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CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Old 12-08-10, 11:02 PM
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CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

I favor cutting taxes for everyone.

I don't like Obama's plan to raise taxes on the poor.


http://www.cbsnews.com/8301-503544_1...87-503544.html

Obama Tax Cut Plan would Increase Taxes for the Poor

December 8, 2010

Most Americans would benefit from President Obama's tentative deal with Republicans for extending the Bush tax cuts, and economists largely agree it would help stimulate the economy. Yet the plan would actually slightly increase taxes for the poorest Americans, economists say -- at a time when some leaders in Washington are trying to bring attention to the nation's widening income disparity.

The level of income disparity in the U.S. "is really an unacknowledged crisis in our country," Rep. Jan Schakowsky (D-Ill.) told Hotsheet.

Schakowsky and other House Democrats met with Vice President Joe Biden Wednesday afternoon to talk about the tax cut deal. Several members of Congress have voiced concerns - both in that meeting and publicly - that the deal gives too much to the wealthy. Not only has the president said he would accept a two-year extension of the Bush tax cuts for the highest-earning Americans, but he has also accepted an estate tax level that will keep most estates from having to pay anything.

"I don't think it's an exaggeration or hyperbole to say this gush of income to the very top wage earners and the shrinking of the middle class is a crisis," Schakowsky said.

Mr. Obama's plan, which includes several components, is focused largely on sustaining the status quo -- keeping income tax rates the same by extending the Bush tax cuts for all, for example. There are a couple elements of the plan, however, that could make a significant difference to Americans in terms of what they pay in taxes.

Firstly, the "Make Work Pay" credit enacted under Mr. Obama's stimulus plan would be allowed to expire, and a one-year payroll tax cut would be enacted in its place. The payroll tax, which is technically separate from income tax, funds Social Security and Medicare.

The nonpartisan Tax Policy Center today published a chart comparing the impact of the "Make Work Pay" credit (which gave up to $400 per year to individuals and up to $800 for couples) to the payroll tax cut plan (which would reduce the tax by two percent). It shows that the payroll tax cut will, on average, put more money into the hands of more Americans. The more an individual makes, the larger their tax relief will be; thus, the White House has emphasized middle-income families will take home more than they would with "Make Work Pay."

Those on the bottom rung of the income ladder, however, are at a disadvantage. Individuals making under $20,000 per year or households making under $40,000 would receive more money from the "Make Work Pay" credit, since the two percent payroll tax cut would amount to less than $400 or $800.

The difference amounts to just a couple hundred dollars per year -- a few dollars per week. But Schakowsky said it would have a serious impact.

"A few dollars a week can mean your bus fare getting to work," she said. "A few dollars a week adds up at the end of the month toward the rent."

Roberton Williams, an analyst at the Tax Policy Center, agreed.

"If you're making only making $10,000 a year, you're only getting $200 a week -- and $4 out of $200 is serious money," he said. "It is a big deal if it's the difference between having lunch one day or not having lunch that day, or putting breakfast on the table for the kids."

Williams said there's clear evidence that putting cash back into the hands of low-income Americans has a stimulative impact. For instance, he said, there is a huge uptick in food purchases at Walmart on the first day of every month -- when food stamp accounts are replenished.

"At Midnight the last day of the month, people line up at Walmart and they go through the cash registers buying food," he said, "so they can put breakfast on the table for the kids." That kind of behavior, Williams said, shows that if you give a low-income earner a dollar, "it's going to be spent, and they'll probably spend it before they even get it."

While the "Make Work Pay" may be a more efficient form of stimulus, Williams said the payroll tax cut plan would have a larger overall impact on the economy, simply because it invests twice as much money.

Still, Williams noted that Mr. Obama campaigned on the platform of revising the tax code to address income disparity. "This turns that on its head," he said.

Democrats concerned about income disparity have also protested the way the estate tax is fashioned in Mr. Obama's plan. Currently, there is no estate tax, but in 2009, House Democrats passed a bill to set the tax at 45 percent on estate transactions of more than $3.5 million. Mr. Obama's plan would set the tax at 35 percent on estate transactions of more than $5 million for the next two years. Williams said the plan is "so generous" it will only affect one in every 800 estates.

Schakowsky called the estate tax "the most offensive part" of Mr. Obama's plan.

"There's absolutely zero rationale for a handful of Americans benefiting as they do from this giveaway to the filthy rich," she said.

Several other House Democrats, including House Speaker Nancy Pelosi, have decried the estate tax plan.

Schakowsky said there is a lot of opposition to the plan among House Democrats. Rep. Jim Moran (D-Va.) described today's caucus meeting with Biden as "contentious" and said the vice president did not signal any willingness or opportunity to change the deal, CBS News Senior Political Producer Jill Jackson reports.

Rep. Gerry Connolly (D-Va.) said after the meeting that he believes there will be a number of Democrats who vote against the package, Jackson reports. However, he said he thinks "there are a lot of people prepared to support this package. Perhaps holding their nose or someone else's nose."
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Old 12-09-10, 12:04 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Democrats concerned about income disparity have also protested the way the estate tax is fashioned in Mr. Obama's plan. Currently, there is no estate tax, but in 2009, House Democrats passed a bill to set the tax at 45 percent on estate transactions of more than $3.5 million. Mr. Obama's plan would set the tax at 35 percent on estate transactions of more than $5 million for the next two years. Williams said the plan is "so generous" it will only affect one in every 800 estates.

Schakowsky called the estate tax "the most offensive part" of Mr. Obama's plan.

"There's absolutely zero rationale for a handful of Americans benefiting as they do from this giveaway to the filthy rich," she said.
And here we have the liberal mindset perfectly presented. The government not taking part of your estate is considered a "giveaway" to the estate because the liberal mindset sees all money and possessions as rightfully owned by the state and they are best suited to determine how much of the state's possessions that you created for them, you are allowed to keep. Only a liberal mindset could see that an individual's wealth not being taken away is a giveaway to that person.
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Old 12-09-10, 12:05 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

I predict people will complain about another Grundle thread, while posting over and over in one yet again.
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Old 12-09-10, 12:10 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by kvrdave View Post
And here we have the liberal mindset perfectly presented. The government not taking part of your estate is considered a "giveaway" to the estate because the liberal mindset sees all money and possessions as rightfully owned by the state and they are best suited to determine how much of the state's possessions that you created for them, you are allowed to keep. Only a liberal mindset could see that an individual's wealth not being taken away is a giveaway to that person.
And here we have doublethink.

You consistently say the rich pay no taxes. They connive, corrupt, and bribe their way out of it so they don't in fact.

Yet when an effort comes along to try and get the billionaires to pay a similar tax rate paid to the rate of someone trying to get by on $30,000 a year, your opinions on the wealthy and taxes seemingly disappear into ideology.

What am I missing? Letting the rich openly cheat on taxes is a 'giveaway' of sorts.
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Old 12-09-10, 12:23 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

I say make the accountants for these rich guys do some pro bono work so us poor slobs can also cheat on our taxes.

Or maybe I'll just have Lemmy fill out my tax forms this year.
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Old 12-09-10, 12:24 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Dr Mabuse View Post
And here we have doublethink.

You consistently say the rich pay no taxes. They connive, corrupt, and bribe their way out of it so they don't in fact.

Yet when an effort comes along to try and get the billionaires to pay a similar tax rate paid to the rate of someone trying to get by on $30,000 a year, your opinions on the wealthy and taxes seemingly disappear into ideology.

What am I missing? Letting the rich openly cheat on taxes is a 'giveaway' of sorts.
Wasn't krdave specifically referring to estate taxes though? I agree with you on the point of closing any loopholes that the rich may use to escape paying taxes, but I don't think the death tax is the place to collect. I don't understand why the government should take any portion of an inheritance.

It's another example of our tax code being too complicated. All of these special loopholes, stimulating certain sectors or businesses in the economy should be eliminated.
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Old 12-09-10, 01:32 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by msdmoney View Post
Wasn't krdave specifically referring to estate taxes though? I agree with you on the point of closing any loopholes that the rich may use to escape paying taxes, but I don't think the death tax is the place to collect. I don't understand why the government should take any portion of an inheritance.
I'm no fan of taxes that go to a corrupt federal bureaucracy that uses the money to increase corruption and get re-elected. So that's a sort of 10,000 foot view of where I'm coming from. I'm not a 'tax them more so we can increase spending' type. But, the reason that corrupt stuff can happen is the fault of the American people not taking an active role in their participatory government. As Jefferson said:

"We in America do not have government by the majority. We have government by the majority who participate." - Thomas Jefferson

Today 'participating' has become such an apathetic, lazy affair that going to the polls once every 2 or 4 years makes a person seem like they are 'participating' compared to many/most others. But that's another topic.

I do, however, feel that with the miraculous 'interest carryover' and many other ridiculous things(the Finance Committee has more bribery and lobbying going on than any other)the wealthy have accomplished to avoid taxes when they make even $600,000,000 in a year, a pragmatic approach to this is the estate tax so that a percentage can be paid, rightfully so, to the nation in taxes on all that wealth that was accumulated with such a low tax rate when it is passed on.(my run-on detector is flashing but I'm going with it) The rich have been trying to kill that estate tax with propaganda since the 1980's when the 'death tax' moniker came into being, convincing people that will never be blessed enough to have it affect them that it their own personal Sword of Damocles. I notice you use that term yourself, there's more to that than a simple choice of words. I would suggest the more accurate moniker of 'we finally got a fair tax rate, consistent with the working class, out of you filthy rich slippery bastards tax' myself.

Originally Posted by msdmoney View Post
It's another example of our tax code being too complicated. All of these special loopholes, stimulating certain sectors or businesses in the economy should be eliminated.
I agree. But since the finance Committee is bought and paid for, and the citizens prefer anything else(fishing, sports, etc) to getting involved and forcing changes in their government, don't hold your breath.
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Old 12-09-10, 02:03 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Dr Mabuse View Post
And here we have doublethink.

You consistently say the rich pay no taxes. They connive, corrupt, and bribe their way out of it so they don't in fact.

Yet when an effort comes along to try and get the billionaires to pay a similar tax rate paid to the rate of someone trying to get by on $30,000 a year, your opinions on the wealthy and taxes seemingly disappear into ideology.

What am I missing? Letting the rich openly cheat on taxes is a 'giveaway' of sorts.
We can try to interpret what she really means by giveaway, or we can assume that she meant it just like she said it. As it reads, she sees not taking from people as a giveaway.

Here's a question for you. Do you think that if there had been an estate tax when Steinbrenner died that the estate would have paid roughly $350,000,000 of the approximate $1 billion that his estate was worth? It was probably worth more, but whatever. Do you think that would have actually happened?

There is a reason that many family farms are no longer counted as family farms but as corporate farms. It is because of the estate tax and family farms creating corporations where the family owns a low percentage of the stock, but a controlling share since it isn't traded publicly and they simply leave their kids their shares, which won't hit the threashold. And the corporation never dies.

My complaint has to do with the unfairness of how such a tax is actually done in practice. I'd be much more in favor of a wealth tax that included corporations, trusts, and trusts that are not located in the US but that US citizens (especially Senators) derive income from. I'm not for window dressing that doesn't really do what the masses think it does.
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Old 12-09-10, 02:08 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Dr Mabuse View Post
And here we have doublethink.

You consistently say the rich pay no taxes. They connive, corrupt, and bribe their way out of it so they don't in fact.

Yet when an effort comes along to try and get the billionaires to pay a similar tax rate paid to the rate of someone trying to get by on $30,000 a year, your opinions on the wealthy and taxes seemingly disappear into ideology.

What am I missing? Letting the rich openly cheat on taxes is a 'giveaway' of sorts.
I didn't really respond to your point. I do think the very rich don't pay much. I'm not talking about people making a few million a year, but much more. I don't have faith that this is an effort that will do anything, so rather than focus on that, I focused on the mindset of the gal who thinks that the state not getting their cut is a giveaway. This does nothing to get the truly rich to pay taxes on their estate. Maybe you disagree. Maybe you think that John Kerry's estate (assuming his wife dies first and leaves it to him) will pay several hundred million in estate taxes as a direct result of this law. I find that to be naive.
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Old 12-09-10, 03:16 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Oh stop with the 'maybe you think' stuff, I implied nothing of the sort, and that is a trite and tired debating tactic.

'Maybe you think'...

The inheritors of the Steinbrenner estate would have a paid a large sum of money in taxes, I do believe that. I'm sure they would have found clever ways to beat the 45% rate, but there would have been considerable tax revenue. I was reading an article(forget where) about this stuff not too long ago, and an executive at a major accounting house said 'this is a good year to die if you're super rich', since the estate tax is off for this year. So let's just say that it would have been a large sum of money, yes, probably quite a bit more than a hundred million.
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Old 12-09-10, 08:44 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Simple yes or no question for Obama supporters: Why do you hate the poor?
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Old 12-09-10, 08:51 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Is he raising taxes on the poor or for the poor?
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Old 12-09-10, 09:03 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

He's not raising taxes on anyone. In case anyone really cares, the deal allows for one of the tax "cuts" in the stimulus to expire. If I understand correctly, it wasn't even a tax cut, it was a check so to some it was a credit - a handout.

So what I hear is grundle wants the government to give more handouts to the poor. Is that right?
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Old 12-09-10, 09:03 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by kvrdave View Post
And here we have the liberal mindset perfectly presented. The government not taking part of your estate is considered a "giveaway" to the estate because the liberal mindset sees all money and possessions as rightfully owned by the state and they are best suited to determine how much of the state's possessions that you created for them, you are allowed to keep. Only a liberal mindset could see that an individual's wealth not being taken away is a giveaway to that person.
From the article:
"There's absolutely zero rationale for a handful of Americans benefiting as they do from this giveaway to the filthy rich," she said.

What is odd is that the Loophole Party talks taxes, but actually passes loopholes (that you need VERY expensive lawyers to mine) which lets the very wealthy avoid these same taxes.

I think that is why the VERY wealthy are mostly Democrats (to keep the slightly wealthy in their place). However, if you want them to donate to your political campaign, it is probably bad form to call the "filthy rich."
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Old 12-09-10, 09:06 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by starman9000 View Post
Is he raising taxes on the poor or for the poor?
As I understand it, the plan is to raise taxes on the slightly poor in order to give handouts to the filthy poor.
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Old 12-09-10, 09:09 AM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Dr Mabuse View Post
And here we have doublethink.

You consistently say the rich pay no taxes. They connive, corrupt, and bribe their way out of it so they don't in fact.

Yet when an effort comes along to try and get the billionaires to pay a similar tax rate paid to the rate of someone trying to get by on $30,000 a year, your opinions on the wealthy and taxes seemingly disappear into ideology.

What am I missing? Letting the rich openly cheat on taxes is a 'giveaway' of sorts.
There is a much easier way to make the rich pay more taxes and it isn't an estate tax. You are a smart person, I am sure you know what it is
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Old 12-09-10, 02:40 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Dr Mabuse View Post
that is a trite and tired debating tactic.
Originally Posted by Dr Mabuse View Post
I was reading an article(forget where) about this stuff not too long ago,
Originally Posted by Dr Mabuse View Post
that is a trite and tired debating tactic.
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Old 12-09-10, 02:41 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Groucho View Post
Simple yes or no question for Obama supporters: Why do you hate the poor?
Yes!
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Old 12-09-10, 03:29 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Originally Posted by Jack Nuckolls, an attorney and estate planner with the accounting firm BDO Seidman
"If you're super-wealthy, it's a good year to die,"
Originally Posted by Asher Rubinstein, Forbes magazine
Should you die in 2010? Clearly a morbid, and of course facetious, question, but contemplating and preparing for one’s demise could definitely assist one’s survivors afterwards. While it was a long-standing joke among tax and estate planners that 2010 would be a good year to die because there is no estate tax imposed in that year, in practice, this is less than certain. It is still entirely possible that Congress could implement an estate tax retroactive to January 1, 2010. So, for example, the children of George Steinbrenner, who died in 2010, may not actually escape the estate tax bite after all. If the estates of people who passed in 2010 are suddenly made to pay a retroactive estate tax, then we can surely expect court challenges. The bottom line is that prudent estate and tax planning is necessary now, because of the uncertainty of the estate tax.
Originally Posted by DAVE CARPENTER and STEPHEN OHLEMACHER
Associated Press
updated 7/13/2010 6:36:15 PM ET 2010-07-13T22:36:15

Born on the Fourth of July, George Steinbrenner left the world stage with a great sense of timing too.

By dying in 2010, the billionaire and long-time New York Yankees owner's wealth avoids the federal estate tax, likely saving his heirs enough money to field an entire team of Alex Rodriguezes.

Steinbrenner's death Tuesday came during an unplanned year-long gap in the estate tax, the first since it was enacted in 1916. Political wrangling has stalemated efforts in Congress to replace the tax that expired in 2009.

That deprives the government of billions of dollars in annual revenue but represents an unexpected bonanza for those who inherit wealth.

"If you're super-wealthy, it's a good year to die," said Jack Nuckolls, an attorney and estate planner with the accounting firm BDO Seidman. "It really is."

The death of the 80-year-old Steinbrenner, who had been in poor health for years, highlights a quirky tax situation that has drawn much scrutiny among the moneyed but little on Main Street. Only those with estates valued at more than $3.5 million had to pay under the old law.

Without knowing the exact details of Steinbrenner's holdings and estate plan, it's impossible to say how much money will be saved. But estate planners and tax experts say it's likely that the estate benefited hugely by the timing of his death.

A glance at some numbers suggests roughly how it may work.

Forbes magazine has estimated Steinbrenner's estate at $1.1 billion. The federal estate tax in 2009 was 45 percent, with the $3.5 million per-person exemption. If he had died last year, his estate could thus have faced federal taxes of almost $500 million, depending on how the estate was structured.
So I'm the naive one?
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Old 12-09-10, 03:33 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

You showed me.
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Old 12-09-10, 04:23 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"



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Old 12-09-10, 04:32 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

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Old 12-09-10, 05:31 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

So when are the teabaggers going to start holding rallies demanding that Make Work Pay should be made permanent? After all, if we need tax relief for every American, shouldn't this program continue?

I won't be holding my breath.
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Old 12-09-10, 05:46 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

Have there been any tea party rallies about tax relief? I sure haven't heard of any.
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Old 12-09-10, 06:32 PM
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Re: CBS News "Obama Tax Cut Plan would Increase Taxes for the Poor"

There haven't been, which just shows how hypocritical they are, I say.
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