How U.S. Income Tax Cuts Are Really Tax Increases (on middle-class)

[papau]

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_wasik&sid=aUfkWACqky5c

How U.S. Income Tax Cuts Are Really Tax Increases: John Wasik
Oct. 4 (Bloomberg) -- While purring about middle-class tax breaks, U.S. lawmakers who backed them ignored how the cuts would further accelerate state and local tax increases.

The $146 billion ``Working Families Tax Relief Act of 2004'' -- passed by Congress on Sept. 23 -- will actually increase the total tax burden for most households.

The tax savings will hold up like papier-mache when you consider how other taxes shred the federal breaks. The alternative minimum tax as well as state and local levies will continue to balloon as the new law vacuums money from the coffers of local schools, agencies and state governments.

``The decline in federal revenue sharing causes a greater burden on middle-class homeowners,'' said Richard Roll, head of the American Homeowners Association, a national consumer membership organization. ``The federal tax cuts have a concealed effect. It's a detriment.''
<snip>

While Congress has passed legislation to bolster national security and education (``No Child Left Behind Act'') and to fund Iraq and Afghanistan reconstruction, it has shortchanged state and local governments with ``unfunded mandates,'' which are laws passed by Congress without adequate funding given to states to implement them.

The federal government's spending binge and tax-cut shortfalls shifted some $33 billion in bills to deficit-ridden state and local agencies in fiscal year 2005. These expenses are passed on to you through higher sales, excise, small-business and property taxes, according to the National Conference of State Legislatures, an association that represents state lawmakers. As a result, state taxes alone rose by $18 billion from 2000 to 2003.

Combining the effects of record home appreciation with federal-revenue shortfalls, local tax authorities have increased property-tax bills as much as 56 percent during the last four years in some areas. <snip>

[ixion]

1. I needed no analyst to tell me this... I simply

looked at my tax return, and how much I paid and compared that to what I paid the year before when I made EXACTLY THE SAME AMOUNT. What I saw was a tax increase, not a decrease as the chimp has so claimed.

[EmperorHasNoClothes]

2. Not to mention

These are tax cuts into a deficit, which means we will be paying for Cheney's tax refund far into the future. You would be better off taking out a credit card loan.

[papau]

3. So why does the media not explain this to public as Bush signs "Tax Cut"

The BBC media - indeed any free media outside the US would comment on this.

But not our "not controlled by the right wing GOP - we just act like we are" media.

[indepat]

4. Gee, surely the neocons did not realize they were implementing regressive

tax schemes to the detriment of almost all Americans. Gee, who would have thunk it?

[MissMarple]

5. It looks like their entire tax policy is based on smoke and mirrors.

Nothing they do is what they say it is.

"The easing of the marriage penalty in the current tax law, which lowers effective tax rates for dual-income married couples, also can be a wash. The alternative tax affects middle-class married couples with children the most.

``Virtually all (94 percent) of married couples with two or more children and adjusted gross income between $75,000 and $100,000 will be on the AMT by 2010,'' the center's update on the AMT stated recently.

What stings most about the AMT is that if you are subject to it, you can't deduct state and property taxes, which have risen as fewer federal dollars have reached your community. The alternative tax can even be partially triggered by high state and local taxes.

Instead of reforming the way the alternative tax is calculated by indexing it to inflation, two weeks ago Congress punted and extended one-year AMT exemptions, which don't even come close to fixing the long-term problem. "