Everyone Has This Tax Argument Wrong

Obama And Republicans Agree On Tax Cut Extension
by NPR STAFF AND WIRES

December 6, 2010
President Barack Obama lost a game of chicken over tax cut extensions, and had to compromise when Republicans called his bluff.

Bernie Sanders is doing the right thing and threatening to filibuster this bill.

But Martin Frost, a former member of the Democratic congressional leadership, says Obama's position is the best the Democrats can do.

"The worst thing that can happen for Democrats right now would be to block anyone from getting a tax cut because we're mad about the wealthy getting tax cuts, and then have the economy continue to deteriorate — then we'd be in real trouble," Frost said.

But that raises an obvious question: Why wouldn't the Republicans be blamed for holding the middle class cuts hostage to a tax cut for the rich?

"You're asking me why the Democratic Party isn't very good at messaging right now? I don't have an answer for that," Frost said.

"The facts of the matter are the Republicans have run circles around us on messaging recently. The best the president can do is say, 'We did no harm; we did not make the economy worse,' " he said.

For months, I have been telling anybody who would listen that, come early 2011 and barring a sharp upturn in the economy, there would be a second stimulus package. Don’t listen to all the rhetoric from Republicans (and Democrats) about deficit reduction, I recall jabbering on a recent New Yorker podcast, if unemployment is still close to ten per cent at the end of the year, the President and the Congress will act.

Well, I got the timing wrong. The stimulus package arrived last night rather than in February or March 2011, and it was disguised as a deal to extend the Bush tax cuts. As part of the agreement, Republicans have apparently agreed to cut the employee portion of the payroll taxes and to extend some existing tax-relief measures aimed at poor people and businesses. As of this writing, it is hard to say how much these tax cuts will be worth, but it could well be about $150 billion a year, which is roughly one per cent of G.D.P.: not enormous, but not chump change either.

[...]

But from an immediate macroeconomic perspective, and, hence, from the perspective of a President preparing for a reëlection campaign in 2012, the tax-cutting agreement makes some sense. By boosting the overall level of spending power, it will reduce the chances of the economy falling back into recession sometime next year or in 2012. That is very good news for President Obama. Jimmy Carter, George Bush Sr., and George Bush Jr. all discovered to their cost that there is nothing as threatening to an incumbent President as an economic slump in the year or two before polling day.

Instead of deciding who gets a continued tax break... just let the damn things expire for EVERYONE. If you are single and make the very top of the 25% bracket... your taxes will rise 2500.00. If you are a married couple at the top of the 25% bracket yout taxes will rise 4185.00.

Do you stop for coffee every day 5 days a week while working?
783.00

Do you smoke? cut out 1 pack a week
260.00

do you go out, especially if you're single and spend 20.00 a week on beverages? (a pittance)
1000.00

do you go out to eat one night a week and spend a pittance of 12.00?

624.00

do you eat luch out at work and spend a lousy 4.00 a meal (Less than Mcdonalds money)
1040.00

That right there is 3083.00 a year which means if you're single you've paid for the 3% with just under 600.00 to spare .

If you're married and filing on 139, 500.00 a year in income you'll have to find a way to save an additional 1000.00 a year. Boo Hoo.

I just had one of the worst financial years I've had in 20, but I'm only too willing to see a stinking 3% rise in my taxes to get the country in better shape for my great grandchildren.

EVERYONE needs to cut the damn whining and step up. We're not the country we were when the boomers were growing up and we probably never will be. Adjust.

http://www.springfieldnewssun.com/news/nation-world-news/will-you-pay-more-when-bush-tax-cuts-expire--646402.html?bigName=&bigPhotog=&bigCap=How+the+expiration+of+President+Bush's+tax+cuts+might+affect+you+in+2011&bigDeclCap=&bigCred=&bigUrl=http%3a%2f%2fwww.ohio-share.coxnewsweb.com%2fmultimedia%2fdynamic%2f00668%2fddn041110taxesgd_668287c.jpg&superSizeImage=y

John Cassidy wrote:

For months, I have been telling anybody who would listen that, come early 2011 and barring a sharp upturn in the economy, there would be a second stimulus package. Don’t listen to all the rhetoric from Republicans (and Democrats) about deficit reduction, I recall jabbering on a recent New Yorker podcast, if unemployment is still close to ten per cent at the end of the year, the President and the Congress will act.

Well, I got the timing wrong. The stimulus package arrived last night rather than in February or March 2011, and it was disguised as a deal to extend the Bush tax cuts. As part of the agreement, Republicans have apparently agreed to cut the employee portion of the payroll taxes and to extend some existing tax-relief measures aimed at poor people and businesses. As of this writing, it is hard to say how much these tax cuts will be worth, but it could well be about $150 billion a year, which is roughly one per cent of G.D.P.: not enormous, but not chump change either.

[...]

But from an immediate macroeconomic perspective, and, hence, from the perspective of a President preparing for a reëlection campaign in 2012, the tax-cutting agreement makes some sense. By boosting the overall level of spending power, it will reduce the chances of the economy falling back into recession sometime next year or in 2012. That is very good news for President Obama. Jimmy Carter, George Bush Sr., and George Bush Jr. all discovered to their cost that there is nothing as threatening to an incumbent President as an economic slump in the year or two before polling day.

http://www.newyorker.com/online/blogs/johncassidy/2010/12/tax-deal-is-stimulus-20.html#ixzz17RY1zN00

The Tax Deal

I’ve been on a bunch of planes, but catching up on my blog and email reading the progressive wonk consensus seems to be that the tax cut deal is . . . not as bad as people feared it would be based on what was happening the previous week. And I totally agree, though that’s largely a case of expectations management so I’m not going to break out the flowers.

What I will say, though, is that this has partially set my mind at ease about the prospects of a GOP strategy of economic sabotage. The tax policy the right wants, though in general bad for the country, is not bad for short-term economic performance. And the concessions they were willing to give Obama in exchange for boosting the incomes of rich people are expansionary in the short-term. So the terrain here exists well within the range of “normal” politics where conservatives want lower taxes on rich people. This is kind of nutty in my view, but it’s a deeply held article of faith on the right and not some ad hoc effort to sink the economy or anything.

In a non-optimistic vein, though, this is really kind of sad statement on where Washington is at the moment. What you can say in favor of this deal is that it is a kind of expansionary fiscal policy. But if expansionary fiscal policy is the order of the day, then this is a mighty ineffective way to go about. And if the reason we can’t have a real robust jobs program is that deficits are evil, then why on earth is it that we need huge deficit-expanding tax cuts for the children of the hyper-wealthy?

edit: "It" is pretty general here. "It" is never going to be all that the most lefty voters want, nor all that the most righty voters fear. He is was and always will be a moderate.

Tax agreement is new Wall Street bailout
by Mark Sumner
Tue Dec 07, 2010 at 08:49:42 AM PST

Just a quick refresher.

1. This is just what the Republicans planned.

The tax increases about to slide into effect are Republican increases written into law by Republican legislators. Those legislators thought it would be cute to pretend that they weren't screwing the budget by planting a bomb in the legislation. Now that bomb is going off. And they want to blame everyone else -- as usual.

2. The Democratic House bill offered a tax cut for every tax payer.

The bill is not a "middle class tax cut." The bill that has passed the House would not just give a cut to 95% of the populace -- no matter how many times the media says it, or how badly political leaders phrase it. The bill would provide a cut (a new cut, offsetting the Republican-engineered increase) to every taxpayer, regardless of income.

3. Republicans are holding the bill hostage for bonus bucks for billionaires.

What Republicans are arguing, and what President Obama has now agreed to, is that the wealthy need more cuts than everyone else. It's not that they were being left out. It's that this check wasn't big enough for the big money gang.

This is not a done deal. It should not be a done deal. If no deal is reached, it will be a universal Republican tax increase, written and orchestrated by the GOP. I refer you to the roll call vote in 2001. Mitch McConnell voted to raise taxes in 2010. So did Inhofe and Sessions and dozens of others now outraged that they are getting exactly what they voted for. Republicans should be begging to climb on board a tax cut for every American, not being handed fat checks from the Joe the Plumber Victory Fund.

Back when this legislation was passed at a time of budget surplus, Republicans predicted that (despite CBO contradiction) the tax cuts would -- here's a word the GOP now says with a sneer -- stimulate the economy, and that revenues would actually grow so much that the cuts would pay for themselves. They passed "pro-growth" cuts in 2001. And "tax stimulus cuts" in 2002. More "growth-oriented" cuts in 2003. And "tax simplification changes" in 2005. They probably would have passed even more, but by then they'd turned the surplus into the biggest deficit in history and were well on their way to tanking the economy.

These tax cuts are the Bush economy. They're the final act of Phil Gramm before he went off to investment banking land to rake in the profits of destroying the middle class. They are a deliberate, calculated form of economic sabotage that is guaranteed to wreck any chance of reining in debt and make decimation of public services the only possible option.

Paying these bonus bucks for billionaires is not "compromise." It's not even capitulation. It's simply suicide.

but most people could implement PART at least of these SMALL examples so why throw the baby out with the bathwater?