Average person's take on the stimulus...

[fivepoint]

"You're getting $600. What can you do with that??? You go out and you buy a pair of earrings."
-Average Lady in the News

What do you think about the stimulus money? Thoughts from the community?

[skunk]

The way things are going, you could probably buy a house with it.

[rhsgolfer33]

The way things are going, you could probably buy a house with it.

Definitely in Detroit.

[leekohler]

I used mine last year to help me buy a new BlackBook.

As far as what the stimulus will do- I really don't know.

[CorvusCamenarum]

I could do a lot more with it than buy one pair of earrings, that's for sure.

[.Andy]

You think average ladies buy $600 earrings?

[MacNut]

$600 is not going to do much. If it was $5,000 that would do more.

[skunk]

You have expensive taste in earrings, darling.

[NT1440]

Hopefully my dad will use part of it to live up to his end of the bargain and match what Ive earned towards my first mac (macbook 13").

That, or he will like he did the last stimulus, pay off yet another month of the mortgage ahead of schedule.

[fivepoint]

You think average ladies buy $600 earrings?

You have expensive taste in earrings, darling.

I could do a lot more with it than buy one pair of earrings, that's for sure.

Before we go any further... I think I should let you guys in on my little joke. :) That 'average lady' was actually Michelle Obama in July of 2008 (http://www.washingtontimes.com/news/2008/jul/11/michelle-obama-spend-600-stimulus-check-earrings/), talking about Bush's tax cuts from 6 months ago.


"You're getting $600. What can you do with that??? You go out and you buy a pair of earrings."
-Michelle Obama, July 2008




Anyway, besides wondering what changed between then and now... I think it is actually a good discussion to have on whether or not the proposed tax cuts (well, actually 'rebates' or 'stimulus' or whatever since many of the people receiving them never paid the income taxes in the first place) are enough, in the sense of making a dent in the current problem. Obviously the first attempt didn't work out so well. Will this spending do a good enough job stimulating anything, or will most people simply put it in their savings account like I'm planning on doing?

[.Andy]

Before we go any further... I think I should let you guys in on my little joke. :) That 'average lady' was actually Michelle Obama in July of 2008 (http://www.washingtontimes.com/news/2008/jul/11/michelle-obama-spend-600-stimulus-check-earrings/), talking about Bush's tax cuts from 6 months ago.
So she's not an average lady at all. In fact she's a rather exceptional lady.

Anyway, besides wondering what changed between then and now... I think it is actually a good discussion to have on whether or not the proposed tax cuts (well, actually 'rebates' or 'stimulus' or whatever since many of the people receiving them never paid the income taxes in the first place) are enough, in the sense of making a dent in the current problem. Obviously the first attempt didn't work out so well. Will this spending do a good enough job stimulating anything, or will most people simply put it in their savings account like I'm planning on doing?
So this is another thread raising the same questions about the stimulus to go along with all the others? I think you'll find this has already been discussed :confused:.

[leekohler]

Before we go any further... I think I should let you guys in on my little joke. :) That 'average lady' was actually Michelle Obama in July of 2008 (http://www.washingtontimes.com/news/2008/jul/11/michelle-obama-spend-600-stimulus-check-earrings/), talking about Bush's tax cuts from 6 months ago.






Anyway, besides wondering what changed between then and now... I think it is actually a good discussion to have on whether or not the proposed tax cuts (well, actually 'rebates' or 'stimulus' or whatever since many of the people receiving them never paid the income taxes in the first place) are enough, in the sense of making a dent in the current problem. Obviously the first attempt didn't work out so well. Will this spending do a good enough job stimulating anything, or will most people simply put it in their savings account like I'm planning on doing?

No- before we go any further, who are these people who "never paid the income taxes in the first place"? I want hard numbers, please- not the "lower 40%". I want to know what the income cut off is for "never paid the income taxes" is. Thanks.

[fivepoint]

No- before we go any further, who are these people who "never paid the income taxes in the first place"? I want hard numbers, please- not the "lower 40%". I want to know what the income cut off is for "never paid the income taxes" is. Thanks.

But Lee, "lower 40%" IS the answer. Go to www.irs.gov and see for yourself. Look up the income tax brackets and you'll see that the bottom 40% of wage earners pay zero percent of their income in taxes. This is well known information, a quick google search would put this to rest.

[NT1440]

Obviously the first attempt didn't work out so well. Will this spending do a good enough job stimulating anything, or will most people simply put it in their savings account like I'm planning on doing?


Wasnt the first attempt merely just tax cuts/rebates to people?

This go around we are actually trying to be productive as well as better the country. I dont really get how you can casually label this as "the second attempt".

[mactastic]

As I've noted several times, tax cuts are the least effective form of stimulus.

[leekohler]

But Lee, "lower 40%" IS the answer. Go to www.irs.gov and see for yourself. Look up the income tax brackets and you'll see that the bottom 40% of wage earners pay zero percent of their income in taxes. This is well known information, a quick google search would put this to rest.

I'm sorry- that doesn't work for me. What is the income cut-off?

Ok- did it for you:

http://www.factcheck.org/askfactcheck/do_40_percent_of_americans_pay_no.html


About 38 percent of households have zero or negative income tax liability, but they pay other federal taxes.
Towards the end of the campaign, John McCain and prominent conservatives like Lou Dobbs claimed that Barack Obama's proposed tax plan would amount to welfare because it offered a tax credit to the 40 percent of Americans who pay no taxes. We've already looked into the claims that Obama's tax plan is a welfare handout (in short, it's primarily a matter of how you define "welfare," but Obama's plan doesn't look any more like welfare than McCain's). But what about that 40 percent with no tax liability? Can it really be true that more than a third of the country pays no taxes at all?

According to the Urban-Brookings Tax Policy Center, it is true that 38 percent of "tax units" -- which can be singles, couples, or families -- are projected to have zero or negative income tax liability in 2009. About 60 percent of these households make $20,000 per year or less.

However, being exempt from income tax does not mean you're exempt from federal taxes. Everyone who works is liable for payroll taxes, contributions to Medicare and Social Security that come out of every paycheck. There are also excise taxes on some goods and services, most notably the 18.4 cents per gallon tax on gasoline. The Congressional Budget Office found that earners in the lowest quintile, where most of those with no income tax liability fall, shouldered 4.3 percent of the payroll tax burden in 2005 and 11.1 percent of the excise taxes. Their effective tax rate (which is calculated by dividing taxes paid by total income) in those categories, according to the CBO, was in fact significantly higher than the rate of the top quintile, although that top one-fifth of the population had a much higher effective tax rate for individual and corporate income taxes.


Well, how interesting.

[That-Is-Bull]

"You're getting $600. What can you do with that?"

Buy 100 cups of coffee!

http://2.bp.blogspot.com/_6QXboJ2MgbQ/RY8Dgq9GigI/AAAAAAAAAAc/ZRxovw_KdQE/s320/fry_coffee2.jpg

[Desertrat]

Actually, tax cuts for business would indeed save jobs and/or help create jobs. The U.S. corporate tax rate is 40%, compared to around 23% overseas. And, a lot of tax avoidance for U.S. companies has come from "shipping jobs overseas".

http://www.cnsnews.com/Public/content/article.aspx?RsrcID=36986

In a time of declining volumes of business, reducing the overhead of taxation could allow retention of workers who otherwise would be laid off. Depending on the sector, it could lead to investment in new equipment or hiring more people--as not all sectors are in decline.

Giving money to those who pay little or no taxes is merely contributing to the consumeritis which helped get us into this mess. Palliative, for a short time, but nowhere being worth doing. It just adds to the deficit. When the money's spent in a few short weeks, then what?

[leekohler]

Actually, tax cuts for business would indeed save jobs and/or help create jobs. The U.S. corporate tax rate is 40%, compared to around 23% overseas. And, a lot of tax avoidance for U.S. companies has come from "shipping jobs overseas".

http://www.cnsnews.com/Public/content/article.aspx?RsrcID=36986

In a time of declining volumes of business, reducing the overhead of taxation could allow retention of workers who otherwise would be laid off. Depending on the sector, it could lead to investment in new equipment or hiring more people--as not all sectors are in decline.

Giving money to those who pay little or no taxes is merely contributing to the consumeritis which helped get us into this mess. Palliative, for a short time, but nowhere being worth doing. It just adds to the deficit. When the money's spent in a few short weeks, then what?

The corporate tax rate is 40%? Wow- then I find this very interesting:

WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.

More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.

The report did not name any companies. The GAO said corporations escaped paying federal income taxes for a variety of reasons including operating losses, tax credits and an ability to use transactions within the company to shift income to low tax countries.

With the U.S. budget deficit this year running close to the record $413 billion that was set in 2004 and projected to hit a record $486 billion next year, lawmakers are looking to plug holes in the U.S. tax code and generate more revenues.

Dorgan in a statement called the report "a shocking indictment of the current tax system." Levin said it made clear that "too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."

The study showed about 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts, the senators said. About 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year, they said.



http://www.reuters.com/article/newsOne/idUSN1249465620080812

Here's another link to ABC:

http://abcnews.go.com/Business/wireStory?id=5561455

[Rodimus Prime]

leekohler you need to remember a lot of US corpations are sub sections S corporations.

Hell the company I work for is a subsections S corporation and does little over 2 billions a year bussiness. It has not paid a dime in taxes for at least 8 years.

Reason being it subsections S diverts all Taxes to the owners. It happens to be an Employee owned company and the ownership is in a tax differentiable retirement account.

Either way sub sections S corporations do not pay taxes because it is diverted to the owners. People get all up in arms about that but when you REALLY look into it they are use the total number of companies out there for that % but people think of corporations as the big bad guy like Microsoft. They think Microsoft and apple are not paying taxes with is a load of crap.

As for the 600 bucks last year end up being 600 of tax credit for me in 2008 and reduces me from paying the government close to 600 to a 11 dollar refund. that extra 600 ended up in my savings account when it was all said and done.

[NoSmokingBandit]

The governement needs to realize that they cant create jobs. Companies create jobs, not the government, so instead of passing bills that cost all of us money let us keep our money and spend it how we see fit instead of how washington wants us to spend it.


Also:
Wtf $600. I have not heard of this. Or are you referring to the stimulus checks from last year?

[leekohler]

leekohler you need to remember a lot of US corpations are sub sections S corporations.

Hell the company I work for is a subsections S corporation and does little over 2 billions a year bussiness. It has not paid a dime in taxes for at least 8 years.

Reason being it subsections S diverts all Taxes to the owners. It happens to be an Employee owned company and the ownership is in a tax differentiable retirement account.

Either way sub sections S corporations do not pay taxes because it is diverted to the owners. People get all up in arms about that but when you REALLY look into it they are use the total number of companies out there for that % but people think of corporations as the big bad guy like Microsoft. They think Microsoft and apple are not paying taxes with is a load of crap.



I didn't say anything bout specific companies. Those numbers are what they are. I didn't make them up. If the corporate tax rate is 40%, it really doesn't matter if most companies pay nothing, now does it? You can't tell me ALL of those companies are subsection S.

The governement needs to realize that they cant create jobs. Companies create jobs, not the government, so instead of passing bills that cost all of us money let us keep our money and spend it how we see fit instead of how washington wants us to spend it.


That's completely false. You're trying to tell me that there are no jobs the government has created? I can think of a ton of them, and they've been around a very long time.

[fivepoint]

I didn't say anything bout specific companies. Those numbers are what they are. I didn't make them up. If the corporate tax rate is 40%, it really doesn't matter if most companies pay nothing, now does it? You can't tell me ALL of those companies are subsection S.



That's completely false. You're trying to tell me that there are no jobs the government has created? I can think of a ton of them, and they've been around a very long time.


Lee, not to be mean or anything... but it's clear that tax law is not your strong suit. A few days ago you tried telling us that the rich do not pay higher income tax as a percentage than normal people do and that poor people certainly paid their fair share of income tax.

Now you're trying to suggest that America doesn't have high tax code on businesses. Both of these suggestions are uderly false, and represent a complete misunderstanding of the system.

http://www.taxfoundation.org/UserFiles/Image/Blog/corporate-tax-oecd.jpg

http://www.heritage.org/Research/Taxes/images/75866115.gif

http://www.scsuscholars.com/uploaded_images/corptax-769686.JPG

Again, not trying to be mean, but I would suggest a little more research and fundamental understanding before you try telling people how you the government isn't redistributing wealth and that the poor carry a heavier tax burden than the rich.

You're beginning to teeter on the absurd with some of your statements. It's not a big deal if you don't know the truth, but don't try telling us who do that we're wrong. It just doesn't make any sense.

[skunk]

Not to be mean or anything, but you have not addressed the fact that many US companies pay no taxes at all, in which case the theoretical rate is irrelevant. As for private citizens, the overall tax burden is more relevant than that of income tax specifically.

[fivepoint]

Not to be mean or anything, but you have not addressed the fact that many US companies pay no taxes at all, in which case the theoretical rate is irrelevant. As for private citizens, the overall tax burden is more relevant than that of income tax specifically.

For the most part, the companies were't paying taxes because they accrued all of their expenses in a short condensed period, ensuring that they paid less taxes immediately, and more taxes in the subsequent years to compensate for the discrepancy. I won't get into the specifics.

As for the companies who don't pay taxes because of governmental loop holes and tax breaks... that's not their fault, that's your government's fault. They're doing everything within the law. I'm a believer in a system that generally does not prop up failing industries and doesn't subsidize failure or non-competitiveness... so you've got my vote on that part.

The thing is... all of this doesn't matter because "not paying taxes for one year" doesn't mean anything since ALL of their income is being taxed eventually. The implication that corporations somehow don't pay their 'fair share' is laughable. American has probably the single most burdensome corporate tax code in the modern world.

Desertrat was right. And I will add that the politics of victimization is very sad in deed.


Actually, tax cuts for business would indeed save jobs and/or help create jobs. The U.S. corporate tax rate is 40%, compared to around 23% overseas. And, a lot of tax avoidance for U.S. companies has come from "shipping jobs overseas".

http://www.cnsnews.com/Public/content/article.aspx?RsrcID=36986

In a time of declining volumes of business, reducing the overhead of taxation could allow retention of workers who otherwise would be laid off. Depending on the sector, it could lead to investment in new equipment or hiring more people--as not all sectors are in decline.

Giving money to those who pay little or no taxes is merely contributing to the consumeritis which helped get us into this mess. Palliative, for a short time, but nowhere being worth doing. It just adds to the deficit. When the money's spent in a few short weeks, then what?

[leekohler]

Lee, not to be mean or anything... but it's clear that tax law is not your strong suit. A few days ago you tried telling us that the rich do not pay higher income tax as a percentage than normal people do and that poor people certainly paid their fair share of income tax.

Now you're trying to suggest that America doesn't have high tax code on businesses. Both of these suggestions are uderly false, and represent a complete misunderstanding of the system.

http://www.taxfoundation.org/UserFiles/Image/Blog/corporate-tax-oecd.jpg

http://www.heritage.org/Research/Taxes/images/75866115.gif

http://www.scsuscholars.com/uploaded_images/corptax-769686.JPG

Again, not trying to be mean, but I would suggest a little more research and fundamental understanding before you try telling people how you the government isn't redistributing wealth and that the poor carry a heavier tax burden than the rich.

You're beginning to teeter on the absurd with some of your statements. It's not a big deal if you don't know the truth, but don't try telling us who do that we're wrong. It just doesn't make any sense.

And we showed you that the rich do not pay a higher percentage of their personal income in taxes. Maybe you missed that.

I didn't make those articles up out of thin air fivepoint. I don't see how anything I've posted is remotely absurd. What's absurd is you trying to deny it. Again- what does the tax rate matter if most companies avoid it anyway?

[nick9191]

http://apple.com/macmini $599

And a dollar left for a scrummy candy bar :D

[puckhead193]

does any one know if there will be a tax break for buying a new car? What about if its a hybrid?
I don't think it will matter. People will go out and buy something they can't afford and put it on the credit card and won't be able to pay it off....

[mactastic]

Actually, tax cuts for business would indeed save jobs and/or help create jobs. The U.S. corporate tax rate is 40%, compared to around 23% overseas. And, a lot of tax avoidance for U.S. companies has come from "shipping jobs overseas".
I certainly don't deny that tax cuts for businesses would save and/or create jobs. The question is whether that is MORE effective than direct government spending, or not. Everything I've seen says it is less effective. That doesn't mean it doesn't work at all.

In a time of declining volumes of business, reducing the overhead of taxation could allow retention of workers who otherwise would be laid off. Depending on the sector, it could lead to investment in new equipment or hiring more people--as not all sectors are in decline.
Problem with corporate tax cuts is that they will most benefit the companies doing the best. Say it with me -- corporations pay taxes on profits, not revenue. By cutting corporate tax rates, those seeing the most benefit are those with the highest profits. Do you really think Exxon needs a tax break to help them out right now?

We need to target the stimulus money at people who are struggling, not those who are thriving.

Giving money to those who pay little or no taxes is merely contributing to the consumeritis which helped get us into this mess. Palliative, for a short time, but nowhere being worth doing. It just adds to the deficit. When the money's spent in a few short weeks, then what?
Agreed. Giving people -- or even businesses -- a little extra money will simply contribute to consumeritis.

Tax breaks should be removed from the stimulus bill, and it should be 100% direct government spending.

The governement needs to realize that they cant create jobs. Companies create jobs, not the government, so instead of passing bills that cost all of us money let us keep our money and spend it how we see fit instead of how washington wants us to spend it.
Perhaps you should tell that to all the soldiers serving overseas who get paychecks from the US government? Fell like going over there and telling them that they don't really have jobs unless they work for Blackwater? (And of course, that begs the question -- where does Blackwater get it's money?)

Also:
Wtf $600. I have not heard of this. Or are you referring to the stimulus checks from last year?
Yes.

[skunk]

As for the companies who don't pay taxes because of governmental loop holes and tax breaks... that's not their fault, that's your government's fault.Not my government, Bub.

[NoSmokingBandit]

That's completely false. You're trying to tell me that there are no jobs the government has created? I can think of a ton of them, and they've been around a very long time.

I suppose i could have worded that more precisely. Businesses will be able to create jobs better than the govt, but not if the govt keeps taking the money from the people and spending it for them. When the government takes money from the individual they take away the ability to spend money locally. Local businesses make less profit because the government is too busy spending the money on pork. The best thing to do in a recession is to allow the people to spend their own money instead of spending it for them.

[leekohler]

I suppose i could have worded that more precisely. Businesses will be able to create jobs better than the govt, but not if the govt keeps taking the money from the people and spending it for them. When the government takes money from the individual they take away the ability to spend money locally. Local businesses make less profit because the government is too busy spending the money on pork. The best thing to do in a recession is to allow the people to spend their own money instead of spending it for them.

So far, that's proven to be false, especially since Bush decided to spend the next generation's money for them. The bills gotta get paid somehow.