posted on June 5, 2001 06:55:35 AM new
But you're really getting a complicated morass of delayed enactments, temporary provisions, and a new political football for 2008. It couldn't be designed to effect the outcome of the presidential election in that year, could it. No, of course not. Why would a republican ever want to promise to maintain a status quo when the alternative will have to be a drastic series of steps needed to get out of a deep recession, as in 1992?
I especially like this part:
"Odder still is the estate tax, which is set for repeal at the beginning of 2010, only to be automatically reinstated at year's end".
That looks to me to be a warning. You'd better schedule the deaths of your loved ones to coincide with the effective period of the estate tax repeal, or you'll lose a bundle, eh? Well you will if you don't have a republican sugar daddy to fix it for you.
posted on June 5, 2001 07:37:14 AM new
Gosh, KRS, you sure are being a bit hard on the Beaver, aren't you? He's only been in office for less than six-months, and we all know that that is too short a peroid of time to make any judgements. We have to completely ignore the fact that Dubya is mentally incompetant and "assume" that he will "grow with the office" and will pass better legislation. Funny thing though -- his Tax Cut bill reads like his Bushisms do.
posted on June 5, 2001 08:03:06 AM new
'Morning, Ken and Borillar
Man! This reads like a very bad "joke-for-the-john.."
Great planning...all in place to fall apart the moment he is gone and forgotten (of course, the egomaniac is assuming he'll be in for 2 terms...NOT!), that way, the "others" will be blamed (whoever the others will be by then), for whatever happens.
This is all sand castle in the sky! It's one gigantic multi-coloured Erin pull-over gone wrong, with all the different yarns twisted and scrambled up in one big lump
******** Gosh Shosh!
posted on June 5, 2001 08:35:40 AM new
The estate tax is the biggest joke going. A married couple can leave $1.2 million tax free after death, and if properly done, can give the rest away to heirs while living and it doesn't get taxed at all.
People hear this BS about small businesses and farmers getting "hit" by the estate tax and it was all lies.
posted on June 5, 2001 08:41:29 AM new
I don't think this is designed so much as to create a football for 2008 as it is to allow the President to claim he cut taxes without having really cut taxes.
So many of the proposed cuts are implemented rather far into the future that Bush can make some political hay by "cutting" taxes without risking a near term budget deficit should the economy take another downturn.
And if the Democrats gain control of both Houses in the mid term elections and undo some of the cuts then Bush (and the Republicans) will be handed a convenient club to wield during 2004.
A rather expert shell game from the looks of it...
posted on June 5, 2001 09:00:09 AM new
Yup, you're right! It's all a political ploy. In 2002, the Republicans will be cranking out the slogans again. This time, it'll be: Bush Cut Taxes As Promised! And in the Round Table. Republicans will be having a field day pushing it into our faces and when we try to explain to them what a political House of Cards the bill was, they'll just leave little icons with their eyes rolling upwards.
posted on June 5, 2001 09:07:10 AM new
I'll have to admit that I don't understand a lot of this political stuff - but for awhile I thought it was nice that I'd be getting a check in the mail (I'm single and need all the help I can get). After listening closer to the news the other night, I heard them say that "some may not get a refund at all" and that it depended on how much income tax a person had paid in - and that lower income people may not get a refund at all. Even though I'm in a lower income bracket, wouldn't I have paid as much (dollar for dollar) as someone in the high income bracket? I also heard that a single person could get up to $300.00 and a family up to $600.00. I guess I just don't get it. (shoot, I thought maybe I'd be getting a check in the mail - but maybe not)
posted on June 5, 2001 09:11:29 AM new
Yeah, I thought that was a pretty rotten deal too, Bobbi. If you pay into the system, when it comes refund time, then you ought to get your fair share back. Not in this case. In this case, your Fair Share will be going to pay for those who paid moe into the system than you did. Fair enough?
posted on June 5, 2001 12:22:15 PM newBorillar @ your third post...
Indeed, yes, they will all scream that bushytail kept his promise...to the BIG guys...and we will repeat that the proof of the pudding...etc
******** Gosh Shosh!
posted on June 5, 2001 01:22:31 PM new
When all those big tax checks go out we will see a spike for McDonald's sales when we cash 'em out and go get a burger and fries with Mama.
What the law will do: Starting after mid-July, almost everyone who filed a tax return for 2000 will be mailed a government check - a maximum of $600 for married filers, $300 for single filers - billed as an "advance refund."
The check will amount to 5% of last year's taxable income, up to $12,000 for married filers and $6,000 for single filers.
By July 15, everyone who filed a return for 2000 will get a mailing from the Internal Revenue Service telling how much the refund will be and when it should arrive. Unlike a normal refund, the IRS has no way to deposit it directly into a bank account.
The Treasury Department will mail about 10 million checks a week until The job is complete in early October. The order of the mailing will follow the last two digits of the Social Security number of the filer listed first on the 2000 return.
What it means: The refund is intended to provide a psychological boost To consumers and perhaps spur the economy.
What you should do: Nothing. The government will find you.
Tax rate changes
What the law will do: Income now is taxed at five rates ranging from 15%to 39.6%. The new law will reduce and compress existing brackets so that income will be taxed at six rates ranging from 10% to 35%.
For 2001, a half point will be shaved off the existing rates of 28%,31%, 36% and 39.6%. In 2002, a new 10% rate will be carved out of the existing15% tax bracket. Additional rate cuts will be phased in through 2005.
What it means: Rate cuts will be the centerpiece of the new law and Account for 71% of its $1.35 trillion price tag. When the rate changes fully take effect for 2006 and after, tax information publisher CCH estimates, a married couple with a $300,000 income will save $10,676; a married couple with a $60,000 income will save $700.
What you should do: Tom Pudner of KPMG's federal tax practice says the
Law will require the IRS to adjust withholding tables to reflect lower rates within 60 days of enactment. In most cases, additional take-home pay from less withholding will be small, he says.
Roth IRA/401(k)
What the law will do for IRAs:
* Gradually raises the maximum amount that can be contributed to an IRA
(traditional and Roth) from $2,000 to $5,000 in 2008. After that, the
maximum contribution will be adjusted for inflation.
* Lets people age 50 and older contribute an additional amount, called a catch-up contribution. From 2002 to 2005, the catch-up is $500 a year.
It goes up to $1,000 in 2006.
For 401(k) and other employer-sponsored tax-deferred retirement plans:
* Gradually raises the maximum amount of employee contributions to
$15,000 by 2006.
* Increases the maximum amount of combined employer and employee
contributions in a year from $35,000 to $40,000.
* Lets plan participants age 50 and above contribute an additional
amount, called a catch-up contribution, starting at an additional $1,000 in 2002 and rising to $5,000 in 2006.
* Makes it easier to transfer assets between 401(k) plans and similar
plans offered to government workers and workers at non- profit organizations - called 457 plans and 403(b) plans - when workers switch jobs.
* Shortens the maximum vesting period for employer contributions from 7
years to 6 years, for plans that have gradual vesting, and from 5 years to 3 years for those that defer all vesting until the end of the period.
* Creates a Roth 401(k), which takes effect in 2006. This will allow for after-tax contributions that grow tax-free. Some rules will differ from Roth IRAs.
For retirement plan contribution tax credits:
* Gives a tax credit to lower-income Americans who contribute to a
retirement savings account. The credit is directly deducted from taxes due. It will bein effect from 2002 to 2006. Here's how it works: Single tax filers with adjusted gross incomes of less than $15,000 and joint filers earningless than $30,000 get the maximum credit - 50 cents for each dollar they contribute up to $2,000, which means their tax bill gets reduced by $1,000.
However, if they don't owe any taxes, they don't get a $1,000 refund.
The credit phases out entirely for joint filers earning $50,000 or more and single filers earning $25,000 or more.
What the change means:
* IRA contribution limits haven't changed since 1981, so the law will
let them catch up with inflation.
* Despite increased contribution limits to 401(k) plans and other
similar plans, not all participants will be able to take advantage of them. At some companies, highly paid workers are restricted to smaller contributions based on the contribution rate of their lower-paid co-workers.
* The tax credit provides an incentive for low- and moderate-income
Americansto start saving for retirement.
* But many lower-paid workers will be unable to afford to contribute
much more, some pension experts say. For example, less than 5% of 401(k)participants contribute the maximum amount, according to the Center on Budgetand Policy Priorities, a liberal research organization.
What you should do:
* If you can afford to save more, take advantage of the increased
contribution limits.
* Ask your employer how the law will affect your plan.
* If you qualify, be sure to take advantage of the retirement
contribution tax credit. The tax credit is set to expire after 5 years, so don't wait.
Marriage penalty
What the law will do: The bill makes provisions for eliminating the
"marriage penalty" - the amount that some couples pay in excess of what they'd owe if they were single and filing separately. But, as with many other provisions,the changes are delayed by several years to save the government money.
The elimination of the marriage penalty won't start until 2005 and will
Be phased in over 5 years.
The relief will be delivered both by increasing the standard deduction
For married filers and by adjusting the 15% tax bracket to favor married filers.
What it means: The plan doesn't completely eliminate inequities. Married couples who itemize deductions, for example, get no benefit from the increased standard deduction. And low-income married taxpayers get no benefitfrom the expanded 15% bracket. Says KPMG's Pudner: "It doesn't solve all the problems."
What you should do: Probably nothing.
Child tax credit
What the law will do: It will double the current $500 credit for each
Child under age 17, but phases in the increase over 10 years. The first bump –to $600 - takes effect for 2001, and continues at that level through 2004.
The law also will make the child credit refundable for the first time
for some taxpayers, meaning that if the value of the credit exceeds the taxliability on a return, the IRS will refund the difference.
What it means: The credit will continue to be phased out at upper incomelevels. Determining how much, if anything, is refundable is complicated.
What you should do: This will be a matter to address when filing your
2001 tax return early next year.
Education credits
What the law will do: Taking up where it left off in 1997 legislation,
Congress has provided a broad array of tax benefits to offset education
costs. Among them:
* A new deduction starting in 2002 for college expenses. The value of
the deduction will rise to $4,000 for some taxpayers before being eliminated after 2005. The deduction is phased out at upper income levels but should benefit a broad swath of the middle class while it's in effect.
* Education IRAs are renamed education savings accounts. Starting in
2002, the maximum contribution increases to $2,000 a year, up from $500. Distributions will be tax-free. In addition to paying college costs, money from education savings accounts may be used to pay tuition at elementary and secondary schools.
* The new law will eliminate the $2,500 limit on deductions for interest paid on student loans. It also will eliminate the restriction on such deductions to the first 60 months of repayment. The deduction will continue to be phased out for high-income taxpayers, but the new law will ease even that restriction.
* Starting in 2002, distributions from qualified state tuition plans -
so-called Section 529 plans - will be tax-free. Private colleges will
also be able to offer their own prepaid tuition programs with the same tax benefits now available to public institutions.
What it means: Politicians are responding to the clamor from parents,
students and schools to provide more financial assistance. But education tax breaks will still be one of the most complicated and confusing sections of tax law that the ordinary citizen encounters.
What you should do: If you've dismissed education IRAs in your planning
For college because of their severe limitations, take another look. The new law will make them a powerful tool for meeting future tuition obligations.
Also,
none of the education-related provisions are in effect for 2001, so it may make sense to delay some of your moves until next year.
Estate tax
What the law will do: The exemption from estate taxes, now $675,000,gradually increases to $3.5 million through 2009. At the same time, the top tax rate on taxable estates, now 55%, gradually decreases to 45%. At the beginning of 2010, the tax will be repealed, but just for 1 year.
If lawmakers were to do nothing, starting in 2011, estates valued at More than $1 million would again be taxed at a top rate of 55%.
The prospect that inaction would bring back the estate tax in 2011
Almost assures that Congress will revisit the topic in the next few years.
What it means: If your estate is valued at less than $675,000, not much.
Individuals with large estates will benefit from the increase inexemptions.
What you should do: Don't abandon estate planning, especially if your Estate is complex.
posted on June 5, 2001 10:40:29 PM new"We have to completely ignore the fact that Dubya is mentally incompetant and "assume" that he will "grow with the office" and will pass better legislation."-borillar
Is that what Presidents do know, PASS legislation?
"that way, the "others" will be blamed (whoever the others will be by then), for whatever happens."-shosh
You mean kind of like how Bush gets blamed for the high energy prices?
"A married couple can leave $1.2 million tax free after death, and if properly done, can give the rest away to heirs..."-reamond
Perhaps it should go to you? Or a "community chest"? They did earn it didn't they?
"Even though I'm in a lower income bracket, wouldn't I have paid as much (dollar for dollar) as someone in the high income bracket?"-bobbi355
NO.
Why would you get more of a refund if you already got a refund than the people that actually had to cut a check to the Government on tax day?
"When all those big tax checks go out we will see a spike for McDonald's sales when we cash 'em out and go get a burger and fries with Mama"-gravid
That will help the economy more than the loot sitting around in the pockets of the spend and spin liberals. You see, then McDonalds will have to employ more people to make those extra burgers and fries. Those people will then take their new found money and buy an outfit at the mall, and with all of the McDonalds employees buying all of these outfits, the department stores will have to employ more people...that is how it works, isn't it?
Lets look at the tax brackets courtesy of bnwilk:
"Income now is taxed at five rates ranging from 15%to 39.6%. The new law will reduce and compress existing brackets so that income will be taxed at six rates ranging from 10% to 35%."-bnwilk
Notice that the low bracket is lowered 5% and the high end is lowered 4.6%. Where are people getting this idea that the lower income people aren't going to benefit? Math is math.
The short lived fortnight of disinformation is over.
posted on June 5, 2001 10:47:40 PM new
What you GET is yet to be seen. What is contained in the tax bill are several post dated checks, subject to future modification, and a lot of bull. Look at the thing even ffrom the unsourced description provided above, and wake up to the smoke alarm.
Ask yourself how many millions in refunds will be sent to dead people never to be cashed.
We can heretofor give him a new name courtesy of the Democratic News--He's BOB...Big Oil Bush.
[i]" then McDonalds will have to employ
more people to make those extra burgers and fries. Those people will then take their new found money and buy an outfit at the mall, and with all of the McDonalds employees buying all of these outfits, the department stores will have to employ more people...that is how it works, isn't it?"[/i]
Supposed to sortof, in a simplistic way, but in this case with the way he's sidling up to Mexico and responding to requests to ease the regulations concerning immigration from there, it's more likely that the new McDonald's employees, if that company can afford to hire any with the escalating costs of running their deep fat fryers, will be sending their paychecks in large part back home to be converted into Pesos for mama.
posted on June 5, 2001 10:57:48 PM new
I never believed the Bush administration would administer fair or equitable tax relief, so I ain't holdin' my breath on a piddly refund check
posted on June 5, 2001 11:15:11 PM new
No, we probably would not be having this discussion, as it is a result of fuzzy math, courtesy of the GOP. More chicanery, IMO.
posted on June 5, 2001 11:19:23 PM new
No, if Gore were elected I'd be complaining that my taxes went up to pay for saving the last few Kazakhstani plateau dwelling oglets. And my gas would be $3 a gallon instead of $2 since fossil fuels are an evil thing, and everyone knows the internal combustion engine has to go.
posted on June 6, 2001 12:05:39 AM new
With Gore, if he were able to continue what Bill Clinton set in place, everyone in the country could afford to pay higher taxes and energy bills.
