Thursday, December 30, 2004
Option 5: We were astounded to read in the Washington Post, the following story, Bush expected to delay major tax overhaul:(emp add) Under what has become known among lobbyists on K Street simply as "Option 5," Bush's previous tax proposals would be enhanced, not replaced. Washington would create lifetime savings accounts and retirement savings accounts to replace the current array of tax-preferred savings accounts for retirement, education and health care.
A lifetime savings account would allow each person to save up to $5,000 a year, shielding capital gains, interest and dividend income from all taxation. Unlike existing tax-favored accounts, the money could be withdrawn at any time for any reason. A family of four could shield $20,000 a year from investment taxation, and since few families could save that much, capital gains, interest and dividend taxation would effectively end for the vast majority of Americans, the Treasury study said.
The plan would also repeal the alternative minimum tax, the parallel income tax system that was set up to ensure the rich pay taxes but that increasingly ensnares the middle class. For low- and middle-income taxpayers, the standard deduction would be significantly increased.
The current four tax-filing categories -- married filing jointly, married filing separately, single and head of household -- would be simplified to just married couples and all others. The six current income tax rates -- 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent -- would collapse to four, losing the 28 percent and 33 percent brackets.
And corporations would be allowed to immediately deduct -- or "expense" -- from their taxes a portion of the cost of business investments, instead of having to slowly write off those costs based on complex depreciation allowances.
To cover the cost of the tax changes, the plan would tax the value of an employee's health insurance benefit as if it were income. "Most Social Security benefits" would also be taxed as income, the report says. Finally, the plan eliminates the itemized deduction for state and local tax payments.
posted by Quiddity at 12/30/2004 08:12:00 AM
6 comments
I can see the logical progesssion in this strategy: workers living in corporate and government-owned domiciles "rent-free" and 78% of their income paid as taxes to support the infrastructure. The remaining 22% will be paid for food, health care, and clothing.
"And you won't need cars. We'll drive you to your new assigned jobs in company owned buses."
Lurch
You know, if you're already really rich, this is not a bad plan at all.
And I thought it was the blue-collar southern Reagan Democrat that was supposed to be the winning leverage for the Busheviks. Ain't it nice to see how quickly the Busheviks screw their constituencies to create a rich guy's paradise.
No wonder they have their "Red Guards" of Freepers and Little Green Raelians out conducting Cultural Revolution against "class warfare" and "socialism".
Now where are those coal-miner's songs from the Gilded Age about living in a company town? And where is Mother Jones to organise the troops?
- Tom - Daai Tou Laam
Okay, here's my revamped sentence, edited to reflect economic reality:
A family of four could shield $20,000 a year from investment taxation but few families could save that much.Just like the lower and middle classes to fail to take advantage of such a wonderful give-back. Oh, well, you can lead these people to financial waters but....
And then there's that added swift kick to the family finance scrotum: let's tax whatever precious few medical benefits the little bastards get as income. Oh what games they'll come up with for determining the free-market value of your insurance benefits. Any bets that some poor souls will opt out of medical coverage because they can't afford the taxes on it?
Grace Nearing
Astounding? More like ass-pounding.
Hey. Nice blog. You seem to have a good idea here. Just wanted to leave a comment, enjoy.
regards,
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