Rand Paul has ideas of helping Detroit

[cjd]

Thats not true. You can't pay zero taxes and get a refund.

Your common sense is misplaced, these are taxes we are talking about. A HUGE number of people get $REFUNDS$ without paying any taxes. They are called refundable tax credits. Some of the federal ones that you might have heard of:

Child Tax Credit
Earned Income Tax Credit [[EITC)
First Time Homebuyer Credit
American Opportunity Credit
Making Work Pay Credit
Adoption Tax Credit

These are huge drains on the budget. For 2010, the EITC was $55 billion in refunded credits alone. Nearly 20% of all Michigan taxpayers were EITC recipients that year.

Taxes are another HUGE source of welfare that most observers overlook.

[oladub]

Was he talking about a 5% flat federal tax or a combined federal, state, and local tax? A flat tax of 5% on businesses that locate and hire in Detroit might be attractive to some employers. It would make construction in Detroit relatively more attractive than in the suburbs. Democrats have had their shot at it. Establishment Republicans are afraid to show their faces in Detroit. Someone else here have some other new ideas to break out of Detroit's economic matrix?

[Jimaz]

Supporting candidates who advocate minimum government involvement is as counterproductive as deliberately hiring the least-possibly-motivated candidate for a private-sector job.

They want to cut your company until they can drown it in a bathtub! And yet we're expected to choose to hire them to run that company?!

It's insane. Do you really want to hire someone who wants not to work for your best interests?

The Tea Party is nothing more than an obscenely weak attempt to rebrand the conspicuously-vanished Neocons after they wrecked the U.S. economy.

Why is that blatantly obvious fact so energetically disregarded?

[mwilbert]

Your common sense is misplaced, these are taxes we are talking about. A HUGE number of people get $REFUNDS$ without paying any taxes. They are called refundable tax credits. Some of the federal ones that you might have heard of:

Child Tax Credit
Earned Income Tax Credit [[EITC)
First Time Homebuyer Credit
American Opportunity Credit
Making Work Pay Credit
Adoption Tax Credit

These are huge drains on the budget. For 2010, the EITC was $55 billion in refunded credits alone. Nearly 20% of all Michigan taxpayers were EITC recipients that year.

Taxes are another HUGE source of welfare that most observers overlook.

Huge is in the eye of the beholder. The federal budget in 2010 was around $3.5 trillion, so $55 billion isn't exactly a huge chunk. Refundable tax credits are one of the main mechanisms for providing subsidies to the working poor, and while there are certainly other ways society could do that, they probably wouldn't be a lot cheaper. And, of course, while people receiving refundable credits may well not pay federal income tax, they certainly pay other taxes.

[JBMcB]

"Economic freedom zones" = Dickensian existence.

*Exactly* in what way? Please tell me, precisely, which part of the proposal will cause this?

I can only assume that Sen. Paul has already fixed Kentucky's problems. Maybe he should try his social engineering there.

Well, since he took office Kentucky has had a lower unemployment rate than Michigan. So, there's that.

[mwilbert]

There will not be investing. It will be a loophole and a post office box rented on fort street so companies can say they have an address in Detroit to not have to pay federal taxes. Nobody thats large is going to move from wherever their headquarters are to Detroit. Its just not happening.

Since it isn't going to happen in any case, it doesn't matter, but companies open and close facilities all the time. For instance, there is another thread about Boeing looking for a place to make the 777. If they had their taxes reduced dramatically by making it in Detroit, they might consider it. It is surprising, but Boeing has paid a fairly high tax rate in recent years and they could save a ton of money without moving their headquarters or anything they weren't going to move anyway.

That being said, I would expect there would be companies that would create phantom activity here just to move profits to a Detroit operation as a tax avoidance scheme. That would still occupy office space and provide jobs to some people, but it would be at the cost of Federal tax revenue, which presumably wouldn't bother Sen. Paul, but which makes it unappealing to your average senator or congressmen, who are having enough trouble at the moment trying scare up enough revenue to offset just part of next year's sequester.

[mwilbert]

*Exactly* in what way? Please tell me, precisely, which part of the proposal will cause this?

I haven't seen a complete proposal--it may not exist, as he hasn't introduced a bill yet--but the most Dickensian aspects I saw were suspension of EPA regulations and suspension of Davis-Bacon. Mostly it is tax reductions, and as proposed, it will not pass because those reductions can't even vaguely be paid for.

Well, since he took office Kentucky has had a lower unemployment rate than Michigan. So, there's that.

1) Not all that much lower. Both states are in the bottom ten.
2) Which has nothing to do with him.

However, he's a Senator and there isn't any reason he can't look at broader issues. It should be noted that his proposal is in no way restricted to Detroit, and no doubt there are areas of Kentucky that would qualify as "economic freedom zones" under the criteria he has mentioned.

[JBMcB]

the most Dickensian aspects I saw were suspension of EPA regulations

That would be a suspension of ONE EPA regulation - nonattainment for air quality, which Detroit regularly fails anyway. This would just suspend punishment for doing so - just as developing nations are exempt from sections of the Kyoto accords.

and suspension of Davis-Bacon

Which sets wages for contractors to federally funded programs.

Not seeing a compelling argument.

Mostly it is tax reductions, and as proposed, it will not pass because those reductions can't even vaguely be paid for.

Has that stopped very many federal programs before?

1) Not all that much lower. Both states are in the bottom ten.
2) Which has nothing to do with him.

1) Half a percent ain't bad, especially considering it has been historically higher, and sometimes much higher, than Michigan
2) Kinda the point I was making - the O.P. was insinuating Paul should "fix" Kentucky's economy - so if he had the power to do so, it would appear that he has.

[oladub]

Jimaz wrote, "Supporting candidates who advocate minimum government involvement is as counterproductive as deliberately hiring the least-possibly-motivated candidate for a private-sector job.

They want to cut your company until they can drown it in a bathtub! And yet we're expected to choose to hire them to run that company?!

It's insane. Do you really want to hire someone who wants not to work for your best interests?"

It worked with Harding and Coolidge who together brought the US out of a higher unemployment situation than Obama inherited and turned it into 3.6% unemployment in two years while achieving peace and prosperity, releasing Wilson's political prisoners including Eugene Debs, cutting taxes, cutting spending, reducing the size of the military, reducing the debt, and improving the working conditions of working Americans. I'll take those improvements any day compared with the opposite direction Hoover/Roosevelt or Bush/Obama have taken us in. I consider peace, prosperity, and liberty to be in my interest to answer your last question.

The Tea Party is nothing more than an obscenely weak attempt to rebrand the conspicuously-vanished Neocons after they wrecked the U.S. economy.

Tell that to all the tea party candidates who are in contests with corporate funded neocon establishment candidates. McCain is often at odds with Cruz, Paul and other tea party favorites. Neocons are running a primary candidate against Justin Amash in Grand Rapids. These contests between small government sometimes libertarian Republicans and corporate funded establishment Republicans are going on across the country. If you are looking for neocons though, Hillary is a good choice. She voted to give Bush the authority to wage war in Iraq.

[mwilbert]

That would be a suspension of ONE EPA regulation - nonattainment for air quality, which Detroit regularly fails anyway. This would just suspend punishment for doing so - just as developing nations are exempt from sections of the Kyoto accords.




Which sets wages for contractors to federally funded programs.

Not seeing a compelling argument.

I wasn't claiming they were compelling, I was just listing them. As I said, I don't believe there is a fleshed-out proposal yet so we don't know what will be in it.

Has that stopped very many federal programs before?

Yes.

1) Half a percent ain't bad, especially considering it has been historically higher, and sometimes much higher, than Michigan

Actually, Kentucky's unemployment rate hasn't been higher than Michigan's for at least a decade. Nothing to do with Mr. Paul.

2) Kinda the point I was making - the O.P. was insinuating Paul should "fix" Kentucky's economy - so if he had the power to do so, it would appear that he has.

He doesn't and he didn't. And of course unemployment is hardly the only measure of "fixed". For instance Kentucky has a poverty rate of almost 20%, which puts it in the bottom 5 in the US, and much higher than Michigan's. Also not due to Mr. Paul.

[cjd]

Huge is in the eye of the beholder. The federal budget in 2010 was around $3.5 trillion, so $55 billion isn't exactly a huge chunk. Refundable tax credits are one of the main mechanisms for providing subsidies to the working poor, and while there are certainly other ways society could do that, they probably wouldn't be a lot cheaper. And, of course, while people receiving refundable credits may well not pay federal income tax, they certainly pay other taxes.

I wasn't thinking 'huge' in relevant terms. $55 billion is $55 billion, irrespective of what you measure it against. Measured against my budget, that's incomprehensible; measured against world GDP, its miniscule. But the fact remains that $55 billion is a lot of money, one of my points.

"Subsidies to the poor" as you say is just another way of saying welfare [[not implying that welfare isn't needed or should be cut).

You are correct, they do pay other taxes in the form of payroll, sales, and property taxes. Payroll taxes are, in government terms, a very important [[and increasing) share of tax receipts- rising from about 10% of total receipts in the 1950s to nearly 40% today. Why isnt anyone railing against payroll taxes?

[cjd]

Just curious, anyone here against Rand Paul's proposal that supported film industry 'subsidies' or other state tax incentives/grants?

If so, why?

[mwilbert]

"Subsidies to the poor" as you say is just another way of saying welfare [[not implying that welfare isn't needed or should be cut).

I said to the "working poor", as they are the only ones eligible for EITC.

You are correct, they do pay other taxes in the form of payroll, sales, and property taxes. Payroll taxes are, in government terms, a very important [[and increasing) share of tax receipts- rising from about 10% of total receipts in the 1950s to nearly 40% today. Why isnt anyone railing against payroll taxes?

Primarily because they want to retain the tie between earnings and Social Security. That's understandable, but unless other measures are taken to make sure people can be reliably employed, unlikely to last.

Paul's proposal cuts the employer and employee payroll taxes to 2%.

[Wesley Mouch]

Huge is in the eye of the beholder. The federal budget in 2010 was around $3.5 trillion, so $55 billion isn't exactly a huge chunk. Refundable tax credits are one of the main mechanisms for providing subsidies to the working poor, and while there are certainly other ways society could do that, they probably wouldn't be a lot cheaper. And, of course, while people receiving refundable credits may well not pay federal income tax, they certainly pay other taxes.

Someone check my math. I see it as about 1.6% of the federal budget. If that's not huge, I don't know what it.

But wait a minute. I'm in favor of this. I think EITC is a great idea.

To put it in perspective, defense spending is about 675 billion. So these programs are about 8% of the size of the defense department.

Size isn't the question. The question is whether Refundable Tax Credits are a good idea -- rather than the other ways we toss money at poverty. They are very efficient. People get cash. Administered by the IRS along with their normal day jobs. No federal department with overhead. No Kwame Kilpatricks stealing it. I like Refundable Tax Credits as a way to reduce poverty.

[Chinman]

Your common sense is misplaced, these are taxes we are talking about. A HUGE number of people get $REFUNDS$ without paying any taxes. They are called refundable tax credits. Some of the federal ones that you might have heard of:

Child Tax Credit
Earned Income Tax Credit [[EITC)
First Time Homebuyer Credit
American Opportunity Credit
Making Work Pay Credit
Adoption Tax Credit

These are huge drains on the budget. For 2010, the EITC was $55 billion in refunded credits alone. Nearly 20% of all Michigan taxpayers were EITC recipients that year.

Taxes are another HUGE source of welfare that most observers overlook.

did you go to tax school or take an economics class?
look at peoples tax form on april 15th and you will find that they INDEED pay taxes. they just reduced their tax burden by using deductions that the Government gives you. Try looking into the Corporate World where deductions create a net loss and NO TAXES are paid.

[mwilbert]

Someone check my math. I see it as about 1.6% of the federal budget. If that's not huge, I don't know what it.
[...]
To put it in perspective, defense spending is about 675 billion. So these programs are about 8% of the size of the defense department.

I think you answered your own question.

The question is whether Refundable Tax Credits are a good idea -- rather than the other ways we toss money at poverty. They are very efficient. People get cash. Administered by the IRS along with their normal day jobs. No federal department with overhead. No Kwame Kilpatricks stealing it. I like Refundable Tax Credits as a way to reduce poverty.

Yes, I think the EITC is generally a good way to handle this. There are other forms of wage subsidy that might work better [[or not), but it isn't bad. But by far the biggest and most effective anti-poverty programs are Social Security and Medicare, and they are both very efficient even though they require administration.

[cjd]

did you go to tax school or take an economics class?
look at peoples tax form on april 15th and you will find that they INDEED pay taxes. they just reduced their tax burden by using deductions that the Government gives you. Try looking into the Corporate World where deductions create a net loss and NO TAXES are paid.

1. Yes and yes.

2. I see hundreds of personal tax returns a year. If you did, you would see MANY people don't pay INCOME taxes but get refunds. Many of these do pay taxes of one sort or another [[mostly payroll) but you wouldn't see that on their tax return as you suggest, you would see that on their employers' 940/941. A not insignificant portion of those that don't pay income taxes, however, also don't pay payroll taxes either. See http://www.taxpolicycenter.org/taxto...households.cfm.

3. Not to get technical, but we aren't talking about deductions, we are talking about credits here, particularly refundable credits.

4. Why do you care whether a corp pays any taxes? What can a corp do with its $$? It can pay it to shareholders, which dividends will be taxed [[at a preferential rate), it can pay salary to its workers [[which will be taxed at their rate), or it can invest in capital [[which creates other jobs making that capital- and money flowing to another entity). A company can hoard cash, but only for a finite time before it must do something with it. Under any scenario, the cash makes its way to someone that is paying taxes.

[313WX]

That being said, I would expect there would be companies that would create phantom activity here just to move profits to a Detroit operation as a tax avoidance scheme. That would still occupy office space and provide jobs to some people, but it would be at the cost of Federal tax revenue, which presumably wouldn't bother Sen. Paul, but which makes it unappealing to your average senator or congressmen, who are having enough trouble at the moment trying scare up enough revenue to offset just part of next year's sequester.

I find the "Phantom Activity" scenario you presented interesting.

I'm thinking about Comerica Bank actually when you mention it.

Much of Comerica's administrative and employee-base is here in Detroit [[for example your bank statements and Comerica bank cards that are sent to you in the mail all have a Detroit PO Box). Yet, the HQ along with members of upper management is all officially in Dallas. Beside the fact that the company's current CEO is a native Texan, it makes you wonder if they merely set up the HQ in Dallas simply to avoid the MBT.

[Baselinepunk]

The top 15% of wage earners pay 85% of all taxes while nearly half of adult americans pay zero taxes and get refunds above what was taken out of their earnings! OBM Statistics......

Please. Enough of this bullshit talking point. It's really fucking old.

[cjd]

Please. Enough of this bullshit talking point. It's really fucking old.

What is old and BS is people calling a fact a talking point and saying they are tired of hearing it. It does nothing to make the purported fact invalid. If you want to argue that the fact is wrong, that's one way to start- and maybe it is or maybe its correct with one or more additional qualifiers. If you want to argue that the assessment of taxes as purported is equitable because some of these people are poor as dirt [[prolly not that difficult of an argument) that's another way to rebut the 'talking point'. Merely saying you are tired of a fact being repeated, is very lame and does nothing to move the ball forward.

[mwilbert]

What is old and BS is people calling a fact a talking point and saying they are tired of hearing it. It does nothing to make the purported fact invalid. If you want to argue that the fact is wrong, that's one way to start- and maybe it is or maybe its correct with one or more additional qualifiers. If you want to argue that the assessment of taxes as purported is equitable because some of these people are poor as dirt [[prolly not that difficult of an argument) that's another way to rebut the 'talking point'. Merely saying you are tired of a fact being repeated, is very lame and does nothing to move the ball forward.

I'm not sure I agree with you--you can have a fact which is true but misleading, and continually bringing it up without context is, in fact, BS.

I would say this "fact" is probably fairly close to being true, but lacking a bit of context. I couldn't find that exact percentage, but according to 2010 IRS data, the top 12.8% of Americans [[over $100,000 income) paid 70.5% of the taxes, which, if correct, would make it pretty much impossible that the top 15% could pay 85%, more likely a bit under 75%. Still, that is a lot. But since that same top 12.8% earned 59.4% of the income, it doesn't seem particularly high.

[Patrick]

http://www.huffingtonpost.com/2013/1...n_4409356.html

Hilarious

[Hypestyles]

didn't Newt Gingrich already propose the 'tax free city' idea? Where the **** are city services supposed to come from?

[Novine]

"The top 15% of wage earners pay 85% of all taxes while nearly half of adult americans pay zero taxes and get refunds above what was taken out of their earnings! OBM Statistics......"

It's false because "all taxes" includes payroll, sales, gas, etc. taxes which the rich pay in much smaller percentages, if at all, compared to working stiffs. How much was Mitt Romney paying annually in payroll taxes? Zero? It's not ever accurate for federal income taxes, on which the original claim is based.

[rb336]

The top 15% may pay 85% of the taxes, but they control 98% of the wealth. They should pay 98% of the taxes