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Pardon my ignorance, but "the Bush Tax Cuts" for the middle class . . . . . .

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Stinky The Clown Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:39 AM
Original message
Pardon my ignorance, but "the Bush Tax Cuts" for the middle class . . . . . .
I seem to recall massive tax cuts for the wealthy and for high earners.

I don't seem to recall a Bush tax cut for "the middle class".

This lack of memory may be due to my age. Can someone enlighten me. What tax cuts for the middle class are set to expire? Maybe the media, who is framing it this way, could explain that to me.






Why is Russert's frat boy kid on teevee telling me what he thinks I ought to know?
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begin_within Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:42 AM
Response to Original message
1. Rich is the new middle class!
There isn't any middle class any more, so the rich pretend they are "middle class."
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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:43 AM
Response to Original message
2. Hey!!!! You got your THREEEEEEE HUNDERRRRRRD DOLLARS, so SHUT UP!!!
:hi:
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ManiacJoe Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:43 AM
Response to Original message
3. A quick blurb from the Seattle Times
http://seattletimes.nwsource.com/html/nationworld/20124...

"Democratic leaders, including Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000, what Democrats call the middle class."
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sinkingfeeling Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:44 AM
Response to Original message
4. Here's a chart on the 2003 cuts.
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Stinky The Clown Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:48 AM
Response to Reply #4
9. From that article - thanks!
Combined Effect of Bush Tax Cuts 2003
Income
(in thousands) Percent of Households Average Tax Change

Less than 10 23.7 -$8
10-20 16.6 -$307
20-30 13.3 -$638
30-40 9.7 -$825
40-50 7.6 -$1,012
50-75 13.0 -$1,403
75-100 6.8 -$2,543
100-200 6.6 -$3,710
200-500 1.6 -$7,173
500-1,000 0.3 -$22,485
More than 1,000 0.1 -$112,925
Source: Tax Policy Center table T03-0123

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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 12:05 PM
Response to Reply #9
14. Damn I didn't get anywhere near the amount of my tax bracket.
This system is rigged against single people.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 12:14 PM
Response to Reply #14
15. Having kids is also a major source of tax credits.
For example 2001/2003 tax cuts moved child credit for $500 per child NON-REFUNDABLE to $1,000 per child FULLY REFUNDABLE.

So take a family with 3 children. Prior to 2001 they potentially had up to $1,500 in tax credit. However if their taxes were less (say $9,00) then the tax credit was equal to maximum in taxes. Essentially it could only reduce taxes owed to $0.00.

Under 2001/2003 tax cuts the credit would be $3,000 and it would be fully used regardless of taxes owed. Same $9,000 in taxes - $3,000 tax credit = -$2,100 in taxes (payment from government).
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:01 PM
Response to Reply #15
17. Oh please don't rub it in. I am so overtaxed it isn't funny.
My retirement is being compromised to pay for everyone elses share of taxes.
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Motown_Johnny Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 12:41 PM
Response to Reply #4
16. great info, bookmarked it. But did you notice on that second chart
the was the increase for incomes in the 15,000, 25,000 and 35,000 brackets seem disproportionate to each other




$15,000
350
142
610
661
661

$25,000
350
702
1,210
1,661
1,579

$35,000
350
932
1,433
1,897
2,245



Seems strange to me. This just reinforces my opinion that the Democrats should have a brand new bill to take effect the day after these tax cuts expire.
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louis-t Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:44 AM
Response to Original message
5. It's all marketing. Repigs want you to believe
people making $500,000 are "middle class". All about moving the bar. A Liberal is anyone left of Mike Savage, millionaires are "middle class".
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stray cat Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:46 AM
Response to Reply #5
7. There was a tax break - your incorrect about only those over 500,000
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sinkingfeeling Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:48 AM
Response to Reply #5
10. See the article linked to above. Has all the Bush tax cuts by income level.
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GOTV Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:46 AM
Response to Original message
6. I believe Bush reduced all tax brackets ...
... so if you pay income tax (40%+ people don't) you got a tax cut.

All of the tax brackets will be moving back up if congress does not act to preserve some of them.

Obama has claimed that they will extend the cuts for the middle class.
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stray cat Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:47 AM
Response to Reply #6
8. thanks for a knowledgeable post!
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:53 AM
Response to Reply #6
11. Even those that paid no income tax got a "tax cut"
for example the child tax credit is fully refundable (which means you can get all of it even if you don't pay that much in income tax).

Prior to 2003 tax break. Child tax credit was $500 and NOT refundable.
After 2003 tax break Child tax credit was $1000 AND redunable.

Thus in 2002 say someone's taxes due were $200 before applying the credit. The credit was only worth $200 (of potential $500). Their net taxes due were $0.00.

Same person in 2002 had $150 in taxes due before the credit. The $1000 tax credit turned their $150 tax due into +$850 refund. Net taxes paid -$850.

People pretending there were no tax breaks for the middle class will be very upset come January if they are not extended.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 11:57 AM
Response to Original message
12. Here are the major provisions for middle class in 2001/2003 tax cuts...
Edited on Mon Jul-26-10 12:11 PM by Statistical
First thing is it created a 10% bracket. Prior to 2001, the first $27,000 was taxed at 15%. The tax code split the 15% bracket into 10% and 15%. The first ~$8,000 taxable (single) is taxed at 10%. The rest is taxed at 15%. Net reduction of 5% on first $8,000 taxable = ~$400 per person. Married filling jointly it is first ~$16,000 resulting in $800 more taxes.

Next major change was elimination of marriage penalty. The married brackets were indexed to 200% of single bracket for 10%, 15%, 25% brrackets. Given most couples involve 2 working spouses taxing married at 125% of single resulted in higher taxes in past.

For example in 2000 take 2 persons. Each earned $40,000 in taxable income. They each would pay roughly $7,800 in taxes for a total of $15,600. If they were married however ($80,000 total) they would pay $19,500. That ~$4,000 increase was the marriage penalty. By changing married tax brackets (only for those making less than $68,000 taxable) to exactly double the single rate it eliminated the penalty for being married.

Third major change was moving child tax credit from $500 non-refundable to $1,000 refundable.

Last major change was reduction of 28% bracket to 25%. 3% marginal reduction isn't huge but it can add up to couple hundred bucks for those in that bracket.

Depending on your situation the 2003 tax cuts mean you tax bill is $400 - $2500 less than it will be if those provisions aren't extended.
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Gidney N Cloyd Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jul-26-10 12:02 PM
Response to Original message
13. And as to your second question: He must have found his dad's stash of incriminating pictures.
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