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Started By
Message
Spin off on A wants Welfare quiz
Posted on 8/8/14 at 11:30 am
Posted on 8/8/14 at 11:30 am
The discussion of 'subsidies' and 'benefits'. (Ie) mortgage deduction.
As been spelled out, some of us do not believe that our money is the governments and thus anything they do to reduce what they retain is a 'subsidy'. Clearly others think otherwise give the article argued such tax 'loopholes' were the biggest draw on the bottom line.
For those in that camp - why don't you apply to the same logic to the progressive tax rates themselves. For example, under this logic, should we not consider the tax rate 39.6% and thus any payments in the lower tax brackets are truly 'subsidies'? Why is the progressive nature of the system not considered a subsidy (besides the fact it would destroy these pretty little conclusions that people want to draw)? Just curious.
As been spelled out, some of us do not believe that our money is the governments and thus anything they do to reduce what they retain is a 'subsidy'. Clearly others think otherwise give the article argued such tax 'loopholes' were the biggest draw on the bottom line.
For those in that camp - why don't you apply to the same logic to the progressive tax rates themselves. For example, under this logic, should we not consider the tax rate 39.6% and thus any payments in the lower tax brackets are truly 'subsidies'? Why is the progressive nature of the system not considered a subsidy (besides the fact it would destroy these pretty little conclusions that people want to draw)? Just curious.
2
Posted on 8/8/14 at 11:42 am to igoringa
quote:
As been spelled out, some of us do not believe that our money is the governments and thus anything they do to reduce what they retain is a 'subsidy'.
I would tend to agree with this notion. If the gov't is going to reduce your tax bill based off of an action, this is clearly a subsidy IMHO.
Would you consider the earned income tax credit a subsidy?
quote:
For example, under this logic, should we not consider the tax rate 39.6% and thus any payments in the lower tax brackets are truly 'subsidies'?
in a sense they are.
Posted on 8/8/14 at 11:47 am to Hawkeye95
quote:Keeping your own money != not a subsidy
mortgage deduction.
quote:Receiving someone else's money == subsidy.
earned income tax credit
Posted on 8/8/14 at 11:49 am to Taxing Authority
And then call it an EARNED income tax credit, i never will understand that one
Posted on 8/8/14 at 11:53 am to Taxing Authority
quote:
Receiving someone else's money == subsidy.
EITC is for people employed that have children, the majority are paying more in federal taxes than they receive in benefits.
maybe not the majority, but they are all paying taxes
This post was edited on 8/8/14 at 11:55 am
Posted on 8/8/14 at 11:53 am to Hawkeye95
quote:
in a sense they are.
Yet I have never heard anyone from the left, while trumpeting the subsidy argument ever refer to these as such. Now why not? Wouldn't have anything to do with the fact that if you did it would show a lot of deadbeats that are massively 'subsidized'? Doesn't nicely fit the agenda.
As for the EITC - since folks get that regardless of taxes paid, then yes it is a subsidy just like the child tax credit.
Posted on 8/8/14 at 11:55 am to Hawkeye95
quote:You're conflating payroll taxes and income taxes. Anyone qualifying for the EITC is not paying any income taxes. And the payout for their payroll taxes is "guaranteed".
the majority are paying more in federal taxes than they receive in benefits.
Posted on 8/8/14 at 11:56 am to Hawkeye95
quote:
EITC is for people employed that have children, the majority are paying more in federal taxes than they receive in benefits.
Notice the slide to federal taxes as opposed to federal income taxes. Yes they are paying payroll taxes and for every dollar they pay, they are accruing benefits at a much higher multiple than those of us at the other end of the spectrum. Thus their 'taxes' simply result in a higher liability to the rest of us, plus we cut them a check. Sounds delightful. And yes the check is a subsidy.
Posted on 8/8/14 at 11:57 am to igoringa
quote:
Yet I have never heard anyone from the left, while trumpeting the subsidy argument ever refer to these as such. Now why not? Wouldn't have anything to do with the fact that if you did it would show a lot of deadbeats that are massively 'subsidized'? Doesn't nicely fit the agenda.
only here I would be considered on the left.
quote:
As for the EITC - since folks get that regardless of taxes paid, then yes it is a subsidy just like the child tax credit.
Got it, when someone else gets the money, its a subsidy but when you get the money its not a subsidy.
what about tax credits for solar energy or hybrids? are they subsidies?
Posted on 8/8/14 at 11:59 am to Taxing Authority
quote:
And the payout for their payroll taxes is "guaranteed".
Not only is it guaranteed, that payout itself is subsidized by the rest of us. The pittance those folks pay do not come close to covering the benefits they are guaranteed. That is why I love the 'well they pay payroll tax argument'.
It is like buying a pizza and you ask your buddy to pay a dollar of the $20 bill. And he agrees only if you promise to give him a quarter of it and buy him a pizza later. Not many people would pat him on the back and say thanks for contributing. lol
Posted on 8/8/14 at 12:01 pm to igoringa
Its all a matter of wording.. Take SS/med aka FICA, its called a tax but in reality its a promise of future benefits owed by the federal government. Its listed as a liability on the books. The feds though have separated that off the main books into a separate account allowing them to borrow the excess cash to pay current expenses, all the while leaving a treasury note in its place..
Now when people discuss taxes, we lump Fica into the category of Federal taxes because we are told that its such but then why is it separate from the federal books? Well by calling it a federal tax, its easier for them to sell EIC as a reduction of taxes..
Now when people discuss taxes, we lump Fica into the category of Federal taxes because we are told that its such but then why is it separate from the federal books? Well by calling it a federal tax, its easier for them to sell EIC as a reduction of taxes..
Posted on 8/8/14 at 12:02 pm to Taxing Authority
quote:
Anyone qualifying for the EITC is not paying any income taxes. And the payout for their payroll taxes is "guaranteed".
simply not true. They are being taxes, its just given back to them. The tax rate for those lower income levels is 10%. They are paying taxes, but we give it back to them.
I will concede for many of those, they receive more than they pay in. But in my mind, its all a subsidy.
eta: I receive multiple subsidies from the gov't. I am ok with the fact that I am getting them.
This post was edited on 8/8/14 at 12:03 pm
Posted on 8/8/14 at 12:04 pm to Hawkeye95
quote:
only here I would be considered on the left.
I didn't say you were the 'left'. I said the left. Show me one person on the left who, while screaming about deductions equally brings in these subsidies. One would suffice. I will hold my breath.
quote:
Got it, when someone else gets the money, its a subsidy but when you get the money its not a subsidy.
? Slow down professor. Subsidy = payment of money. EITC is a payment of money. Can it be netted against taxes? Sure but (a) they don't pay any and (b) as a result they get a check.
If that same hypothetical person had a house and a mtg deduction - they would not get paid for the deduction. It is really not that complicated.
quote:
what about tax credits for solar energy or hybrids? are they subsidies?
If the government cuts you a check for this, including any excess over other liabilities then yes. If they don't, then no.
Now granted, you are consistent atleast in that you call the income tax brackets subsidies. Thus you are being consistent. But in that you are alone.
Posted on 8/8/14 at 12:09 pm to Hawkeye95
quote:
simply not true. They are being taxes, its just given back to them. The tax rate for those lower income levels is 10%. They are paying taxes, but we give it back to them.
The payment has nothing to do with the taxes they paid so it is not 'giving back to them'. They are paid a flat amount independent of their taxes. All else being equal including income, someone who standardizes versus itemizes deductions will have a different tax liability but their EITC will stay the same. It is not a derivative of taxes. That is what you seem to no understand.
quote:
eta: I receive multiple subsidies from the gov't. I am ok with the fact that I am getting them.
For you to argue subsidies, you are inherently arguing that the a certain component of your income is the governments and that it some fixe amount (whatever arbitrary number you put on it). It is theirs and not yours. Thus any reduction from that arbitrary amount is a 'subsidy'.
Sorry, it is mine and not theirs. Anything I pay them is a total tax liability. Writing a check does not constitute receiving a subsidy. When I buy a coffee that is 10% off - I don't argue that Starbucks gave me a subsidy. It wasn't their money to begin with.
Posted on 8/8/14 at 12:13 pm to igoringa
quote:
They are being taxes, its just given back to them
Showing the fallacy. A single woman with one child that makes $14K a year in LA would be a federal EITC of $3250 and if she had her deductions done correctly would have paid exactly $0 in federal income tax.
The 2 calculations are independent and not based off a 'refund' of taxes paid.
Posted on 8/8/14 at 1:00 pm to igoringa
quote:
The payment has nothing to do with the taxes they paid so it is not 'giving back to them'. They are paid a flat amount independent of their taxes. All else being equal including income, someone who standardizes versus itemizes deductions will have a different tax liability but their EITC will stay the same. It is not a derivative of taxes. That is what you seem to no understand.
No i completely understand your argument, I just think you are wrong. Both are subsidies.
The difference is in the EITC, additional subsidy can be refunded to you after your tax bill is met.
BTW, I am not the only person that believes this. Many think tanks and other organizations call it a subsidy too. Hell the CBO calls it a subsidy.
LINK
I get it, its your money. you dont like paying taxes. I completely understand.
Posted on 8/8/14 at 1:02 pm to Hawkeye95
quote:
Would you consider the earned income tax credit a subsidy?
No. It's welfare.
Posted on 8/8/14 at 1:04 pm to igoringa
quote:
They are paid a flat amount independent of their taxes.
Correct. This is also known as 'welfare.'
Posted on 8/8/14 at 1:11 pm to Hawkeye95
I disagree. When I qualified for the EITC (last time was 2001) I got WAY more back then I paid in.
I know people now getting shite loads of money back now a days and they are not making good money.
I know people now getting shite loads of money back now a days and they are not making good money.
Posted on 8/8/14 at 1:24 pm to Hawkeye95
quote:So you're claiming we're giving them back their own money?
simply not true. They are being taxes, its just given back to them. .... They are paying taxes, but we give it back to them.
that simply isn't true. quote:The base marginal rate may be 10%. But the effective rate after even most basic deductions is far lower. In most cases it's $0.
The tax rate for those lower income levels is 10%
The negative tax liability only comes from the EITC.
quote:That explains a lot. Why so greedy?
eta: I receive multiple subsidies from the gov't. I am ok with the fact that I am getting them.
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