When tax policy meets the Farrelly brothers

There are (at least) two kinds of rhetorical questions: the usual kind, in which the respondent at least understands the questioner’s position even if he or she disagrees with it, and the kind intended to demonstrate errors of reasoning but fly over the head of the respondent, who plows on gaily in the belief that everyone’s in agreement.

This makes little sense without examples. For the first, try this:

Runner: “I’m going to run 50 miles a day to get ready for my next marathon.”
Coach: “Isn’t that a little much?”
Runner: “Probably, but you never know your limits until you put them to the test!”

The second is well exemplified by one of the many hilarious exchanges in the film There’s Something About Mary:

Pat Healy: My real passion is my hobby.
Mary: Really, what’s that?
Pat Healy: I work with retards.
Mary: Isn’t that a little, uhm, politically incorrect?
Pat Healy: Well, heh, to hell with that… no one’s going to tell me who I can and can’t work with, right?
Mary: No, I mean…
Pat Healy: We got this one kid, Mongo… He’s got a forehead like a drive-in movie theatre, but he’s a good shit. So we don’t bust his chops too much. So, one day Mongo gets out of his cage…
Mary: They keep him in a cage?
Pat Healy: Well, it’s just an enclosure…
Mary: No, but they keep him confined?
Pat Healy: Right, yeah.
Mary: That’s bullshit!
Pat Healy: Well, that’s what I said! So, I went out and I got him, uh, I got him a leash.
Mary: A leash?
Pat Healy: Yeah, one of those ones you can hook on the clothesline, and he can run back and forth and, uh, there’s plenty of room for him to dig and play. That kid is really, uh, he’s really blossomed.

Here’s an exchange currently underway on a Facebook wall. It was triggered by a link to a column by Paul Krugman, the point of which is affirmed in the extreme by my interlocutor.

Small Business Owner: Hmmm, work hard, so you can pay more than your share in taxes, so the guy that pays NO taxes can get a huge refund…
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Kevin Beck: Do people who pay no federal income taxes really get tax refunds?
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Third Partier: SBO, for an extra 3-4%? And of course this is after the big tax cuts. He actually addresses exactly what you’re saying in the article. That is, it’s not about paying more than their fair share, it’s about paying their fair share.
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Kevin Beck: I can see why people balk at tax increases, but the expiration of a tax cut is different in principle even if the effect is the same. It’s kind of like a supermarket having a month-long sale on hamburger, and then when it the price goes back up to $2.99 a pound from $2.49, complaining that the bastards have jacked up the cost.
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TP: I don’t think anyone is arguing that people who work hard should pay more.
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SBO: Kevin – YES! I see it regularly in my business. People pay ZERO in income taxes and get between $1000 – $8000 in REFUNDS! TP – I work my BUTT off – 80 hours for the last 3 weeks alone – and pay WAY MORE than my “share” of taxes. I didn’t find the article. [KB: I don’t know how it’s possible to not “find” an article at the other end of a link.] But, I know that 3-4% might sound small to most but it is HUGE to those who KICK to work as opposed to those that do NOTHING and get a “REFUND”. The govenment needs a FLAT TAX – 10% to everyone! That way if you make $30k you pay $3k and if you make $3M you pay $300k – That is FAIR!
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Kevin Beck: I’m just trying to figure out how anyone who doesn’t have income tax withheld from his paycheck can wind up getting a refund, especially of that magnitude. The only way I can envision this happening is through child tax credits or something. How can they call something a refund if it’s not simply a return of an amount equal to or less than the amount originally withheld?
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SBO: Kevin – EXACTLY – how can they do that? It’s called SOCIALISM. We tax the workers into oblivion so we can give the “poor” money in the form of a “tax refund”. Ever heard of “Earned Income Credit” or “Family deductions”? Here’s my take – you want more money GO TO WORK and STOP relying on the Government to “make it right”. TP – I think you should look at how hard the “rich” work before you say that. I’m not saying I’m rich – but if I work hard and have to pay 40% or more (which I do because I am also an employer) in taxes so that someone else can get a refund because they have 4-10 kids they can’t afford…

Don’t get me started. [KB: No, no, wouldn’t think of it.]
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Random Interloper: SBO, I’m a small business owner also, and I am astounded at how much my taxes will go up next year. I always love… how in Boulder, that if I buy a piece of equipment for my office and pay sales tax that every year I have to pay property tax on that piece of equipment until it is out of my office. That is just one tax, add in all the other employee taxes and it’s ridiculous.
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Kevin Beck: That was actually a statement recast as a rhetorical question. People who don’t work cannot receive income tax refunds, period. The IRS is not a branch of Health & Human Services.

As far as people with 4 to 10 kids, how many of them do you.think not only work just enough to qualify for the EIC, but also bother with filing taxes in the first place? And while I also don’t think that people should get deductions for every child, I’d be very surprised to see the number of people or families in the U.S. with four or more kids who wind up in the black to the tune of $1,000 to $8,000 courtesy of the IRS, because that sounds a little like a straw man.

Anyway, I agree with you about socialist policies and that’s why like you I will never use Medicare or cash a Social Security check, as these are the epitome of wealth redistribution. And like you I displace my frustration with having to pay taxes as a small-business owner from the government and huge wealthy corporations that consistently under-contribute onto the legion of lazy, over-breeding toothless families sitting around getting rich thanks to fat refunds, where it belongs. What I don’t get is why those people mistrust people with money so much, because it’s not like anyone portrays them in a caricatured manner.

I honestly could not have come up with a better example of someone hitting all of the hysterical high points had I written that myself. The guys who used to write the “Letters from the Editors” for National Lampoon would be proud.

  1. #1 by Mick on February 15, 2011 - 1:23 pm

    kemibe:

    At the risk of adding more senseless blather to a discussion that clearly doesn’t need any more, I will answer this question of yours:

    “How can they call something a refund if it’s not simply a return of an amount equal to or less than the amount originally withheld?”

    Although when I hear the word “refund” my first thought is “give the money back”, Webster’s does allow for wider usage. For example, included in the low-quality dictionary I keep next to my computer is “to fund anew”, like a business was funded before, then they spent all the money, so now we have to refund it to keep it going. I think the source of the idea of someone getting a “tax refund” in an amount greater than the amount they paid likely comes from the IRS documents on the topic. The IRS repeatedly states the Earned Income Tax Credit is a “refundable credit”. I believe this is to differentiate it from other credits that cannot be collected in the current period, and instead must be carried forward to subsequent periods when a taxpayer has applicable liabilities that can be offset by the credit. I’d be the first to admit that the usage is sloppy, but it does make some sense. Also, if a partial refund, like giving half the money back, qualifies as a refund, I don’t see a logical reason why giving back 150% of the monies paid could not also be a refund.

    All I ever needed to know about the EITC can be found in the Instructions for form 1040, available for free at http://www.irs.gov but to give an example of the maximum payout: A married couple with 3 children earn $12,500 in 2010, they have no investment income and no qualifying interest payments, and no qualifying deductions, so they use form 1040 EZ, giving them a standard deduction of $18,700, which is larger than their adjusted gross, so their taxable income is zero. Their EITC is $5,666, and is REFUNDABLE, so their return is $5,666 plus all federal income taxes that were withheld during the year from their $12,500 of earned income.

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