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Recently a few House Democrats have publicly come out in support of extending President George W. Bush's tax cuts for families making over $250,000 for two or more years. These Democrats are of the view that with the nation expected to continue in a severe recession for the next 18-to-24 months, according to respected economists, and that the tax cuts should not expire, because wealthy families would tighten their belts and not put as much of their fortune toward disposable income. Politically, many also fear being labeled as tax-raisers in the months before the contentious midterm elections.
The idea has gained traction within the Democratic Caucus over recent days, Gerry Connolly, a vulnerable freshman House Democrat from Virginia, told The Hill newspaper, "I think the recovery is sufficiently fragile that we ought to leave tax rates where they are."
In her weekly press conference on Capitol Hill today, though, House Speaker Nancy Pelosi (D-CA) all but closed the door on the idea. Pelosi said passionately, "Our position has been that we support middle income tax cuts, the tax cuts at the high end have increased the deficit enormously, and they have not created jobs over the last eight years of the Bush administration. Think of the inconsistency of what the Republicans have said about these tax cuts, they insisted that the unemployment benefits be paid for, but the tax cuts for the wealthiest in the country should not -- $34 billion for unemployment insurance benefits which create jobs, $700 billion dollars for the wealthiest Americans that don't want to pay for it, and they do not create jobs. I think we have a clear distinction here -- if we want to lower taxes for the middle class and reduce the deficit and create jobs, extending the tax cuts at the high end are not conducive to reaching those goals."
The New York Times on July 16 noted, "The economic recovery has been helped in large part by the spending of the most affluent. Now, even the rich appear to be tightening their belts."
Mark Zandi of Moody's said, “One of the reasons that the recovery has lost momentum is that high-end consumers have become more jittery and more cautious."
More: "[T]he Top 5 percent in income earners -- those households earning $210,000 or more -- account for about one-third of consumer outlays, including spending on goods and services, interest payments on consumer debt and cash gifts, according to an analysis of Federal Reserve data by Moody’s Analytics. That means the purchasing decisions of the rich have an outsize effect on economic data. According to Gallup, spending by upper-income consumers -- defined as those earning $90,000 or more -- surged to an average of $145 a day in May, up 33 percent from a year earlier. Then in June, that daily average slid to $119."
It'll be interesting to see how this story develops after the August recess, if rank-and-file members, back from town halls, report to the House Democratic Leadership that letting the tax cuts expire could be politically damaging, perhaps there could be a change in Democratic policy.
Leave a Comment:
They may be onto something. "Redistribution of wealth" may be a pretty good idea- especially when it's redistributed up to the already wealthy. Who could argure with that?
Hey, JoAnna and NoJoNoBo (or whatever it is)- whyn'cha get on here and agree with me on this? How about it- at least a couple of paragraphs each, describing how great this would be for everyone. Toss in a few paragraphs about all the great things Bush accomplished over his 8 years in charge, while you "have the floor".
It's nice when you're always in the back of Libs minds. At least it takes up some of the empty space that exists there. It's also fun to watch them get all flinchy thinking about you.
I wrote about this in another thread. Isn't it amazing? Amazing that the Democrats are talking about extending the Bush tax cuts? For years that is all we heard from the Democrats/Libs is that the Bush tax cuts were 1) For the rich 2) Caused the Great Deficits, 3 ) Caused the Great Recession 4) Caused that nasty rash on Feisty's posterior. Everything bad that happened under the sun, the Bush tax cuts were to blame. And now, some Democrats are openly discussing extending those cuts! How in the world can the Democrats give up their Holy Grail of excuses for why the debt has gone so out of control? (Hint: The real reason of course is that the government spends too much, but the Libs don't want to talk about that one). I guess this is repudiation by some of the Democrats, a repudiation that the government can deficit spend us to prosperity, that the government can centrally control the economy, that it's the government that produces jobs, and individuals or private companies do not produce jobs.
It's amazing what truths you learn when you understand the Obama-Way is the Wrong-Way.
So Drive-through, with your support of the expiration of these tax cuts you're obviously for increasing taxes on everyone. There are some Democrats though that are now thinking that isn't such a good idea. Please, explain to them, and to us, how raising taxes on all Americans will hasten our return to prosperity. Use as many paragraphs that you need to explain that theory of yours.
Many thanks.
This is where the rubber meets the road!
Thank you Madame Speaker - nothing I love more than watching you box these counterfeit 'deficit hawks' into a corner!
BTW Drive-By: Where's JoAnna's doughnut?
Feisty, I know what I typed previously on the subject is way over your head. But don't fret, I am thinking about you and I want to make it so simple that even you can understand it. What time should the person with the sock-puppets show up at your place? He's real good at explaining things in simple terms and he works with kindergartners all the time, so he understands what he's up against with you.
Joannasmith prefers the typical publican version of budgeting called "tax breaks and spend". Makes SO much sense...
What you describe is certainly the way both the Republicans and Democrats have acted in recent and current times. And no, I don't support it. I prefer low tax rates and a government that lives within it's means.
What do you prefer?
M. Fisher - and it's SO effective, too. I mean we have RECENT statistical data on the overall efficacy! ha
Feisty,
Did we not debunk this earlier this week? Or was it last week. Hard to tell it keeps coming up.
If the tax cuts (were 50% went to the 5% of the richest people) created so many jobs why did President Bush leave office with over 600,000 jobs per month being lost?? I do not believe that tax cuts to the rich increase jobs. The arguments that they invest in businesses and those businesses create jobs. Hello, there are NO jobs. The businesses that do create jobs, most are overseas and and the others are just hoarding cash and showing record profits but still no jobs.
I still have not seen any proof what so ever that the Bush Tax Cuts to the richest people created jobs. I see a lot of theory that it should, but the reality is they have not. Period.
Show us the proof.
I know Retired...
Ya see that's how the righties 'roll'... if you keep repeating something over and over it will magically *poof* come true! lmao!
But you already knew that didn't ya? ;0)
It seems abundantly clear to anyone with half a brain that cutting taxes to create jobs doesn't work. If it did, there would be plenty of jobs.
I used to hear a story about the difference between rats and humans. If you put rats or humans in a maze with cheese at the end they will both learn to find the cheese. If you remove the cheese, the rats will eventually give up looking for it. Humans will continue to look for it forever. Tax cuts DO NOT create jobs. Give it up, people.
"...Tax cuts DO NOT create jobs. Give it up, people."
Well, I might beg to differ on this one. Tax cuts (for the wealthy) DO creat jobs. In India, China, Viet Nam, The Phillipines,.........
Now where DID I put that smelly old donut?
Well, thank god for Nancy Pelosi and I never thought I'd be saying that but I agree with her logical and sound argument. I am sick to death of rich people telling me that I had better pay their taxes or they wont employ me and in the same breath that people who can't pay their own way are scum.
Pelosi certainly doesn't want to help the rich ( the people that actually create jobs )...she actually believes that unemployment compensation stimulates the economy. WOW !
You think the economy is bad now ? Wait until January when the huge tax increases kick in....
Tax cuts get you less than a dollar in stimulus for each dollar cut. Unemployment gets you over $1 for each dollar spent. Ms. Pelosi did her math! An excellent example of letting facts, rather than dogma guide your beliefs!
oh Auntie? it is clear you know nothing whatsoever about econometrics. Allow me to educate you-
Each dollar not taxed gets you three in the economy. Why? Well, there is spending for one thing, (demand side), but there is investment for another, (supply side). It gets you to equilibrium.
Now, government spending is also in some ways stimulative-or was. It is generally agreed that each dollar of government spending generates about an additional sixty five cents in the economy-however, given the size of the deficit, the amount of borrowing,interest owed on that debt, and the lack of monies available to businesses due to the AMOUNT of government borrowing, it is now generally agreed that each dollar of government spending is actually REMOVING a dollar five from the economy. NO STIMULOUS AT ALL. No sixty five cents. Only economic contraction.
Oh,and the promise of high inflation coming down the pike.
Each dollar not taxed gets you three in the economy. Why? Well, there is spending for one thing, (demand side), but there is investment for another, (supply side).
There you go assuming again and making huge generalizations.
Yes, in a booming economy (think the '90s) tax cuts might stimulate the economy. This is hardly a booming economy.
Its fairly obvious that the wealthy, as they are the ones who have the most disposable income to spend in this economy, are not spending now. What makes you think they are going to spend in the next two months or the next two years?
I wonder how much money Pelosi and her husband Paul (a real estate and venture capitalist) made on the backs of the poor because of the Bush tax cuts.
Actually, there is something to be said for the stimulative power of tax cuts. However the stimulative power becomes gradually less and less the lower that taxes are at the time of the reduction.
Assume the top tax rate is at 50% at the time the tax cut is agreed upon and assume that the earner we are speaking of earns $1,000,000 per year that will be affected by the tax cut. Congress agrees to reduce taxes on that person by 10% to 40%.
Prior to the cut, the earner paid $500,000/year in taxes, assuming he found no way of sheltering his taxable income.
After the tax cut, he paid $400,000 for a savings of $100,000/year.
Essentially, the earner reaped a benefit of $100,000 on a virtual tax cut of 20% of the taxes he paid prior to the cut.
So a few years go by and congress decides that they are going to cut taxes again. Last time around, they cut the amount of taxes paid by 20%, so they decide they are going to do that again because it worked well and got us out of the recession last time.
So our earner is paying $400,000/year in taxes. Now HERE is where the lessening power of tax cuts as stimulus comes into play. The last time around, 20% of the amount of tax he paid was $100,000. If congress decides again to cut the amount of taxes he pays by 20%, the amount saved will not equal $100,000. It will equal $80,000, which is a savings, yes, but when you combine it with inflationary forces in the interim, what you have is a stimulus that is less stimulative than it was when you were reducing taxes in the past.
This is primarily the reason that I believe that the cuts President Bush made were so ineffective. He was, in essence, reducing taxes that had already been reduced from their high points and were already relatively low in comparison to most decades since we adopted a graduated income tax rate. He was also attempting to stimulate an economy that was in, if anything, a recession that was very slight at the time. The top of the dot.com recession to the bottom of the dot.com recession was actually fairly negligible and its impact on employment was slight.
In essence, he was attempting to prime a pump that was already running with gasoline that was already watered down.
So how is this applicable to this current situation? Well, we would be lowering taxes from a position that is even lower than before, meaning far less strength than a comparable cut would have had during the Reagan years and combining it with reduced stimulative government spending if the right wing had their way.
That would quickly result in the greatest economic catastrophe in the history of the world.
That is the true stupidity of the position of the austerity hawks right now.
Rich people do not create jobs that is pure bullcrap, right now there have never been so many rich people who have the lowest taxes and least regulations in years many years. So where are all the jobs they created you say they create jobs but before Obama was elected we where losing 750,000 jobs a month. If rich people create jobs then just where the hell are these jobs. Unless you count a rich person hiring an Illegal to do their housework creating jobs. Kill the tax cuts for the top 5%, your supposed to be democrats for crying out loud, the rich have the republicans looking out for them.
It is very exhausting that my President keeps letting the "tail wag the dog"!
Speaker Pelosi has it right! Let those tax cuts for the rich expire! Those cuts DID NOT create jobs, and never will. The super rich will keep their money, hide it in off-shore accounts, and continue while the rest of us muddle through!
Moronic comment...rich people create jobs thru their investments. When they pay higher taxes they create fewer jobs...
So... osamaobama, where are all the jobs from the Bush tax cuts? New jobs DECREASED while Bush was in office. If your "theory" actually had any validity, jobs should have INCREASED during his tenure.
Look at the pretty picture for yourself:
http://www.businessweek.com/the_thread/economicsunbound/archives/2009/06/a_lost_decade_f.html
Trickle down FAILED.
osamaobama,
So what happened to all those jobs that the trillion dollar tax cut for the rich in 2001?
Jobs created 1/1/2001 to 1/1/2009 = 3 million. Needed to maintain job growth = 14 million. 80% fewer than the country needed.
Where are those jobs ????
Here's a thought Osama. When Ronald Reagan cut taxes, some of those cuts made sense but even Reagan said that capital gains taxes should be paid at least close to the individual's personal income tax level--he chose 28%. The Bush tax cuts were unsustainable and reckless particularly when fighting two wars. Millionaires pay less income tax than most of us pay. The capital gains tax rate was cut to 15%, lower than the average middle American family's income tax rate. It does not make good sense for a hedge fund investor who makes a billion on a lucky bet does not pay that as income. It is money earned.
So where are all the jobs from the Obama stimulus?
I have no idea where that Businessweek author got their numbers from, but according to the Bureau of Labor statistics, Buisnessweek's graph is extremely wrong.
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet
More than 7 million jobs were created while Republicans controlled Congress during the Bush years.
lol
So basically the revision of this from the right now is that since democrats took over congress in 2006, in 2007-2008, we actually had no president and therefore any problems that might have occurred during those 2 years are the fault of Nancy Pelosi and Harry Reid.
Therefore, the 3.6 million jobs lost during those 2 years should also be applied to the administration of of President Obama.
Well played, sir. Well played.
Thanks Michael,
I was about to call Nate out on his failed logic but you did a much better job. I would not have added any humor … just facts.
Good job !!
Right here, Joanna. Just click and see for yourself: http://www.recovery.gov/Pages/home.aspx
Well here is a chance for all of the supposed deficit hawks to put their money where their mouths are. If someone really is interested in reducing the deficit and the debt, then they would be willing to use all of the tools in the bag to reach that end.
A simple matter of arithmetic. Less spending + more revenue = balanced budget. One without the other doesn't accomplish a thing.
Taxes, Revenue and the Deficit
Some may think that “Tax the rich, feed the poor, Till there are no rich no more” are only lyrics from the Ten Years After song “I’d Love To Change The World”. Unfortunately, there may be some truth in those lyrics.
There is little debate that our country has a deficit that, if continues, could spell disaster to our economy. How to solve the problem continues to be debated. Cut spending? Tax the wealthy? Leave tax rates where they are in hopes to bring our country out of its economic malaise?
The growth of government and its runaway spending needs to be curtailed. All the taxes in the world won’t solve our problem if spending continues at its current pace. Unpopular decisions will need to be made and some pain will be felt throughout our country. That will be the price we pay to get us on the path of financial security.
Increased tax rates is not the solution. A thriving economy is. A robust nation will produce more employment, more successful companies, new companies, entrepreneurship and a better feeling of self worth. This will produce more consumer spending and a flow of capital. This type of economic recovery will greatly increase the revenue to the coiffeurs of the federal and state governments. It’s not the tax rate that is important, it is the tax revenue. All revenue will increase. Federal, state, local income tax, FICA tax, etc… They will all see an increase.
Increasing federal taxes on the top few percent in our country would be counterproductive. There would be less incentive to make purchases, expand business, invest in a business, hire more workers and even pay taxes. Yes, pay taxes. As the tax rate increases there is a greater incentive to find ways to avoid paying taxes. It is the same group, that some want to tax, that have the ability to find ways to avoid being taxed.
It’s time our leaders make smart tough fiscal decisions and stop going for the day’s sound bite.
A Fed-Up Middle Aged, Middle Class American
http://fed-upamerican.blogspot.com/
Then why didn't all of that happen? It all sounds great in theory and it seemed to work during the Reagan years, but when President Bush did 2 rounds of tax cuts during his term, why didn't it result in the robust, utopian free market nation that your article describes?
The only thing that will result in a robust, thriving nation is corporations started in this country, that make things in this country, employ people in this country, so that those employees can afford to buy the things that are also made for in this country by other people who live in this country. People who have their offices in this country, but make things in other countries, employ people in other countries, to sell to people in this country are not doing a thing for this country. They are only enriching themselves. They are leeches.
People who make billions doing microtransactions on the stock market are enriching themselves. They are leeches. They are not doing a thing for the rest of us.
A corporation that spends nothing in taxes, but millions to keep lawmakers in place who will vote to ensure they continue to pay no taxes does nothing for this country.
That company is a leech.
A considerable amount of what you "wrote" (I guess copying and pasting from a blog can be considered writing) is true. The key words are "if spending continues at its current pace." "Priming the pump" should not continue to be necessary. As the economy grows, tax revenues should grow. Just don't give me this "trickle down" crap! It hasn't worked yet!!
"Increased tax rates is not the solution."
Funny, when tax rates were higher in the 1990's, we did just fine, and the economy DID thrive DESPITE the higher taxes. With the lower taxes from the 2001 and 2003 tax cuts passed under Bush, job creation stalled and the economy didn't go anywhere - the stock market went from a bubble situation to a crash, the Dow careening from 14,000 points in 2007 to 6,000 the month after Obama took office.
A thriving economy helps, but if those WITH money don't purchase things and invest money to CREATE jobs, then there is only one other entity with the resources to do that: The federal government. If you don't want them to do it and run up deficits, get on the phone and start telling your rich friends (indivuduals OR corporations) to create jobs, because those are the two options. Both would be helpful given the sad state Bush left us in, but one or the other a full tilt would certainly make a big difference, and we have neither happening at the moment.
Silly, Jose, that was so PREHISTORIC - the top 2.5% are now emboldened to believe they should never have to be part of the fiscally responsible crowd. They got THEIRS, now screw you.
@ Michael Thompson - Right on, bro!!! We need business in THIS country who will manufacture product in THIS country using employees in THIS country. IMO any American based corporation that outsources to foreign countries for cheap labor should be taxed double!!
Trickle down doesn't work.
Nancy in Wonderland.
Yet it has also been reported that the largest number of foreclosures has been on the high income wage earners who are turning in the keys to their expensive second homes and vacation homes because they simply see them as bad investments, not because they can no longer afford the mortgage payments.
For the middle class and poor a good economy means being able to afford a roof over one's head and to provide their families with basic survival needs. A bad economy means that they lose their homes and scramble for those basic survival needs. For the wealthy a good economy means a high return on their investments so they can add even more money to their bank accounts. A bad economy means dumping those second homes or vacation homes that will not help to pad their future bank accounts yet that add too, and impact, the current housing slump and this country's ability to climb out of this recession.
NOOO DOUBT, CA...! I could not believe when I read that the wealthy were just dumping their homes on the market but, you know, they don't care because they have the cash to heal up their credit from foreclosure.
They talk bad about the trailer park crowd who purchased a home that they couldn't afford later and yet they are perfectly fine with dumping homes on the market that THEY COULD STILL AFFORD only because it doesn't look good on their balance sheets. Wow! Talk about your hypocrisy.
I read something about the rich allowing their second or more homes to go into foreclosure. Guess if you have enough money to have more than one, just bail out. And then they wonder why the rest of us want to tax them more. Redistribution of wealth has been from the have nots to the haves. I'm all for making money, as much as a person can, but the tax rates need to be fairer.
I'm for it too.
We've gotta get this economy back on track. Meanwhile, we've gotta start to bring the military home for good in places where our non-combat existence is just that. We can't be the world policeman nor should we. It would cut government spending like the Republicans want and reduce our debt too.
There's that old "trickle down economics" crap again. Are the congress folks NUtS or what? If the riich were going to create joobs, they would have done so by now. Anyway, regardless of what Sen Kyl says, and the repubs all believe, we do have to pay for ntax cuts, the same as we should pay forn spending.
Little discussed tidbit. Ever wonder why the Bush/GOP tax cuts were written to expire at the end of 2010. They knew exactly what they were doing. It becomes a topic for the 2010 elections with republicans able to claim--"the dems will raise your taxes". Just like clockwork--they roll out the "tax and spend" line.
Good for Nancy Pelosi. Pres Obama has spoken about keeping the middle income tax cuts but not those for the wealthiest. The dems making the noise are the conservadems most running for re-election. Trouble is they become guilty of kicking the can down the road for political purposes. Democrats can easily make their case for allowing those high earner cuts to expire--if we want to decrease the deficit and the debt, some tax increases are required.
I think some categories of taxes like the Estate Tax, so-called death tax, should be reworked to increase but incrementally based on the size of the estate so that family farms, family businesses are not taxed at the same rate as say Geoge Steinbrenner's would have been (there was one-year exemption because of the economy). There are areas of compromise that both sides could agree on provided they really want to fix the deficit and reduce the debt.
Jody, Iowa
Little discussed tidbit. Ever wonder why the Bush/GOP tax cuts were written to expire at the end of 2010. They knew exactly what they were doing. It becomes a topic for the 2010 elections with republicans able to claim--"the dems will raise your taxes". Just like clockwork--they roll out the "tax and spend" line.
____________________________________________
Jody, sorry to muddy the liberalthink waters you swim in on Planet Liberal. The factual reason for the expiration is the "Byrd rule", named after DEMOCRAT Senator. Robert Byrd. From the Tax Foundation website FAQ:
Why Are the Bush Tax Cuts Expiring?
Why are the Bush tax cuts, which were passed primarily in 2001 and 2003, expiring at the end of this tax year? In other words, why weren't they made permanent?
During the legislative fight over tax cuts in 2001, Senate Republicans could not predict with certainty that they would reach the 60-vote threshold of support that would have enabled them to make the tax cuts permanent. As a result, when Congress passed the first of many tax cuts during the last decade in May 2001, it passed it as a reconciliation bill which needs only 51 votes. That was the so-called Bush tax cut, formally known as the Economic Growth and Tax Relief Reconciliation Act (EGTRRA, pronounced egg-tray).
Reconciliation was devised in 1974 as a way to for the Senate to deal more effectively with budget bills, but it soon became a technique to limit amendments and debate. In 1985, the Senate added the so-called Byrd rule to reconciliation. Named after Senator Robert Byrd, the rule forbids a bill passed under reconciliation from, among other things, altering federal revenue for more than 10 years.
Wow. You're absolutely right, Joe. The republicans will certainly not try to use this to paint the dem's as tax and spenders. All of us who think otherwise stand corrected.
I think tax and spend is a fine alternative to 'give tax breaks and spend' don't you, Joe?
The tax cuts could have been MORE temporary. Why pick 10 years?
So the middle class tax cuts won't add to the deficit? That's the entire whine from the Left, correct, that the Bush tax cuts caused this great recession? So now you're saying that the middle class taxes breaks will get extended. Got any cost analysis on that statment? How much increasing the taxes on the wealthy will lower the deficit? Or do you just like to use the nations tax policy as a form revenge against the rich?
This is FUNNY STUFF!!!
My guess is that the Congressional Dems will not pass a bill doing ANYTHING about the expiring tax provisions prior to the election. It's a no-brainer for EVERY Republican running for office to tout that the reason for that is the Dems plan to raise taxes on EVERONE after the election. Why? Because that's what Democrat's do. Think about it: Why do you think Barry Obama set up his deficit reduction commission to report on Dec. 1, AFTER THE ELECTION?? I look forward to the Dems denials: "Trust us, we won't raise your taxes if you vote for us". And, if the American people are stupid enough to belive that, then they'll get just what they deserve: a BIG tax increase right in the A$$.
LOL!!!
LOL! You mean like Bush senior did! LOL!!!
President Obama has yet to increase taxes on those who make less than 250k. We will see what he does with that. But, as I said, tax and spend is so much more logical than 'give tax breaks and spend'.
He hasn't raised taxes on anybody under 250k? News for you M.Fisher, the Obama regime is currently in court defending the individual mandate in the health care law under the ground that it is a tax! Also, has the federal government figured out how to return all the federal tobacco tax money that is paid by those making under $250,000? Nice try..
Hey Joe - so what you're saying is, it's okay for the Republicans to have started two wars (completely and utterly unpaid for, except on what? Oh yeah, DEFICIT SPENDING) and ALSO pass TWO tax CUTS at the same time (again, with no resultant cuts in spending) while they controlled Congress AND the Presidency, and when Democrats try to be the responsible adults in the room and do something that actually fixes the problem (unlike Republicans, who not only created it, but ignored it while they were in power), you're now going to whine and cry the old line about "Wah, Dem's are tax and spenders"?
Where were you when Republicans were being irresponsible with our tax revenue?
Why don't you want to hold irresponsible Republicans accountable for the mess they created?
What are your solutions to the predicament that irresponsible Republicans put us in?
More tax cuts? (We tried that - didn't work over the last 10 years.)
Cut government spending? Okay... where? Defense (that is equal to the next 25 countries spending COMBINED)? I'd be okay with that.
Generic "waste and fraud"? Well... lookie there. Obama just signed bill today that takes a step towards reducing that.
Got anything else?
"$700 billion dollars for the wealthiest Americans who don't want to pay for it, and they do not create jobs."
Um, but that's their money. How do they pay for their own money?
You can't reduce the deficit without cutting spending (and in my mind, that includes bringing our troops home now!). From what I can tell, all that Nancy wants to do is create more tax revenue to pay for the programs the Democrats want implemented; there's no serious talk about cutting spending anywhere that I've seen. And she will be scratching her head in November, wondering how in the world she lost her gavel.
Conversely, you could say that the opposite is also true. Just as you can't reduce the deficit without reducing outflow, you also can't reduce the deficit without increasing inflow. So basically, you either eliminate the loopholes that allow 50% of the corporations in the nation to pay no tax or you are forced to get your revenue elsewhere.
Suggest things to eliminate spending-wise and I will listen, but until the right acknowledges the reality of math, this argument is all a huge canard. Saying that everyone needs to make sacrifices to right the ship is probably accurate, but the reality is that when the right wing says it at the same time they are bloviating and wringing their hands about having to make sacrifices in the form of higher taxes, the reality is pretty much that they care about deficits only as long as the people who have to suffer to sacrifice are not them.
So what is left? If the right doesn't really care or else they would be willing to make sacrifices in their own lives as well as the lives of their neighbors, what is this whole exercise in national whining actually all about?
They just want to score points. That's it.
And we will all be wondering why the sudden deficit hawk pub's will be back to "tax breaks and spend".
Bring the troops home now, and stop the bleeding of money into the corrupt government of Afghanistan (which will never not be corrupt), and that would be a fantastic way to cut spending. But don't continue to add entitlement to entitlement. And, your post suggests that you ignore the fact that the wealth are actually paying taxes; it's not as though they're not paying anything.
And my post did not mean to suggest that the only thing you have to do is cut spending; of course it necessitates the possibility of increasing revenue (how, exactly, to accomplish that is another issue altogether). My post was only meant to point out that I have not heard a word from Democrats as to how they are going to go about cutting spending.
MFisher, I never said I agreed with "tax breaks and spend." I am specifically talking about cutting spending and the necessity of such an action. Don't twist my words to fit your narrative.
Jill - they are NOT going to cut spending. The economy as it is today NEEDS us to CONTINUE spending. However, once the Bush Tax cuts expire, we will then have more 'projected' revenue to use for spending to 'right the ship'. Once the economy settles, and there is less unemployment, then - and only then - will cuts be 'investigated'.
Ben bernake, the Fed Chairman, just yesterday testified that the US needs to INCREASE spending. I likend this phenomenon to soneone who just got punched in the stomach. At the point of impact, the oxygen in your body is exhaled, and there is a point where there is a lack of oxygen in the body. The body will react by trying to gulp as much oxygen as it can to satisfy all of the oxygen starved cells in the body that are SCREAMING for the brain to get them the oxygen they need - NOW.
At this point, you would be ingesting MORE oxygen than you wold normally be ingesting at a rested state. This continues until the cells in your body have gotten their oxygen and have sent your brian the ALL CLEAR.
Using this analogy, the oxygen is money and the body is the economy. In this analogy, when the body is recovering, it ingests MORE oxygen than it wold normally. This is where the American economy is now - it is recovering from the lack of oxygen (money) in the economy. The huge ingestion of oxygen (money) is a NATURAL response to a traumatic event. To try and 'cut' the spending of that money - while the economy is recovering - is like putting a plastic bag over the head of that person being punched in the stomach. They are NOT going to recover and reach equilibrium until they have enough oxygen to do so. The Bush tax cuts would be like an EMT administering oxygen from a new, HUGE oxygen canister through a cannula that would help get the body back in equilibrium. The temporary oxygen canister (the stimulus) has been used up.
Now, the body will still feel pain (unemployment) for a while even when the body is back in equilibrium, but the breathing is more measured.
At some point, using oxygen will not be necessary, and the body will intake oxygen normally on its own.
So, stopping spending is not something that the Democrats will do. The economy cannot recover if that is the case. Hopefully my analogy will be clear why we should NOT stop spending right now.
I have always heard that having a robust middle class is what fuels the economy. I wonder how much their taxes will increase if the tax cuts are allowed to expire. Bush cut them in order to stimulate the economy and increase consumer spending--it didn't happen. We had a recession instead (I know--other factors contributed, mainly the housing/banking problems). And we had 0% job growth for his years in office. I'm NOT blaming Bush; perhaps some good came out of these tax cuts. I just don't see how they helped. And obviously, those in the top 5% of income earners are hardly "hurting" right now. Why don't the rich want to pay their fair share? It seems like the burden has been on the middle class for far too long.
I agree with "fed up" that government spending needs to be addressed, but unfortunately, we have two wars going on right now that have never been adequately funded. Is there a middle ground--like letting the original tax cuts expire, but giving a new rate that is somewhere between the original rate and the one that they've had in recent years?
So wait a minute Drive by - you're contending that letting people keep more of their own money is redistribution? Do you know what that word means? I got news from you, if the government was taking money from the poor and giving it to the rich, that would be upward redistribution. Letting the wealthy keep more of their own money is the exact opposite of redistribution! Sadly, judging from other comments on this story, you may still be one of the smarter liberals commenting on this story. Thanks though, I got a great laugh from your comment!!!
Once again, a con doesn't understand sarcasm when he sees it. A great laugh indeed!!
Tony-true, although if you think about it as percentages, tax cuts to the wealthy reduce their share of total tax revenues, which means the share of the middle class is automatically raised. If spending is not cut to offset the cuts in tax revenue, than the middle class must pick up the slack. So, in essence, it is taking from the middle and giving to the rich...just not directly. There is a reason the income gap in our country is at such historic levels. Personally, I don't think the $250,000/yr benchmark is a good indicator of rich vs not-rich, and I also think they should only let the tax cuts expire after the recession is over. However, that will increase the deficit and is thrown into the same category as defecit spending, and the republicans that say otherwise are acting hypocritical.
The mere mention by some Democrats of extending the Bush tax cuts is pure insanity. Anything that the Democratic Party has stood for for the last decade, and really what should be one of their core beliefs would be just thrown out window. The Democratic Party would then stand for nothing. The Bush tax cuts were ill advised at the time and have been only proven over time to be wrong headed. If they were so wonderful wouldn't they have prevented the recession in the first place? The Bush tax cuts crippled Obama's ability address the recession with a real stimulus plan. If any elected Democrats fear the common man's/voter's reaction to allowing these tax cuts to expire, then they should switch political parties now, they are not Democrats, and the only cause they are interested in is their own re-election.
Who benefits more from the US economy - the poor who receive Medicaid and $250 in food stamps each month, or the rich who live in a country where they are free to start just about whatever business they want, travel wherever they want and have available to their children the finest and most expensive universities in the world? There is a price to pay to live in this country where you have both the means and the availability to send your kids to Harvard, Yale, MIT or wherever. The poor would still be poor wherever, but would the rich want to rich anywhere else? How much more would the rich have to spend to protect themselves, their families and their possessions in Mexico, Brazil, India or even in the civilized countries of Europe?
And poor in this country does not equate to poor in another country, so what exactly is your point?
Duh, Jill - that the rich have it good here, and therefore should pay more in taxes since those taxes help support their government which protects their investments, intellectual property and real estate, just to name a few things.
Your reading may be okay, but your comprehension needs some serious work.
How much is enough, Jose? The rich are not only paying taxes to support "their investments, intellectual property and real estate," they are also paying taxes to support programs in this country that benefit the poor. And the question posed was whether a rich person would want to be rich anywhere else? In the same vein, it could be said that a poor person would not want to be poor anywhere else.
I agree with Nancy Pelosi. Let these tax cuts expire. Put forth job creating tax incentives instead. Democrats need to quit exploring the idea of extending this blanket entitlement for the rich provided, and not paid for, by Bush during his 8 year reign.
Obama did that with his $800 billion stimulus program last year. Net result - no jobs.
Only if you subtract the 682,000 jobs it DID create....
http://www.recovery.gov/Pages/home.aspx
Lets use your numbers and do a little math. Round the jobs to 700,000 too, just to make it simple.
$800 billion dollars has created 700,000 jobs. That's $1,142,000 for each job.
But then you come back and say "But JoAnna, only half of the stimulus has been spent!" Well, all right then, now it's "only" $571,000 per job.
Those are some really good jobs. Getting into the range of what they are paying the Ag workers helping the farmers in Georgia.
Again, these are yours and the Obama administration numbers. In truth, and on net, the US has lost jobs over the last 20 months.
Hey Joanna, wanna talk numbers? Remember how much of the stimulus was "tax cuts" because Republicans (only 3 voted for it, and they were the ones holding it up unless it contained what "they" wanted - remember, Dems didn't have 60 votes then)? It was about half. So half the money of the stimulus went to... YOU!
So why aren't YOU creating a job? You got a tax cut, thanks to the Maine Republicans. How many jobs did YOU create today?
And yes, I agree, the U.S. has lost jobs over the last 20 months. But ya wanna compare how many we were losing when Bush left office compared to now? Remember, when Bush was in office, we DIDN'T have a stimulus bill....
(Go look - Obama wins this one by a loooooong shot....)
So you say you want to talk numbers, but then you go off on a tangent ranting about Obama not getting everything he wanted because of the Republicans. Look it up Jose, the tax breaks in the $787 billion spending bill was $288 billion, or 36%, not half. You're credibility is not looking good on these claims Jose.
And not all of the tax breaks were because of Republicans Jose. The initial Senate bill has $218 billion in tax breaks. The Republicans (Collins, Snowe, and Spector) negotiated the extra $70 billion into the package. It was the Democrats that included 75% of the initial tax cut money into the bill.
And lets look at those tax cuts. $116 billion of the $288 billion, a full 40% of the breaks went to people making less then $75,000 per year with them being eligible for $400 tax credits. No pay off for the "rich" there. Another $70 billion went for a one year exclusion of middle-income tax payers having to pay the alternative minimum tax, the tax that his hitting more and more in the middle class because it was not indexed to inflation.
So a full 65% of the tax breaks went to the middle class. It also was piled on to the debt. Other items like the $15 billion for the $8,000 credit for new home buyers was also funded in the tax breaks.
So don't run around saying "half the stimulus was tax breaks", it wasn't. And the breaks went to the middle-class, while the debt goes to everyone.
And again, on net, no jobs were produced.
"According to Gallup, spending by upper-income consumers -- defined as those earning $90,000 or more -- surged to an average of $145 a day in May, up 33 percent from a year earlier. Then in June, that daily average slid to $119."
Looks like the upper-income people finaly ran out of things to buy, or maybe they just run out of space to store all that stuff they bought, either way my heart goes out to them, it's tough to be in their situation.
This is a test to post.
Finally fixed my posting problem and thank goodness because I have a lot to say on this subject since evey boss I have had has been worth $10 million to $50 million.
Anyone that believes wealthy people create jobs when they get tax cuts or pay lower taxes on personal wealth is insane or stupid.
I have worked for wealthy individuals for most of my 35 year career as an executive personal assistant. I know everything they do, what they spend their money on, and more than I want to know. The many that I have worked for, whether they are worth $10 million or $50 million only want more tax cuts and lower taxes so they can spend money on themselves and their kids/grandkids, not create jobs.
My boss spends more on one dinner out with his wife than most people earn in a week. Their idea of a large charity contribution is to give to the university they attended and/or the university they want their children/grandchildren to attend. They especially like to have rooms and/or buildings named after themselves, mostly at these universities. I'm not saying their charitable contributions are not appreciated, just that their charitable contributions do little or nothing to improve the lives of others in need and are in reality selfish contributions and all about them.
Higher taxes on personal wealth will not result in any alteration of their lifestyle or less spending by these individuals becasue it doesn't even dent their worth. Whether its dinner for two out for $1,000 or a family trip to the Caribbean at $50,000 not including the private jet, they will continue spending at the same level because they can. Conservatives are somehow convinced that wealthy people create jobs when they get tax cuts on personal wealth. This is simply not true and there is no evidence to support this claim either.
I certainly would never begrudge success and wealth, however, these individulas should pay a higher tax rate than the average middle class worker and they should pay higher taxes on investments.
I agree 100%
This is a list of SOME of the tax credits that will expire:
Child Credit: This Credit will shrink from $700 to $500 per child on January 1, 2011.
The Income Tax : Rates will increase between 3 and 4.5 percentage points in each bracket on January 1, 2011.
The 10 Percent Bracket: The bracket will be eliminated on January 1, 2011, raising the income tax burden of many workers by 5 percentage points.
The 15 Percent Bracket for Joint Filers: On January 1, 2011, the upper limit of this bracket will shrink from 200 to 167 percent of the upper limit of the 15 percent bracket for single filers, creating a marriage penalty.
Standard Deduction for Joint Filers: On January 1, 2011, this will shrink from 200 to 167 percent of the standard deduction for single filers, creating a marriage penalty.
The Estate Tax: The top rate for this tax will increase to 60 percent on January 1, 2011, and the value of an estate exempt from taxation will shrink to $1 million.
Additional deduction for state and local property taxes for those who don’t itemize
Deduction for qualified tuition and fees of up to $4,000 for higher education
Deduction of up to $250 in classroom supplies (available to teachers, other educators)
Election to itemize state and local sales taxes instead of state and local income taxes
Up to $2,400 of unemployment benefits excluded from gross income
Um, these expiring tax credits will be extended if you are middle class. I like the way you tried to spin the expiration without mentioning there will be extensions. Neat trick though.
The tax cuts on the wealthiest individals, however, will expire.......
Again I was just showing that 98 percent of all Americans benefited from the Bush Tax cuts, and over half the so-called cost was for people earning under 250K.
Well when are they going to be extended? The fact is they have to be extended this year or they will expire, and who knows if Congress will agree to it. After the Democratic congress is booted out will they use their lame duck status to continue these tax cuts to the people that voted against them. And the fact is the Republicans will still have to agree to them, even in a lame duck session. And they may hold out until all the tax cuts are renewed.
You are right, 98 percent of us benefitted. We each got a dime from Rockefeller.
all pay stepped out usa built by unions aka middle class protected by middle class all done step by step all pay their fair share fair for all.