Saturday, September 25, 2004

Politicians Who Mean What They Say

As I was planning Monday's class, I realized that I couldn't fill all the time with the Pythagorean Theorem, and I couldn't count on my students to bring review questions. (We're having a test on Wednesday.) So to fill the rest of the time, I decided that I would take advantage of this being an election year and tell my students a little bit about how federal income taxes work and what the candidates are suggesting to "improve" them.

I was trying to cook up examples with the 2003 form 1040 and trying to illustrate some of the most frequent comments made about the Bush tax cuts. I also downloaded the forms from 1999, to compare to taxes in the Clinton administration.

But I must say: low income people really did get a substantial tax cut. And in order to make a 2003 example that illustrates the marriage penalty, I had to have my hypothetical people working in very well-paid jobs (household income of $150,000), and the penalty was only about $500. I was surprised, as I had assumed that the politicians had exaggerated the tax cuts.

(Note: I have made no comment about my opinion about the wisdom of a tax cut as fiscal policy.)

The question now is, if taxes really are as low as they've been saying they are, then why do I find myself writing large personal checks to the IRS?