TAX DEBATE

An article in a local newspaper on April 8th 2001 discussed the Bush tax plan using three families/persons from the three economic categories, low income, middle income and high income. There are some interesting observations to be made from this article.

The article stated that a low income family of four, two adults and two children, would see no tax relief from the Bush tax plan. Now before I get into the meat of the thing here I have to do some math that the article was a little short on. 

• The article said that the gross income of this family was $15,000.00. The father making $8.00 per hour and the mother making $6.50 per hour. This is the first place I have a problem, there are 2080 work hours in the year, if he worked 2080 hours at $8.00 per hour his income was $16640.00. That amount is $1640.00 more than reported for the entire family income for this year. The wives income for 2080 hours worked at $6.50 per hour should have been $13,520.00. When you add the two together they earned $30,160.00. (I guess they only worked about half time this year.)

The article went on to say that because the family qualified for the Earned Income Tax Credit they did not pay ANY federal income tax; in fact they got a check from IRS for $3,402.00. The article said that the biggest monthly expense for the couple was their car payment of $275.00 per month. That comes to $3300.00 per year. So since they don't pay any taxes and get a Bonus check from those who do pay, we are paying their car payment for them.

Under the Bush plan they would get an additional $400.00 in the IRS welfare check, but the article says," Under the original Bush tax cut, they would not qualify for any lower income tax rate, a bigger child tax credit or a deduction for dual income couples." How can your rate be lower if you pay nothing? Five percent of Zero is Zero!   Not only that but if you look at the math here you can see that their tax bracket is actually a negative 23 percent! I guess the Democrats want that rate to be a negative 50 percent! 

The next time you look at the budget breakdown, look at the numbers for social programs and add 19.8 million people on the Income Tax Welfare rolls to that figure. According to the report the average IRS welfare is $1682.00 for each of those 19.8 million that is being distributed by the IRS,  but not counted as welfare in the budget breakdown. My calculator will not go that high but I think you can figure out it's a substantial amount of money being re-distributed without being counted as welfare.   I don't know what else to call it.

Ike Harley

from http://www.gulf1.com/COLUMNS/ike/index.htm