Feds Set to Screw the Middle Class Again!

H

HB Bear Too_IHB

New member
<em>Many of middle-class families in OC are still stinging from being excluded from Bush's tax rebate program. While many of our friends got checks of up to $1,200, we got nothing. The reason? We made a bit too much money to be included and were summarily "phased out" of that particular gravy train.</em>



<strong>Guess what? You're about to be "phased out" again.</strong>



Yesterday, the House passed HR 3221 aka the American Housing Rescue and Foreclosure Prevention Act of 2008 on May 8, 2008. This piece of homedebtor rescue legislation spends billions helping those folks in trouble keep their homes, to refinance existing mortgages, for cities buy blighted properties and so on. So, if you're were unfortunate enough to have bought a house that you couldn't afford, the taxpayers are here to bail you out.



You're welcome.



Then there's this little provision called "First-Time Homebuyer Credit" which essentially says that if you are a first-time homebuyer then you can get a $3,750 federal tax credit if you are an individual or $7,500 if you are a couple. That, unless you're middle-class, then you get nothing.



That's right, if, as an indvidual, you make more than $90K a year or a couple that makes more than $160,000 a year, then your tax credit amount falls to zero. Zero as in nothing. Zero dollars, zero help, zero consideration by your legislators. Zero, just like the tax credit you got as part of the Bush stimulus package.



That's right, once again the Congress has left the American middle class out in the cold. If you're Bear Steans, the feds fall all over themselves to throw our tax dollars at you. Buy a house you can't really afford, never mind the feds will finance it for you at taxpayer expense. But work hard, attain some level of success and then exercise fiscal responsibility and all we get from Congess is a big F#@K YOU!



The middle class pays an egregious amount of tax. We're in higher tax brackets based on what earn, but lack the resources and tax shelters of the rich; so we're left paying more than those less fortunate than us and more than those more fortunate than us. If anyone needs a f@#king tax break is it us, the middle class. But yet again, we're left out in the cold.



As you can probably gather, I am mad as hell about this and I'm not going to take this sitting down. I'm getting ambiguous information on the state of the bill in Senate at this point, but if hasn't passed yet, I am going to call my Senators and give them a piece of my mind. If it has, I am going to place a call to W's office, supporting his presumptive veto. Once I get this sorted out, I will post my efforts to this site.



I am going to be damned clear that the tax credit phase out, as written, is affront to the middle class in America. I am going suggest either doing away with the income restriction all together or raising the limit to $125,000 per indiviual or $250,000 for a couple--that is to say, inclusive of the middle class.



Once I get this sorted out, I will post what I've found and names and numbers of those we need to hold account here.



This is bullshit and I am not going to take it any more.



You shouldn't either.
 
<strong>How exactly do you define "middle class"?</strong>



To me, household income in the top 20% is not middle, but upper.



According to the 2005 census estimate, the breakpoint for the upper quintile is $88k in the US, $102k in California.





So it sounds like you are saying that everyone below the 95th percentile should get government handouts?
 
No, he's saying he's making over $160K in his household and he's just barely making it.



Sniff sniff.



There are people in California who don't have potable water to drink. And you're all bitter because you didn't get $1200 of your money back from the gmnt AND won't get the "First Time Homebuyer Credit?"



Tell you what. Tell your boss you want a pay cut so you can get your $7500 tax rebate (I'm sure they'll accomdate you) or STFU.
 
I can see how you can make over 160K and barely be making it, if HB bear bought an overpriced house during the bubble, that will be taking up a big chunk of his take home. Then he would be criticized for making poor financial decisions and spending more than he should have. If I remember correctly the IPO family income approaches 200K and after all of their expenses it didnt seem like there was a ton left over, or as much as you would think for a family that makes almost 200K.



HB Bear - it seems you make a good chunk of change, an income that most people dont make. You wont get any sympathy from most folks since they would rather pay more taxes or not get tax rebates/credits in exchange for the kind of money you make, which is understandable. I understand where you are coming from though, our household income exceeds the $250K limit you suggest so we would get assed out anyways. Ive just accepted that im going pay a shitload a taxes for the rest of my life, not much you can do about it. What does suck is that Ive worked hard to make the money i do and the harder i work to make more money the less benefit i get out of that incremental effort. Again, im not going to get any sympathy from anyone, nor do i expect it. That is just how the system works.



Would it have been nice to get one of those $600 rebate checks? Yes it would have. But the fact of the matter is that I didnt need it and its much better served in the hands of some family who is struggling to feed their children or dealing with the insanely high gas prices.
 
Thanks for reminding me that I need to call the White House's comment line which was on the blog today. It was closed by the time I got around to calling the numbers. Here is the blog:



Comment by NewToTheArea

2008-05-09 01:53 PM

PLEASE CALL THE WHITEHOUSE AND RICHARD SHELBY!!!



Everybody who comments and reads this blog needs to take 60 seconds and call the Whitehouse and Richard Shelby?s office and tell them you support the Veto of the housing bailout. It doesn?t take long and it is hopefully a little more productive than our justified rants on this blog. We will pay for the estimated 33% of the homes that will enter this bailout program and still default. The Washington Post already wrote a piece about it.



Just pick up the phone and call. It?s easy.



The Whitehouse - 202-456-1414



Richard Shelby?s office in DC - 202-224-5744
 
[quote author="no_vaseline" date=1210413202]No, he's saying he's making over $160K in his household and he's just barely making it.



Sniff sniff.



There are people in California who don't have potable water to drink. And you're all bitter because you didn't get $1200 of your money back from the gmnt AND won't get the "First Time Homebuyer Credit?"



Tell you what. Tell your boss you want a pay cut so you can get your $7500 tax rebate (I'm sure they'll accomdate you) or STFU.</blockquote>


No, I never said that my family is barely making it; we're actually doing just fine. Our expenses are way below our incomes. We live not only within our means, but<em> below </em>our means and have done so my whole life. But that's not the point. And, I don't deny that there are people/families that are in financial situations orders of magnitude worse than mine. They are out there and they are many. But I don't think resolving their situation precludes all other priorities, either.



The point is our government is dolling out billions and billions of dollars to right this housing situation and stimulate the economy and damn it, I want my slice of the pie. If I was stupid enough to buy a house, I'd be getting a slice. If I made a less money, I'd be getting a slice. If I ran Bear Stearns, I'd be getting a slice. But since I was rational and don't run a hedge fund built on a house of cards, I get nothing.



The tax policy as it stands rewards the reckless, punishes the rational. And that, my friend, can lead to no good.
 
[quote author="freedomCM" date=1210410973]<strong>How exactly do you define "middle class"?</strong>



To me, household income in the top 20% is not middle, but upper.



According to the 2005 census estimate, the breakpoint for the upper quintile is $88k in the US, $102k in California.



So it sounds like you are saying that everyone below the 95th percentile should get government handouts?</blockquote>


Well, the system today is such that if you and your spouse make less than $140,000 in AGI, you are entitled to 100% of the tax credit. Between $140K and $160K you get some of it and above $160K you get none of it. So, on that 20K of additional income between $140K and $160K, you lose:



$7,500 Tax Credit for Home

$1,200 Bushie Tax Credit (w/2 kids)

$7,200 Federal Income Tax (would have paid regardless)

$1,800 State Income Tax (ditto)



For a total of $17,700 or an effective marginal tax rate of just under 90%.



Does that seem reasonable to you? Is it really a "handout" to ask to pay a marginal rate of less than 90%?
 
[quote author="skek" date=1210414430]So lemme get this straight, no_vas. So long as there is anyone in California living in poverty, we aren't entitled to have an opinion on the government's tax policy or what they do with our money? Got it.</blockquote>


Opinions are fine. OP was venting, nay:



<img src="http://fruityoaty.com/wp-content/uploads/2007/01/biggest_whiner_statue_1.jpg" alt="" />



My dad just got done with his last round of chemotherapy for non-hodgekins limphoma. He ain't bitching. OP is off base. If he wants the subsidy I told him how to qualify for it.
 
[quote author="HB Bear, Too" date=1210422019]No, I never said that my family is barely making it; we're actually doing just fine. Our expenses are way below our incomes. We live not only within our means, but<em> below </em>our means and have done so my whole life. But that's not the point. And, I don't deny that there are people/families that are in financial situations orders of magnitude worse than mine. They are out there and they are many. But I don't think resolving their situation precludes all other priorities, either.



The point is our government is dolling out billions and billions of dollars to right this housing situation and stimulate the economy and damn it, I want my slice of the pie. If I was stupid enough to buy a house, I'd be getting a slice. If I made a less money, I'd be getting a slice. If I ran Bear Stearns, I'd be getting a slice. But since I was rational and don't run a hedge fund built on a house of cards, I get nothing.



The tax policy as it stands rewards the reckless, punishes the rational. And that, my friend, can lead to no good.</blockquote>


You might want to do some more reading. Not all the things you listed stem from tax policy. If you live in California or any other state with an income tax, you can thank this president and two Congress' ago for sticking it to us by allowing people to deduct either their state income tax payments <em>or</em> their sales tax payments. In places like, oh I don't know, <em>Texas</em>, where there is no income tax, that's a no brainer. So folks buying a new car in Texas can deduct their sales tax, whereas you likely would not.



Frankly, I would like to see the tax rates recalibrated by MSA or zip code. If the Feds can do it for their employees, they can do it for the taxpayers. Obviously, someone making $100K in Oklahoma City has a higher standard of living than someone making the same amount in Los Angeles, and yet for tax purposes, they are treated the same.



Of course, as No_Vas pointed out, if you want to pay less taxes under the current policy, there's a way to do that. All said, however, I have not met anyone who has ever voluntarily switched careers, gave up a job they liked, or otherwise took some career action for the purpose of lowering their tax burden. (If anyone knows of such person, I would truly love the opportunity to talk to him or her.) I am going to guess that that is because a job for many successful people is more than an economic decision. They derive pride, intellectual challenge, and psychological satisfaction from their work.



While I can appreciate the "Cheers" aspect the IHB, you might as well put your frustration to good use by grabbing a pen and whipping out a letter to each of your elected representatives. (I have been told that an old fashioned letter carries more weight than an e-mail.)
 
"Frankly, I would like to see the tax rates recalibrated by MSA or zip code. If the Feds can do it for their employees, they can do it for the taxpayers. Obviously, someone making $100K in Oklahoma City has a higher standard of living than someone making the same amount in Los Angeles, and yet for tax purposes, they are treated the same."



I agree, this is a great idea--it would harmonize tax burdens. It's also very easy to implement from a technical perspective.



"While I can appreciate the ?Cheers? aspect the IHB, you might as well put your frustration to good use by grabbing a pen and whipping out a letter to each of your elected representatives. (I have been told that an old fashioned letter carries more weight than an e-mail.)"



The emails have already gone out to Rohrabacher, Feinstein, Boxer and Bush. I am going to follow up on with calls on Monday. I'm still not sure what to do with Pelosi: she sponsored the damn bill and screwed her consitituents (read: us) in the process. Quite frankly, I'm just not sure what to make out of Speaker Pelosi at this point.
 
IMO, these tax credits and stimulus checks shouldn't be offered to people making more than 160K. I didn't get a stimulus check and would rather have had that money directed towards the elderly and those on social security. However, I'd rather have them get rid of, or adjust the damn AMT tax burden that affects more of the middle class every year.



I'm sure congress is aware of the AMT debacle, but decline to make any adjustments as they know it generates a lot of tax revenue.
 
I received this as an email and thought it was cute:



Research has led to the discovery of the heaviest element yet known to science. The new element, Governmentium (Gv), has one neuron, 25 assistant neurons, 88 deputy neurons, and 198 assistant deputy neurons, giving it an atomic mass of 312.

These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert; however, it can be detected, because it impedes every action with which it comes into contact. A minute amount of Governmentium can cause a reaction that would normally take less than a second to take from four days to four years to complete.



Governmentium has a normal half-life of 2-6 years; it does not decay, but instead undergoes a reorganization in which a portion of the assistant neurons and deputy neurons exchange places. In fact, Governmentium's mass will actually increase over time, since each reorganization will cause more morons to become neurons, forming isodopes. This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.



When catalyzed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons.
 
I'd rather see a repeal of mortgage interest deductions than an adjustment of the AMT. And bring up long term capital gains taxes to the level of ordinary income. Wouldn't that be more "fair" to everyone?
 
[quote author="green_cactus" date=1210561715]I'd rather see a repeal of mortgage interest deductions than an adjustment of the AMT. And bring up long term capital gains taxes to the level of ordinary income. Wouldn't that be more "fair" to everyone?</blockquote>


How about we lower everyone's taxes to the same low, flat rate, dispense with ALL of credits, entitlements and fire the armies of civil servants it take to administer all of this crap?
 
<blockquote>I want my slice of the pie. If I was stupid enough to buy a house, I?d be getting a slice. If I made a less money, I?d be getting a slice. If I ran Bear Stearns, I?d be getting a slice. But since I was rational and don?t run a hedge fund built on a house of cards, I get nothing.

</blockquote>


i guess i could complain how its unfair that i don't get food stamps... if i decide to completely ignore the fact i am blessed enough to not be poor and starving. listen to yourself for a sec. by your own words, in order to get a slice of this fabulous pie, you'd have to be some combination of stupid, underwater on a mortgage, have a crappier job, or work for some companies that are in very precarious states.



if you describe it that way, i'm really not sure <em>why</em> you even want to get a whiff of that stank pie.
 
[quote author="acpme" date=1210643053]<blockquote>I want my slice of the pie. If I was stupid enough to buy a house, I?d be getting a slice. If I made a less money, I?d be getting a slice. If I ran Bear Stearns, I?d be getting a slice. But since I was rational and don?t run a hedge fund built on a house of cards, I get nothing.

</blockquote>


i guess i could complain how its unfair that i don't get food stamps... if i decide to completely ignore the fact i am blessed enough to not be poor and starving. listen to yourself for a sec. by your own words, in order to get a slice of this fabulous pie, you'd have to be some combination of stupid, underwater on a mortgage, have a crappier job, or work for some companies that are in very precarious states.



if you describe it that way, i'm really not sure <em>why</em> you even want to get a whiff of that stank pie.</blockquote>


I understand exactly what you're trying to say and I appreciate your unbridled candor sincerely. I know from the post it may not seem like it, but we do count all of our blessings, including the financial ones. I know we are lucky; some would call us blessed. And, I know it doesn't sound like, but I really am grateful.



Now, and I think it goes without saying for most of us, we haven't always been so lucky. Believe me, we've had more than our fair share of deaths of family and friends, illnesses, lay offs, financial losses, downsizings, salary cuts, unemployment and so on. And, to put it bluntly, ?02-?05 completely sucked for us?we had ALL of the aforementioned happen to us, in spades, and often in a massively parallel fashion. I wouldn?t wish it on anyone.



That said, I still am grateful; I know things could be a lot worse.
 
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