PAYASUGO, CONGRESSIONAL BONUSES & TAX CREDITS

Remember the line, "Ask not what your government can do for you, rather what you can do for your government?" ... well, I don't either ... in fact if you're old enough you mistakenly thought J.F.K. said that ... well he did say something similar. Now Washington is proffering the following empty promise to get its Government Motors [GM] off to a rabbit start to profitability ... it goes like this:

When you get paid, you pay taxes every time. These are called payroll taxes. Those payroll taxes have 2 components: federal income tax and federal insurance contribution act tax (FICA).

Now when you file your return, the total amount of taxes that you pay will depend on your salary and the "tax credits" and "tax discounts" you can get.

So when you make $18,000 per year, there is a certain amount that you are due to pay. However, you can get a tax credit if you have kids, if you are the head of a household, buy a government motors Chevy Volt [$7,500 tax credit], etc, etc. So if your tax credits equal the tax you have to pay, then in the end you won't pay any taxes. There are times where the amounts of (refundable) credits is higher than the taxes due, so you might end up not only not paying taxes, but receiving some money from the government.

Now, the FICA everyone pays and people don't get credit for it. Obama's plan is to generate a tax credit system that will cut the FICA taxes for everyone. But no one will receive a "check" for their FICA taxes. They will just pay less. 

When the April 15th deadline for federal tax returns is on the horizon, Americans are sharply aware of their federal income tax liabilities. However, one aspect of federal income taxes they may not be aware of is the growing number of Americans who pay zero federal income tax after taking advantage of deductions and credits.

During 2006, Tax Foundation economists estimate that roughly 43.4 million tax returns, representing 91 million individuals, will face a zero or negative tax liability. That's out of a total of 136 million federal tax returns that will be filed. Adding to this figure the 15 million households and individuals who file no tax return at all, roughly 121 million Americans—or 41 percent of the U.S. population—will be completely outside the federal income tax system in 2006.¹ This total includes those who pay no tax, and those who pay some tax upfront and are later refunded the full amount of the tax paid or more. 

Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7,500 tax credit for purchasers of the electric Chevrolet Volt, supposedly Government Motor's salvation. So, Government Motors is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of America's families.

Now, there are and estimated 78 million Baby Boomers, ... and 14% unemployed are being supported by the remainder ... now that's the problem ... who are these people?  Well, I'm no more certain about the 12 - 20 million illegal aliens either.  But one thing I'm certain about is there has been a change in Santa Claus ethnicity ... 

Pay as you go [Yugo was a car] and congressional bonuses will be addressed in a future blog.  Perhaps a congressional bonuses system might work!  I'm going to ask the TOTUS ... 'the presidential teleprompter'.