all the individual and corporate tax credits passed by the legislators.
Earned income credit and Child tax credit.
The earned income credit proposed during Gerald Fords administration was purported to move people away from welfare to employment. Certainly must credit significant success in its initial form. Candidates frequently suggest increasing the EIC as something for the general public good. This was not enough so they added the Child Tax Credit and additional child tax credit.
My perspective suggest that the EIC has been a significant factor in wage stagnation. The businesses could not discriminate in salary regarding the family obligation of the employee. The Government chose to do this for them. The employee with eligible children could frequently end up with $6,000 and more net than the single or married without children. There is no tax obligation, they and their employer do not contribute to Social Security.
I have heard on more than one occasion the suggestion that low-paying business such as Wal-Mart, restaurants and other small businesses do not lack in employment applications. They also point out the benefits from EIC and other programs.
They do not ask where these benefits come from. That is: who pays the piper. Those businesses that rely on Federal and state programs to compensate for their traditional inadequate pay. If this cost is not passed on to the consumers of the products and services of these companies it must come out of the taxes from the individuals and businesses that do pay equitable salaries. That is if the other companies and individuals have to pay additional amounts to "subsidize" the other companies than there company is passing on to their customers the cost generated by others.
Specifically to be applauded is the Child Tax Credit and additional child tax credit. There are some application rules that limit the additional child tax credit in the lowest end of income. There are no restrictions to the married filing jointly until there income exceeds $110,000. Head of households have adjustments after $75,000 income.
I sometimes question the Head of household tax differencials. I usually forget the "head of household" discounts. The government hands out these "head of household" discounts so when you pay your rent, utilities food and other costs you get this equalizing discount.
There is no argument that the base minimum pay is not sufficient to defray the minimum costs of shelter, food, clothing and other household expenses. The question has to be asked "Why Not! When an individual is willing to work full time in any area of employment, it should be expected that they should be able to afford basic needs. At what point should the government subsidize them for choices that may have been made related to the size of the family and typs of expenses they incur.
Many work full time, sometimes another part time job and give their children the love and attention so important to their development. Some pay that additional money to get their tax return check within a couple days. The money may be gone within the month but they have their High Definition Tv, for example, or have paid off the "payday loans" and penalties accrued.
Due to divorce, the loss of a spouse, and other factors, a financial burden has been placed upon many ouside of the current means to defray current costs. What is the responsibility of Government and the responsibility of the parent.
The ability and eagerness to procreate should not be the base for aiding the family. Adequate wages, reasonable health and education cost ( wouldn't that be nice) should be part of the benefits expected from the business and the state and federal government.
The last increase in minimum wages was met (through coercian) with a requirement that tax credits are part of the package. These tax credits were no way assured that they would benefit the so-called businesses that were affected by the increase in minimum wages. The population of the States that paid less than the proposed increase of minimum wages was around 39 percent. Since these business taxes did not differenciate between the state and targeted business this was just another national tax credit caused by lazy or cowardly legislatures.
At some time we will have to address the base of income, taxation and credits. It is not fair to the public or consumer of a goods or product to not pay the direct and indirect cost. It is certainly not fair for the income and tax liabilty of other businesses to be taxed to compensate for the inadequacy of the original businesses.
This is a base for a "false" economical structure.
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