I thought I'd revisit Mr. Sandoval's essay on how George Bush has cut taxes for ... all the middle class.
His hypothetical example, a married couple making $40,000 before taxes, with two children under age 17, who lived at home with mom and dad, would have gotten a 96% tax cut from George Bush.
That's very hypothetical and I sincerely doubt Mr. Sandoval knows all the assumptions.
I did the math using a 1040 and my personal situation. I still would have paid several hundred dollars in income taxes if I had two 17 year kids. Not at all close to the $46 claimed by Sandoval.
To be very honest, I could redo all the numbers so that the mythical married couple get no additional benefit from the Child Tax Credit.
But, I would have to assume several things.
(1.) Two wage earners making $10 an hour.
That's very possible in this economy.
So two people working a combined 4,000 hours a year.
(2.) Two children in daycare.
That seems very reasonable as well. My son has two children in daycare. And, he pays dearly every week for that service. But, he gets a nice tax credit for his daycare expenses. In the Gainesville area, daycare costs around $140 per child. In my example, I use $155 per week for 2 children or about half the going rate in Gainesville, Georgia.
Tax credit for my hypothetical couple? $2,450!!!!!!!
Now what are those boring numbers?
Real Income .............................$40,000
Minus the standard deduction (not itemizing) ............................-$10,700
New balance for taxable income ............................ $29,300
Minus the exemptions for dependents and self ........................... -$13,600
New balance for taxable income ........................... $15,700
The tax liability for income of $15,700, married filing jointly? $1,576
Credit for childcare expenses? $2,450.
Net tax liability? ZERO!!!!!!!!!!!
How much did the family of four get from the George Bush tax cuts?
ZERO!
Now, we should ask one more question.
How much would a family of four with earnings of $100,000 get from the Child Tax Credit?
$2,000.
So in reality, Sandoval is very, very wrong.
A family making $40,000 gets no benefit from the changes in the Child Tax Credit but a family making $100,000 gets $2,000!
Yes, the Bush Tax Cuts go to the richest members of society.
Mr. Sandoval should be ashamed.
Wednesday, April 2, 2008
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1 comments:
Before the Child Tax Credit becomes a valuable credit, the couple must earn about $46,000 or more.
In my real word case of two children in daycare and NO OTHER DEDUCTIONS.
Other than the standard deductions for someone without an itemized return and the $3,400 per person dependent credit.
And, I remind everyone,
67% of American taxpayers have income of less than $21,000.
So, we can assume that very few people in my middle class (the 67 percent club) get any benefit from Mr. Sandoval's beloved tax cuts.
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