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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (197703)	8/15/2004 12:54:23 AM
From: i-node	Read Replies (3) \| Respond to of 1586246

Ok, might be the case. And when did that change? With the reforms that Reagan made to the tax code to catch those who were escaping their fair share of taxes. Like those on unemployment. A key factor was the elimination of income averaging. Whoa! Reagan abolished the aforementioned 91% tax rate (when these rates were in effect, I had occasion to work up comparative tax returns for someone who was considering working past retirement, but needed to file separately. We determined that the taxpayer would actually LOSE MONEY to continue working, due to the hit from SSA and the income tax. Reagan corrected this absurd situation). Reagan closed the loopholes for passive activities (IRC Section 469) which allowed the wealthy to use losses from limited partnerships, in which they were NOT AT RISK, to offset other categories of income. Earlier, to get the economy moving, Reagan had spurred investment with the Accelerated Cost Recovery System for depreciating assets as well as enhanced Investment Tax Credit provisions. Yes, unemployment benefits DID become taxable in TRA'86 -- BUT ONLY if the recipient made enough money to exceed the substantially increased exemption allowance as well as a sizable standard deduction. Taxpayers at the low end benefitted tremendously from Reagan's tax cuts. It didn't feel like it to many, because the flat Social Security tax was increased to try to get SS back on track. But Reagan was certainly the most "UMF" president we had in the second half of the century. A key factor was the elimination of income averaging. Yes, because it was no longer necessary due to the flattened and lowered rate schedules. The reason income averaging existed in the first place was to smooth out the rate schedules for individuals who found himself in the lower brackets one year and the upper (50%+) brackets the next. When you get rid of the 50% rates, you don't need income averaging. Don't blame the liberals for this one... I certainly DO blame the liberals. The Internal Revenue Code of 1986 reduced rates, but also eliminated huge deductions (so-called "loopholes"). This was an agreed-upon tradeoff -- give up the deductions, reduce the rates. Read the Congressional committee reports on the Act (I have). What happened? Clinton takes office, up go the rates, but the deductions are gone. The American People are screwed, once again, by the liberals.