"Knowledge will forever govern ignorance"

--James Madison--

"The real division is not between conservatives and revolutionaries, but between authoritarians and libertarians"

--George Orwell--

Wondering Aloud About Taxes and Stuff

Lots of criticism of the President lately. Most of it is well deserved
But I feel that I should ask myself a few questions. What would I do if it were me? I ask myself this question frequently, from the Clinton administration on.

For example, during the Bush administration, I would have done pretty much everything differently. As an example, I would have tried to find a way to satisfy American bloodlust after 9/11 without actually invading another country. I wouldn't have wanted to start a second war, either.

Like I said, just about everything.

Then there's EGTRRA, the 2001 treasury busting tax law. Taxation is something I know quite a bit about, so it's easy to analyze what I would have wanted, what I would have done.

I would've vetoed the mofo. Congress couldn't have done shit about it, either. Nowhere close to enough votes for an override. I would have let it be known that a more sensible tax bill would be needed. Or none at all.
They could call me a "tax and spend Democrat" all they wanted. Who cares? If I were President (which is obviously not going to happen), getting re-elected would be a lower priority than doing the right things for the country.

What if I were elected instead of Obama, though? Well, for starters, my campaign platform would have been much different. No public option in the health plan, as an example. Rather, an extension of medicare to all (as it was originally intended), and a "private option" for supplemental coverage, although it would be offered through the public plan as well.

Instead of ramping up Afghanistan, I would pull the hell out as quickly as practicable, leaving a small force behind to try to help the people to stabilize the place. After all, we destabilized it.

When Congress refused to give me the money to close down Gitmo and relocate the prisoners, I would have told my military personnel to leave, and leave the prisoners behind, with rations adequate for a month or so. Also to unlock the gates and leave them open. We don't have any real reason to hold on to Guantanamo Bay anyway.

So, back to EGTRRA. The chorus around here has been that it should have been allowed to expire in its entirety. You might want to rethink the "entire" part, though. There's a baby in that bathwater.
When Clinton and Congress put lifetime restrictions on AFDC and other welfare benefits, they left in place what is now the biggest welfare program that we have. The Earned Income Tax Credit. It's meant mainly to assist the working poor who have children. The childless can also get the credit, if their income is low enough. But it isn't much. It tops out at $457 for the childless, and goes away at $13450 of earned income. But for those working poor with children, it tops out at $3050 for one child, $5036 for two, and $5666 for three. It goes away completely at $48362 of earned income.

Previously, it only increased benefits for two children instead of three, and topped out at $3888. It went away completely at $31,152.

But wait! That's not all. EGTRRA also expanded Clinton's child tax credit, originally $1000 per child for up to two children. It added a third child, and made the credit at least partially refundable (originally, it was non-refundable, and could only reduce your tax to zero). 

So it became another piece of this last of the big time welfare programs. EGTRRA also accelerated standard deductions and personal exemptions. It created new lower tax brackets. 5% and 10% for the poor, who had been paying 15% on their taxable income, pre EGTRRA.

All of this, and more, gave rise to the current situation, where the bottom 50% of the population by income in the US pays 3% of the income tax. Payroll tax, of course, is a whole 'nother story, and deserves a separate article.

Conservatives hate that, but they created it. Too bad. It definitely helps the poor, and mostly at the expense of those who can afford it.

As always, I did example returns to help quantify and illustrate all of this. Anyone who wants to see them can e-mail me @ 

I'll send you the pdf's. The returns are always loosely based on real tax returns, but with all identifying info stripped out, and slightly changed numbers.

Let's look at the Generic Family. Joe Generic is a landscaper, and Sue Generic is a homemaker. They just barely manage to manage, and only with help from Sue's parents. They have three children.
For 2010, Joe made $22357, plus $5299 in unemployment benefits. After the standard deduction and personal exemptions, there is no tax. But they get a $8061 Federal refund, enough to pay almost 11 months rent. This refund consists of:

$4357 EITC
$2904 Refundable child tax credits
$800 Stimulus payment (Making Work Pay Credit)

Had EGTRRA expired, their refund would have been $1848, all of it EITC. 2 1/2 months rent. 3 1/3 months with the stimulus payment, which was passed separately.

At this point, I'm kind of flummoxed. I don't want to renew all of EGTRRA, just the parts that help the working poor and lower middle class. Let the tax breaks for the wealthy expire. No problem with that.
But how would I get Congress to present me with a bill that only preserves the part of EGTRRA that the Teabaggers would be happy to get rid of?

I don't know. Congress presented the President with an all or nothing proposition. Do I throw the baby out with the bathwater, or try to find a way to get Congress to give me what I want? How do I go about that?
Maybe it would have helped if I was someone with more legislative talent and experience. Somebody who knows which heads to bust, and when.