From: pjm@anegada.sps.mot.com (Patrick J. McGuinness)
Newsgroups: talk.politics.misc
Subject: Re: ==> Rhetoric Vs. Reality--The First Debate
Date: 14 Oct 92 22:14:38 GMT
Organization: SSDT SPS, Motorola Inc., Austin TX

In article <84926@bcsaic.boeing.com> lbaum@atc.boeing.com (Larry Baum) writes:
>In article <1992Oct13.003125.16298@oakhill.sps.mot.com> pjm@anegada.sps.mot.com
>(Patrick J. McGuinness) writes:
>>
>>Clinton wants to raise the tax rate on the "top 2%" *not over $200,000*
>
>This is silly.  Tax tables are based on particular income levels; when you sit
>down and compute your tax is there any possible way to fighure out what
>percentile you are in?  If your AGI were 48000, fo example, do you really think
>you could look up in a table somewhere and find out, with any precision, what
>percentile of the population you are in.   Tax law is not written that way.  It
>is written with certain marginal rates levied against particular income
>brackets.  Clinton is consistently stating that his proposal is for a higher
>tax on those making $200,000.  Now, I don't know if he is talking gross income
>or AGI.  That makes a big difference.
>Perhaps sdomeone in the know will clarify.  And i don't know if that is for
>"married filing jointly" or "head of household" or what.

The "talking head" shows chewed on this a bit. $200,000 is gross income
on a family of 5. You get down to $64,000 by talking about
single filers (net income?). 

One of the points made on the show was that most of the claimed revenue
came from the AMT tax changes, and these would hit small business
owners/contractors disproportionately, since these types of
people have large gross income but correspondingly large expenses. 
They gave the example of an Avon lady as in this category.

But the main point, which hasn't been addressed, is that the
plan makes assumptions about how much revenue can be raised from
the planned tax increases.  These assumptions have been disputed.
Just think about the AMT stuff - either a lot of people will
be out of work, or these people will find another way of reporting
income to get around this (perhaps a little of both).

>I would be interested in knowing what percentile a $200,000 income places one
>in.  If it were, say, 1.6%, then rounding it to 2% in order to avoid sounding
>nerdish would make sense.  But I have no idea what the percentile really is.

>>(Clinton is not telling the truth on this when he says he won't
>>raise taxes on those making less than 200,000 - his own plan has
>>the following:
>>Increase rates on top 2%,      
>>         raise AMT, surtax on      
>>         millionaires              17.8     20.5     21.6     23.0
>>
>>Remember, when we cut the tax rate on the wealthy in the 1980s, their
>>share of taxes increased.  Clinton wants to reverse this virtuous
>>cycle of tax reduction and increased welath creation by increasing
>>tax rates again. When he does, the rich will hide their taxable wealth
>>back in tax shelters and marginally-productive investments, and hide
>>their slaries in perqs and benefits, and their share of taxable income
>>will fall. Along with it, revenues will fall.
>
>You are conviently ignoring the investment-encouraging aspects of his proposal.

.... yeah, $89 billion in higher taxes on businesses and investors.
Real encouraging.

> Instead of those shelters (which by and large have been eliminated from the
>tax laws) he is providing substantial tax relief for income from job-producing
>investments and long term capital gains.

Clinton has tagged along with Bush and others in wanting R&D tax credits,
etc., but his capital gains tax cut is too narrow.

>He is also getting addition revenues by taxing foreign corporations at the same
>rate as US corporations.

The Wall Street Journal looked into this a few months back. Clinton's
numbers are based on Rostenkowski's own attempt to get a hold of
foreign companies profits in taxes. It turns out this is just a cash-grab
that according to the WSJ was based on phony numbers. 
It is politically appealling to think that we can raise money from
foreigners, but foreign companies are setting up shop here in the U.S.,
and giving Americans jobs; BMW is setting up a factory in North Carolina. 
This kind of a plan is far from "investment encouraging".

>>>This exposes the problem with Clinton's tax proposal.  Clinton
>>>doesn't tell us where the rest of the money is coming from.  He
>>>tries to say that the only effect will be on people making over
>>>$200,000 -- this is manifestly false.
>>
>>Right on. As Bush said, it's the old "soak the rich" bait and switch.
>>"rich" will be redefined as $60,000. 
>
>Wrong on.  As pointed out above, he has provided for additional sources of
>income: taxes on foreign corporations.

Paid for (indirectly) by ordinary working Americans. Clinton proposes
higher taxes on American businesses too, BTW. 

And again, he claims that it will bring in $89 billion by the fourth
year. These estimates are likely to be as off the mark as the
estimates on the 1990 tax increase. And then Clinton will be
faced with the choice: more taxes on the middle class, or a 
higher deficit. (Well, maybe both.)

Pat
	Bill Clinton: The Status-Quo Candidate
Newsgroups: talk.politics.misc,alt.politics.clinton