Thinking Out Loud

I know this may sound kind of Forbish (Maybe Mitch will even like it) but here's an idea.

I know that not all states have a sales tax, but how about a federal rebate of state sales tax for American purchases. This would stimulate the American economy, save consumers money, therby encouraging spending. At the same time, it would be a State aid bill since it is the Fed who would rebate the sales tax, while the States still get the revenue. Some formula would have to be determined to equalize the varying (or lack of) Sales tax.

Now THAT would be true, immediate, economic stimulus while still providing State aid!

The Doctor is in . . .

The Doctor is really no doctor at all, just a great friend of mine who I have known for over 20 years. Most of us go through life, adjusting the hierarchy of our friendship list quite often. I have been fortunate enough to have had 'The Doctor' on the top of the list for quite some time. He is about as far right, as I am left, meaning we do huddle close to the center, and share many views on what some say are the responsible issues. Subsidizing the rich, is not one of them . . . .


So Doc states:
Rich Person gets a higher % of the relief....so.... They are the ones with the most working capitol at risk that invest in companies that create jobs, etc. etc.

I don't have a problem with 'incentives' to promote growth, but that is not what this does. It takes money away from those who can use it, and gives it to those who will jeopardize it!

So maybe if nothing else it simply corrects a long term problem of double taxation. Will it help the economy? I think to some degree yes.

But NOT stimulate. Stimulus implies a level of immediacy, put money into the economy! They shouldn't call the dog a cat. That is where their credibility is jeopardized. Again, the Right is notorious for calling something what people want to hear, but not having it do the job proposed.

One could argue there has been no significant immediate tax breaks to the "rich" yet. Most all the benefits were future benefits beginning in year 4 and gradually increasing through the ten year plan.

We are not talking about the 1-3 percent drop in the marginal tax brackets. We are talking about the immediate need to put money in the hands of consumers who will stimulate demand, therefore creating a need for supply, THIS is what creates jobs and improves the economy

Don't cry for the banks, they will be making lots of loans and as long as there is a good spread to the fed discount rate they will make money (unless they make bad loans) The market is risky and there is more than enough capitol for them to loan out.

If this goes through, I will pull my money out of the banks and begin a more aggressive Stock portfolio. How many others will do this!!

It makes me cringe when I hear Democrates wanting to put money into the "right Hands", Code words for people who didn't earn it or pay for it but are entitled to it and will spend it... Lower taxes, Lower spending are the only answers and of course letting the cycle of the Bear market run it's course

I clarified my disdain for putting money into the hands of those who did not contribute. My definition of 'right hands' is putting money into the gloves of those who will do with it what you intend them to do. A $100.00 in my hands will be spent, thereby stimulating the economy. That same $100 in the hands of the rich will be placed in the stock market craps table and POOF . . . . Possibly gone, like it never existed.

Flash

Oooooo . . . The big tax relief plan

2003 - - 2004/2005 - - 2006/2010
38.6 - - - - 37.6 - - - - - - 35.0 %
35 - - - - - 34 - - - - - - - - 33 %
30 - - - - - 29 - - - - - - - - 28 %
27 - - - - - 26 - - - - - - - - 25 %
15 - - - - Same - - - - - - - Same
10 - - - - Same - - - - - - - Same

Ya know, it is one thing to hear the buzzwords and wonder why, but then to see the actual numbers. atta boys to the wealthy, with NO relief to the middle class. The Bush tax Relief act provides NO relief to almost HALF of those who filed tax returns

Marriage Penalty relief. Just in case you didn't know, Bush's proposal for this relief doesn't effect anyone that itemizes deductions. The Head of Household deduction would still be a better filing status even under Bush's plan. He simply wants the standard deduction for marrieds to be double that of a single, Those of us that itemize, would not be effected by that at all. Also, only the amount of income taxed at 15 percent for married couples would increase to twice the amount of income taxed at 15 percent for single filers. The rest would remain relatively unchanged. My point is it is peanuts, not Gold, and the buzz to eliminate a marriage tax is merely political, because even Bush won't address the REAL marriage penalty. Classic Right Wing Spin, call it what people want to hear, but have it NOT do what they think it is doing.

The only problem with the Left is they are to damned honest.

Tax Pawlenty

Now he says he will withhold and cut State monies to Counties and Cities requiring them to increase Property taxes just to make up the difference. Sorry, Tim 'No new taxes' Pawlenty will be raising my taxes as predicted . . . 'If it walks like a duck, and talks like a duck . . . . .

Flash

Help me again try to support a tax cut that predominantly gives money back to the wealthy who will only dabble in the market with it and NOT create jobs or invest in their businesses like they have NOT done in the past 2 years..

Dividends reported on tax returns breakdowns like this ( I don't know why the 200,000 - 1,000,000 figure is missing, but you can see the obvious trend)

under $50,000 (15.2 Million returns, $26.9 billion)

50 - 100,000, (10 million, $27.1 billion)

100-200,000 (4.8 million, 23.8 Billion)

Over 1,000,000 (200,000 filers, 25.4 Billion)

So what will this do, certainly not stimulate purchases and the economy. In Fact, this could seriously damage the banking industry and effect long term loan rates and the ability for small and medium sized business to obtain money. The money supply will, in effect, tighten as middle class investors pull their money out of banks to invest in the volatile stock market. Investment in the stock market does NOT do anything for the economy. Putting money in the hands of those that will spend it stimulates economy.

The quicker and broader stimulus offered by the Democrats is at least an attempt to put the money in the right hands. I dissagree, however, with putting money into the hands of those who never put anything in. That is the other extreme, and is just as rediculous as giving money back to those who don't miss it.