Edwards outlines plan for poor (new tax plan)

[JohnLocke]

Edwards outlines plan for poor
By Tony Leyes--Des Moines Register
Thursday, July 26, 2007
----
Presidential candidate John Edwards is proposing a series of tax changes that he says would help poor and middle-class Americans earn and save money.

The North Carolina Democrat plans to explain the proposals in a speech this morning at Grand View College in Des Moines.

His campaign provided an outline of the plans, which include several ideas:

* Encourage savings by offering $500 tax credits to low-income and moderate-income families who put money in accounts for retirement, college, home down payments or small businesses. The credits would effectively double their savings up to $500 per year.

* Add a $500 “work bond” for poor families, which would match additional savings they set aside.

* Give tax exemptions to the first $250 in investment income, to encourage saving and to simplify tax filing for families with small amounts of interest or investment income.

* Expand the child-care tax credit and allow stay-at-home parents to use it to offset their costs.

* Expand the earned-income tax credit to ease the burden on low-income people without children.

* Raise the top tax rate on long-term capital gains to 28 percent, which Edwards says would force wealthier Americans to pay taxes at rates closer to what middle-class families pay on their salaries.

* Repeal President Bush’s tax cuts on families making more than $200,000. Edwards has said he would use the proceeds to pay for a universal health-care plan.

http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20070726/NEWS/70726010/1001/BUSINESS

[draft_mario_cuomo]

1. Thanks for posting. These are real solutions to real problems, not empty rhetoric nt

[PresidentObama]

4. Absolutely. Edwards is the candidate of solutions.

He's had the boldest vision for our country, and best ideas to solve the big problems we face.

The critics keep hanging on his $400 haircut. But what really matters?

The issues matter!! And Edwards is winning the issues debate by far.

[JDPriestly]

2. How will tax credits help the poor.

Also, very poor people who pay rent often don't have enough deductions to itemize. Will this "deduction" for saving be deductible whether or not you itemize?

[jtrockville]

3. Actually, I don't see "deductions"

It's been a while since I've delved into taxes (thankfully, my spouse does them for us), but aren't credits treated differently from deductions?

[JDPriestly]

5. Yes, they are different, but I am not a tax expert.

I can't explain the difference properly.

[FrenchieCat]

6. Tax credits are separated into two categories;

After tax credits and before tax credits.

Before tax credits reduce the income that will be taxed. Not very powerful, IMO.

After tax credits reduce the tax calculated. They are the most powerful of all credits as they reduce the amount of tax to be paid.

Some credits allow for any credit that puts the tax owed into a negative to be refunded to the tax payer.....other credits only allow the tax to be brought down to zero, but will not refund any excess credits.

I would like to think that John Edwards is talking about a credit that would work similarily to the earned income credit (an after tax credit with a refund allowed for any overage that the tax credit generates).

[jtrockville]

7. Thanks. Let's hope he meant after tax credit.

[JohnLocke]

8. He is.

The Edwards plan would also expand the childcare tax credit to cover up to 50% of childcare expenses up to $5,000 and expand the earned-income tax credit, which provides tax refunds to low-income workers without children.

http://online.wsj.com/article/SB118548333453979331.html?mod=googlenews_wsj

[1932]

22. The work bond also sounds like new money, rather than an offset.

[karynnj]

21. Yes they are

A deduction can only reduce taxes, a credit can cause you to get more back than you paid in.

The bigger problem is that this should not be positioned as helping the poor - they likely will not have up front the discrectionary income to invest or save. It could help some middle or upper middle class people.

[1932]

51. Earned Income Tax Credit and work bond definitely help the working poor.

the savings credit creates an incentive that will help poor people have more economic power (ie, more savings, more money).

[Augdog20]

54. Earned income taxes are why blue collar African Americans love Bill Clinton

But strangely, too many blue collar whites dislike Bill Clinton,like they don't benefit too from the Earned Income Credits???.
Must be all the right-wing talk radio and "traditional values" in the South.

[1932]

14. The same way the earned income tax credit helps the poor.

[karynnj]

19. I agree with you on this

Also if you have no money to save or invest, you do not get a tax credit. He also may hurt many elderly people with the rise of the taxation on long term capital gains. Most are not in the income bracket that would pay 28% on earned income. (Also, this is NOT a marginal rate.)

[1932]

26. Work bond, and the Earned Income tax credit are still pretty valuable for people

in that situation.

Also, the $500 credit for saving $500 is an excellent carrot to encourage saving. For people who would find it hard to save that money, the chance of getting a $1000 swing in their income is huge, if you ask me.

That one is clearly not about addressing the current reality (that people have a hard time saving) as it is about trying to create an excellent incentive to help people save.

And if you find yourself with $1000 more at the end of the year, and you then use that instead of putting things on credit cards, or you can invest on school, or EE savings bonds, you might find the benefits magnifying each year -- it will be easier to save, and you can keep getting the credit.

[ProudDad]

9. Sorry for the reality check

but I have been very, very poor... When I was, there was no fucking way in hell any of this would help me:



* Encourage savings by offering $500 tax credits to low-income and moderate-income families who put money in accounts for retirement, college, home down payments or small businesses. The credits would effectively double their savings up to $500 per year.

* Add a $500 “work bond” for poor families, which would match additional savings they set aside.

* Give tax exemptions to the first $250 in investment income, to encourage saving and to simplify tax filing for families with small amounts of interest or investment income.


:crazy: :crazy: :shrug: :shrug:


When you're very, very poor the only thing you worry about it whether your money will last long enough to buy food or where the HELL the next month's rent is fucking going to come from...

Becoming a "member of the investment class" is just not a fucking option...

[1932]

17. You would have benefitted from this one: * Expand the earned-income tax credit to ease the burden

on low-income people without children.

Obviously, changing the income tax code is largely going to impact on people with income.

But even more obviously, that fact doesn't meant that helping people at the lower end of the income scale with more sane income tax policies is a waste of time.

The exception to this rule is the E-I Tax Credit, which is a negative tax, and actually gives you money you didn't have, rather than give you back or not tax you on money that came in.

Actually, a couple of those other proposals give you new money, so that's pretty excellent set of proposals.

[Name removed]

10. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ProudDad]

11. The * tax cuts

totaled about $1.6 TRILLION.

Yep, that's enough to buy crappy insurance for us 47 Million uninsured...

I won't vote for ANY candidate who doesn't SWEAR (not promise but SWEAR) to do the RIGHT THING though:

HR 676 - http://www.house.gov/conyers/news_hr676_2.htm

[draft_mario_cuomo]

12. HR 676 was introduced 6 months ago. It still hasn't gotten out of subcommittee yet...

...let alone get out of a full committee and onto the House floor...The truth is HR 676 has no chance of becoming law.

[ProudDad]

15. And that's a good thing why?

:shrug:

I don't believe that anyway. The only reason it has NO chance until early '09 is the veto...

There is NO OTHER long term solution to the lack of Health Care in this country. The Civilized world has caught on to that fact and acted on it.

We're really fucking slow, but the U.S. loves to steal good ideas eventually and may steal this one too...

[draft_mario_cuomo]

16. I didn't say it is a good thing but why write-off candidates who are proposing the possible?

If HRC 676 can't even get out of subcommittee in a Democratic House what does that tell you about the odds of it ever becoming law?

[ProudDad]

18. Well the selfish reason

is that none of the other's plans are going to do SHIT for me!

I am too young for Medicare.

I don't make enough money to buy ANY insurance at ANY PRICE.

I make too much money for Medicaid.

Freelance people don't get health insurance with their job.

I'm too old and partially disabled from my profession to get hired by a company who would supply health insurance.

I'm not disabled enough to collect disability...


The for-profit health insurance mafia and big pharma's grip on drug prices (for drugs created by OUR TAX DOLLARS for R&D) must be abolished...

If you leave the for-profits in the equations it ain't gonna be worth shit...

[ProudDad]

44. Because it's a distraction

it will NOT solve the problem.

Edward's plans are a band-aid, maybe not a bad band-aid, but still a band-aid that leave the basic equation of for-profit capitalist inequities intact.

I still don't know what Obama or Hillary's "plans" are. There ain't shit at Hillary's website and Obama speaks platitudes -- pleasing platitudes of togetherness, which ain't too bad, but no "plan"

I DO know what HR676 is. HR676 is EXACTLY what we need. It still allows the rich fucks to buy all the gold-plated health care they want but it supplies the rest of us with a basic minimum of GOOD Health Care without breaking the bank pandering to the health insurance mafia and big pharma...


"HRC 676 can't even get out of subcommittee in a Democratic House what does that tell you"?

It tells me the Dems are just as FUCKED UP as the pukes when it comes to taking care of the needs of the People...

[Big Pappa]

27. But it won't be

for 47 million. UH is supposed to be for all and 1.6 trillion will not cover all.

[1932]

29. 1.6 trillion for Universal Health Care is an excellent start.

[Big Pappa]

31. There is a

wide margin between paying for and "an excellent start"

[1932]

35. Yes. With the former, you never start

if your plan is to sit around and not do anything until every penny is counted.

[Milo_Bloom]

13. What a useless proposal

It seems Edwards, despite all his rhetoric, doesn't understand poverty one bit.

People in poverty don't have ANY disposible income to put into savings, so offering them additional tax credits for savings is the usual empty Edwards fluff.

[1932]

20. Are you actually arguing that there's nothing wrong with the tax code

and that there's no need to fix it because it addresses income, which poor people do not have?

And you do realize that there are a lot of working poor people in America?

And you do realize that the tax code puts a lot of the tax burden on people at the bottom, don't you?

[ProudDad]

23. Of course there's something wrong here

There should be a guaranteed annual income that supplies a living wage.

There should be a marginal tax rate of over 100% for every dollar over 500,000 per year...

Problem solved...

On edit: Actually the major tax burden in terms of percentage of income paid in taxes is on the middle and lower middle classes.

[Milo_Bloom]

25. Not at all.

I am just stating that these particular fixes are nonsensical at best and don't achieve the stated goals of helping the poor.

[1932]

28. They certainly do make sense and certainly do help people at bottom of income scale.

Why do you think they do not?

You think the EITC doesn't help low income people? It's a negative tax! It's money the government gives you because you did not make very much money.

How does that not help poor people?

[Milo_Bloom]

30. The EITC is based on earned income

Tax credits based on investments are silly if you are claiming you are trying to help poor people, since truly poor people do not have money for "savings" and investments. They often live check to check, month to month, barely scraping by and/or drowning in debt.

You want to help poor people? Allow people earning below certain income levels to write off credit card interest.

Offering a $500 tax credit on investments... exempting the first $250 of capital gains? Come on, this is just rhetoric designed to sound one way, but helps no one.

[1932]

32. The savings/investment credit is very valuable carrot to encourage savings and

by working poor -- exactly the people who need to do that -- and all the rest are new money.

It's an excellent array of breaks and benefits.

And how about not losing your child care credit when you lose your job -- don't you think that a pretty good break for married people who need child care even though one spouse has lost his job? Don't you think that sort of helps you get out and look for a job or go to school?

And don't you think people who work for a living should be rewarded with something like a work bond?

[Milo_Bloom]

37. LOL!

Yes, dangle a carrot that one cannot reach.

"And how about not losing your child care credit when you lose your job -- don't you think that a pretty good break for married people who need child care even though one spouse has lost his job? Don't you think that sort of helps you get out and look for a job or go to school?"

No, it is not NEARLY enough. The child care credit is a joke.

The plan is typical of John Edwards... mostly rhetoric, nothing practical.

[1932]

40. you have no idea what you are talking about.

[Milo_Bloom]

43. Yeah, right....

Don't bother try to disprove anything that was said.

I'll file you under Edwards apologist.

[1932]

50. Which of those claims do you want me to "disprove"?

[Milo_Bloom]

61. Any of them?

You havent done a single one yet, so take a stab at any one.

[1932]

64. I addressed them in my previous post, but if you pick one point that you think I didn't

cover, please repeat the argument, and I will address it AGAIN.

[Milo_Bloom]

69. Any of them?

Not one has actually been addressed.

Please do, if you can.

[1932]

70. Are you having a hard time restating even one of them?

Just give me ONE of them.

If they are such great arguments demanding of a response, it shouldn't be hard for you to state just one of them.

Come on. Give it a shot.

[ProudDad]

45. Sometimes

"They often live check to check, month to month, barely scraping by and/or drowning in debt"

sometimes it's meal to meal...

[TheFarseer]

57. writting off credit card interest seems like a bad idea

that only encourages more debt. We need to encourage more saving, which parts of his plan does. I work for a tax service seasonally part-time and when I see a poor family get a big fat check that mostly came from EIC, I truly hope that they put some of it in a savings account and start to get ahead in life, but I don't think most of them do. If you don't have any extra income to save, you can start your savings from that. Although I'm sure someone will tell me I'm being naive.

Also, no one said the first $250 of Cap Gains. I read that to be all investment income, which would include a savings account.

Oh and another thing, most poor people, especially those with children can reduce their tax to 0 already so writing off credit card interest would do them no good what-so-ever.

[1932]

60. I agree with that. Taxpayers should not subsidize credit card company profits.

[Name removed]

36. Deleted message

Message removed by moderator. Click here to review the message board rules.

[1932]

41. Except that they've been raising taxes on poor so that they could lower them for rich

for the last 15 years.

[TheFarseer]

56. What do you want?

More EIC? The Child care stuff do anything for you? I'm seriously asking, what do you want as far as a tax code policy? I've never been truly poor, just college student poor.

[1932]

24. The change to the child tax credit would be great. Now, if you lose your job,

you lose the credit, which is harsh, I think.

[Manifestor_of_Light]

33. Won't help me.

Unemployed and uninsured and overeducated.
It's a start, but we need good jobs and universal health care.


When I worked, I did get an Earned Income Tax Credit. I turned it into a "Government Grant for the Arts" and bought a Kurzweil synthesiser with it! Which I still enjoy many years later!

[1932]

34. Just because some people are unemployed, doesn't mean income tax code can't be fixed.

[Yukari Yakumo]

38. I have to agree that this is a garbage proposal.

Points 1, 2, & 3:
When you're living paycheck to paycheck, you're not going to be investing in anything.

The rest: Little to no details, and a lot of rhetoric. But especially I don't see anything that would actually help the poor.

[1932]

42. When you are living paycheck to paycheck, the EITC is a BIG deal!

And a $500 bond is nothing to sneeze at.

And not losing the Child care credit when you loose your job is a big deal too.

And an incentive to save that's worth up to $500 is excellent.

[ProudDad]

46. I'm sorry

I'm sure your heart is in the right place but damn, you really don't appear to know anything about what it's like to be really, really poor in this country.

I've been there quite a few times. When you don't know where the money for your next meal will come from you SURE AS HELL ain't gonna be able to save $10 let alone $500.

When you don't know where the rent is going to come from...for the third month in a row...you SURE AS HELL ain't gonna be able to "save" $500...

And so you do "save $500" and somehow get the feds to match it, it would be gone for the next rent check...

This is fluff -- it's campaign bullshit. It wouldn't help the poor and would barely do shit for the lower middle or middle. It's chump change for the middle and impossible for the poor...

And it would never pass in this corporate owned House and Senate -- so our friend Edwards may have a good heart too but he's running for President and blowing it up our asses...

[1932]

49. I think you are way off. I think this would pass. And I think fixing the tax code

is very important.

[FrenchieCat]

47. For the poor, the problem is not so much the Federal Income Tax

as it is the FICA payroll taxes. That's where they get hit with the 6.2% of their earned income no matter how many exemptions they have or credits.

In terms of the Child Care Credit, its value really is a joke, regardless of if a taxpayer "keeps" it or not based on having or not having a job. the limit for the Child Care Credit currently is $480.00 (for expenses counted that cannot exceed $2,400 per annum, i.e., $200.00 per month which is rather low as most folks pay not less than $100.00 per week), I believe. If no tax is due, no Child care credit is given as the credit can only reduce the income tax to zero, but not refund any excess. So the Child care credit is unlike the earned income credit, as the EITC is counted as a tax "payment" making it refundable.

I do believe that it is very hard for poor people to save......as even the middle class has a real problem with that. In other words, any meaningful assistance to the poor has to be done in a direct manner otherwise it just sounds good, but doesn't even start to address the problem of providing them with additional moneys to make ends meet (which is the problem they face)......rather than giving a bond matching saving funds saved by the taxpayer.

[1932]

48. You're way off on Child care credit. It's $5000 per year.

[FrenchieCat]

52. I'm not way off.......I stated $2,400......but it is $3,000. Your $5,000 is further off and is not

the figure of the actual credit. The actual credit is based on a fraction of the $3,000 per child expenditure limit, i.e., the entire $3,000 does not become the credit.

In addition, not everyone can claim the maximum credit, as the credit given is not only based on the percentage of your actual expense (which is limited to $3,000 per child), but it is also based on one's earned income....i.e., a personal earning of $10,000 per year will not qualify one for 100% of the fraction of the $3,000 even if that is what they spent.

[1932]

53. IRS Pub. 503, top of page 9 -- married couple can claim $5000 credit.

The amount of expenses you can exclude or deduct is limited to the smallest of:
...
5. $5,000 ($2,500 if married filing separately).

http://www.state.nj.us/treasury/pensions/epbam/exhibits/non-dpb/irspub503.pdf

but if one spouse is unemployed, you don't get it at all, which is what Edwards is addressing.

[TheFarseer]

58. Child care is $3,000 per kid up to 2 kids

So up to $6,000 total.

[Dawgs]

39. Sounds good to me.

I wish we would see more of this from Obama.

I like them both.

[TheFarseer]

55. #3 - I e-mailed him that exact idea!

"Give tax exemptions to the first $250 in investment income, to encourage saving and to simplify tax filing for families with small amounts of interest or investment income."

I hope he stole it from me! I'm going to tell people he did :)

6 & 7, I love and the rest of that, I'm luke-warm toward and 4, I'm not sure I understand.

[Greyhound]

59. I want to like Edwards, but this proposal is an excellent example of why I

don't. There is nothing in this proposal that will make one whit of difference to the poor. People that are working 2 or more jobs and still can't make ends meet cannot "put money in accounts for retirement, college, home down payments or small businesses" no matter what tax credits they get. There are no funds to match, nor investment income to exempt.

He just doesn't seem to understand that tweaking taxes will not improve the economy and is stuck in some perverse reaganesque fantasy world where the only reason people are not making it here is that their taxes are too high.

Like his proposal for health care, if we just give the insurance companies even more billions in welfare maybe someday they will deny claims to all of us.

If he really want Americans to start businesses and be entrepreneurs, why isn't he proposing taking the banks out of the SBA system and making the loans directly?

Has he just been so rich for so long that he doesn't see we are way beyond a few tweaks to fix the system?

:kick:

[1932]

62. Fixing Income Tax system is clearly important. If it wasn't, Repubs wouldn't have spent last 30 yrs

using it to shift wealth from people who work to people who make money from money.

I wouldn't vote for anyone who didn't have a plan to undo that.

[Greyhound]

65. Clearly it is important, but the thrust of his message, from what I've heard,

is that we need to address the two Americas and reunify them. Giving more to the wealthy will hardly accomplish that.

[1932]

66. Giving more to the wealthy?

I have always thought it discouraged savings to tax interest income on savings accounts at your personal rate. For years, the only non-earned income I had was from savings accounts (granted it wasn't very much). Giving the first $250 of interest income tax free helps people at the low income range pay a lower overall rate of taxation than people with thousands of dollars in interest income, AND it encourages savings, which is the route out of poverty and toward financial security. Had I got a matching credit for my savings all those years when I and millions of others were getting a little bit of interest income all those years, and we'd definitely have more money now, more savings, and more economic power, which is what building a secure and powerful middle class requires.

[Greyhound]

68. Giving more to the wealthy is what his health care plan is based on.

Again, not taxing $250 of interest would be better than nothing, but just barely. If you want to turn the economy around and raise the living standards of the lower classes, the best thing we can do is to raise wages. As we have seen time and again, the more money that is put into the hands of the people from the lower middle-class down, the better the over-all economy does.

I'm not opposed to him, I just think his proposals are too timid and pander to the wrong people.

[1932]

71. I think his health plan is stage II for getting to stage III.

[goodhue]

63. excellent

[WCGreen]

67. Come on John... Energize that base... Get 'em involved...

Make 'em feel like they have a real stake in this next election...

You do that and we will win with in a landslide...