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Originally posted by Timber Loftis:
[QB] Wonderful wonderful post Draconis Rex. [img]graemlins/thumbsup.gif[/img] I'm glad someone in the trenches can confirm what is widely suspected.
I have a question: I know a pensioner who argues that the dividend cut will benefit them greatly, as they get monthly dividend checks and the % rate will drop. True or False?? Thanks for any reply.
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A pensioner? Pensions are ordinary income. Therefore, it will not help them at all. If they are a pensioner who also supports themselves with non-retirement-trust dividends and gains, then yes. But only to the extent that it will make a real reduction in their taxes or provide them an opportunity to aviod convernting equities into cash.
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Other things lauded as helping middle income earners are:
1. Marriage penalty reduction
2. 2% decrease in payroll taxes
3. The already-discussed $400/child credit increase
What about these?
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1. The marriage penalty is a bit of a misnomer and only applies when you have two working spouses. Second, the greatest effect is on high-net-income DINKs where both spouses have high incomes. A man who makes 100K and has a wife who works part-time at Restoration Hardware (6K) to get the employee discounts is hardly suffering from the "marriage penalty."
Also, the true marriage penalty is the difference between the taxes if each person filed as "single." Only if there isn't a large gap between the relative incomes is there any real penalty.
OTOH, if you've got a stay-at-home spouse, you have a "marriage benefit." A lower tax bracket on the same income and a higher standard deduction.
So, there is not a real "penalty" per se. Some benefit, some don't.
2. A reduction in payroll taxes is stupid. There is a projected 44 TRILLION deficit in future obligations to retirees. To cover this, a 66% increase in the payroll taxes is needed to build up the surplus required for Social Security to function.
3. It's been discussed. The fastest way to stimuate an economic recovery through a tax break is to funnell the money to the less-advantaged. This money will be spent on consumer goods.
If you give it to the rich, they have a tendency to save the money, reducing the effect. At least if anything they taught in economics over the last 30 years is true.
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Sorry to be so detailed, but if I can get an expert on the hook to edu-ma-cate me, I will. 
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And you call-out others rude? :rollseyes: The word is hypocrite.