Not sure if this is being discussed elsewhere, but I’m suprised it doesn’t have its own thread, as it seems to be big news in liberal circles. So the indications are that Obama may work with Republicans to temporarily extend both the middle-class tax cuts and those for the wealthy. This seems to me to be an AWFUL idea. Not only is it terrible for the budget, but it won’t get the Democrats any votes at all while ensuring that the Republicans once again get to control the issue next time it comes up. And on top of that, it keeps reminding the voters that they can thank Bush for their tax cut and not the Democrats. The Dems need to either let all the cuts expire and create legislation in the lame-duck session to enact a temporary middle-class cut (good politics but not good for the deficit) or simply let the tax cuts expire (good for the budget). Extending the tax cuts for everyone is just plain terrible for the deficit and terrible for Democrats, and I can’t believe they’re even considering it. I even wrote to my senators and representative (as well as the congressional delegation from the state I grew up in for good measure) to let them know what an awful idea it is. Edit: Err, I mean compromise...
No question about it, if President Obama and the Congressional Democrats give in without a fight on the expiring tax cuts I will be absolutely infuriated.
So would I. Imagine the horror of letting people keep a bit more of the money they earn! Grrrrr! Errr, I mean, letting them keep the same amount of money they've been able to keep. Well, Grrrrr anyway!
Everyone would like to keep more of the money they earn. But that comes with a consequence, and the consequences have already been dire enough for the country's finances. Then when you consider that the overwhelming beneficiary of these tax cuts has been a tiny percentage of the population, it ought to be enough to make anyone angry, no?
Well, except that the overwhelming beneficiaries of these tax cuts have not been a tiny percentage of the population. It's been all of us. And those who would lose if we raise taxes during a recession would not be a tiny percentage of the population. It would be all of us. Unfortunately, due to the out-of-control spending, taxes will have to be raised, to some extent. But have some patience. The economy will come back, and then it will be a better time to make the necessary adjustment. To do it in the midst of this tough economic climate is not such a great idea as you seem to think.
Bush's tax cuts expire if Obama does nothing. They were slid through, because the idea had such limited support. And they have been massively damaging to the budget. If Obama "compromises on this, he is one of them. It is just so easy to say, "hey Boner; bring me a bill that extends the tax cuts for everyone under 250k or we (the administration) aren't doing anything." If Boner doesn't do it, he is a "tax raiser". If he does, his base; the "have mores" are pissed. Let's see if Barrack can play 11 dimensional chess with this one.
You're thinking politically, not for the good of the nation. Unfortunately, almost everybody in congress from both parties seems to be doing that. Obama promised to be different. Maybe he'll surprise us and prove that he's different by doing the right thing by saying '******** political ramifications' and allowing the taxes to stay low until the time when the economy improves. Too much to ask?
Okay, I played fast and loose with the numbers. But off the top of my head, the tax cuts increase the deficit by 300 billion a year, right? Of this figure, the top three percent of the population accounts for, what, 70 billion? So they clearly benefit overproportionately from the tax cuts. If the tax cuts didn't create jobs in the first place, how would allowing them to expire make the economic situation even worse?
Well I have to strongly disagree - he would be doing right by the country and saying "******** political ramifications" by letting all the tax cuts expire rather than pandering to the middle class by only letting the tax cuts for the wealthy expire. Letting just the cuts for the wealthy expire would be better for the country's finances than extending all the cuts across the board, but it's still a politics-driven cop-out.
The thing is, most economist would agree with me that raising taxes during a recession, or just coming out of a recession as we are now, is not a good idea. A few might agree with you, Krugman comes to mind, but of course I don't buy his assumptions. The problem is that economics is a complex science, it's not black and white, and so it lends itself to politicking. but I think I'm right on this one.
Only because spending cuts weren't made. In fact, spending blew up while the tax base was cut. Not exactly a recipe for success.
Shorter ASF - we should never raise taxes, someone might get hurt How come taxes didn't go up 5 or 6 years ago when things were "booming"? Cuz we can't put the brakes on prosperity, right? Face it, wingers come up with any and all reasons to not raise taxes on high earners.
I dunno. Given how mired we are in economic doldrums, I can't get too exercised about keeping taxes low for another couple of years. After that, though, all bets are off.
If that's the case all pols and pundits should just STFU right now about attacking deficits. It's high comedy
The thing is, Obama and the congressional Dems don't have to a damn thing. The tax breaks, weighted to the wealthy, just go away. The "party of no" needs to fix this if they want something done. It is important that Obama doesn't do the heavy lifting on this deal. Make the Republicans bring some extending legislation or it doesn't happen. Tell the Republican leaders that any extension of cuts to people making over $250,000 will get vetoed. Let the obstructionists do something.
No, but it's half the battle. Why would you only look at one side of the equation - just because it makes bad politics?
I didn't say that. Of course if the plan is for the federal government to continue to spend at the levels that they are now spending, or even in a scenario in which there are small decreases to spending, then there is going to have to inevitably be a tax increase in order to balance the budget. But at the very least I'd expect that those who chose to serve us in government would have the foresight to wait until the economy rebounds before they implement such an increase.
If you look at it historically, the top percents aren't pulling their weight. Continuing that would be idiotic. They're not going to be hurt much - and definitely not compared to the millions in the middle during this recession - because they're making so much to start with
Why are the Democrats married to this $250K line? Is their some logical formula behind it? Raise the bar to $500K and reinstate the rest. Then look at across the board rate readjustment after the economy gets back on it's feet. Jesus, why is this so hard?
I think you're way wrong on this one. Historically speaking, tax increases have not damaged economic growth. The Bush tax cuts have not helped prevent a recession; they're not creating jobs right now. Letting them expire for the wealthiest Americans would still put the tax rates at a lower level than they were during the Clinton boom years. This idea that rescinding tax cuts or allowing them to expire will harm the recovery is pure fantasy.
It's more psychologically onerous than financially. Reasonable people can disagree that someone who makes $250K in certain parts of the country is upper middle class, not rich. The same can't be said at $500K. Since this is more of an emotional issue on both sides than a fiscal one (again, why $250K?) lets get what we can and then revisit when people are back on solid footing.
Oh, I agree, spending should be cut. But if you raise taxes (especially on those who can clearly afford it), you don't have to cut social programs for those who really cannot afford for them to be cut. I get the feeling all these tax cuts have made a few people a lot richer and a lot of people slightly richer or not richer at all, while plunging the country's fiscal situation into turmoil. Some of you guys have probably seen this: http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html It's pretty cool - I easily balanced the budget by cutting a whole lot of (defense) spending and raising taxes a whole lot on people who have been making out like bandits for the past three decades. It was a hell of a lot of fun!