Bush tax cuts? Fuck it, let em go

[Gzette]

http://www.nytimes.com/2010/12/06/opini ... quVSf2n7iw

Back in 2001, former President George W. Bush pulled a fast one. He wanted to enact an irresponsible tax cut, largely for the benefit of the wealthiest Americans. But there were Senate rules in place designed to prevent that kind of irresponsibility. So Mr. Bush evaded the rules by making the tax cut temporary, with the whole thing scheduled to expire on the last day of 2010.

The plan, of course, was to come back later and make the thing permanent, never mind the impact on the deficit. But that never happened. And so here we are, with 2010 almost over and nothing resolved.

Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?

The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.

Think about the logic of the situation. Right now, the Republicans see themselves as successful blackmailers, holding a clear upper hand. President Obama, they believe, wouldn’t dare preside over a broad tax increase while the economy is depressed. And they therefore believe that he will give in to their demands.

But while raising taxes when unemployment is high is a bad thing, there are worse things. And a cold, hard look at the consequences of giving in to the G.O.P. now suggests that saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils.

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

So the potential cost of giving in to Republican demands is high. What about the costs of letting the tax cuts expire? To be sure, letting taxes rise in a depressed economy would do damage — but not as much as many people seem to think.

A few months ago, the Congressional Budget Office released a report on the impact of various tax options. A two-year extension of the Bush tax cuts, it estimated, would lower the unemployment rate next year by between 0.1 and 0.3 percentage points compared with what it would be if the tax cuts were allowed to expire; the effect would be about twice as large in 2012. Those are significant numbers, but not huge — certainly not enough to justify the apocalyptic rhetoric one often hears about what will happen if the tax cuts are allowed to end on schedule.

Oh, and what about confidence? I’ve been skeptical about claims that budget deficits hurt the economy even in the short run, because they undermine confidence in the government’s long-run solvency. Advanced countries, I’ve argued, have a lot of fiscal leeway. But anything that makes permanent extension of obviously irresponsible tax cuts more likely also sends a strong signal to investors: it says, “Hey, we aren’t really an advanced country; we’re a banana republic!” And that can’t be good for the economy.

Last but not least: if Democrats give in to the blackmailers now, they’ll just face more demands in the future. As long as Republicans believe that Mr. Obama will do anything to avoid short-term pain, they’ll have every incentive to keep taking hostages. If the president will endanger America’s fiscal future to avoid a tax increase, what will he give to avoid a government shutdown?

So Mr. Obama should draw a line in the sand, right here, right now. If Republicans hold out, and taxes go up, he should tell the nation the truth, and denounce the blackmail attempt for what it is.

Yes, letting taxes go up would be politically risky. But giving in would be risky, too — especially for a president whom voters are starting to write off as a man too timid to take a stand. Now is the time for him to prove them wrong.

Agree x1000. How much Obama has kowtowed to the GOP is my biggest disappointment to his presidency.

[Leonaerd]

goddamn that felt good to read











too bad obama is one of them. here's hoping, though

[Aabidano]

I agree, Obama should let them expire and use his great speaking ability to explain to the country exactly why it happened. Like he didn't do with "health care reform".

I assume he'll knuckle under.

*Edit - He did:
http://www.bbc.co.uk/news/world-us-canada-11933043

[miir]

What a spineless piece of shit.


You guys are so fucked.

[Kilmoll the Sexy]

Yea...so spineless to actually do for the first time what he promised before he got elected. Bipartisanship has to start somewhere...and he has not even attempted working with the GOP until this. Like it or not, the wealthy have the money and are the ones who make businesses happen. Jobs need to start picking up and this is a start. Just the perception that people have more money will make them spend more and thus the economy will pick up.

[miir]

Yea...so spineless to actually do for the first time what he promised before he got elected. Bipartisanship has to start somewhere...and he has not even attempted working with the GOP until this.

Yeah, he obviously made no compromises with the mess that healthcare ended up being.

[Fairweather Pure]

This is easily my biggest disappointment with Obama. As if there were any doubt who runs this country. Reading that made my stomach turn.

America deserves exactely what we get. This just further fucked our country. Absolutely unforgivable.

[Aabidano]

This isn't bipartisanship, it's another case of the Republicans digging in their feet and refusing to budge, and pussy democrats giving in. Failure and pointing the stinky finger at the source was a better option.

Just the perception that people have more money will make them spend more and thus the economy will pick up.

Except that while seeming to make sense, if you look at the numbers\history it doesn't actually work that way. This is the whole premise that the tea party operates on; things that seem OK until you think them through.

[Kluden]

Oh just let the fucking thing expire. On the individual level, the tax cut wasn't anything crazy special. Rewrite a different tax plan next year. Does anyone know what their taxes were like before this "drop" or what they will return to if it expires? My guess is 99% of Americans have no fucking clue. This is both parties' way of making voters hate the other party with more rhetoric.

edit: I just realized they inked an extension with some modifications. So, Democrats got something, Republicans got something, and the deficit is paying for it. Super...who does that help again? Right, its helps the parties constituents feel like their politicians didn't fuck them. The deficit got hit, so we got fucked. We, as in all tax payers and our children.

Some deal. The Teabaggers are going to have a field day mocking this one. Although I guess its some sort of victory that dems and repubs sat in a room and hammered out an agreement.

[Fairweather Pure]

I used it once already, but it's totally worth repeating.

[Sylvus]

Oh just let the fucking thing expire. On the individual level, the tax cut wasn't anything crazy special. Rewrite a different tax plan next year. Does anyone know what their taxes were like before this "drop" or what they will return to if it expires? My guess is 99% of Americans have no fucking clue.

I'll bet that most of America doesn't even realize how the tax brackets work, and that you only pay the rate of each bracket on your dollars earned that are greater than the floor of that bracket. Tax cuts for only the middle class will still affect rich people; their first $250k is taxed at the same rate as anyone else's. The tax cuts expiring would cause rich people to lose an extra 4 and-a-half cents on every dollar they make starting at dollar 250,001. Boo-fucking-hoo.

[Kilmoll the Sexy]

Oh yea....the tax cuts are why the deficit is fucked up. Stop spending more than what you take in instead of taxing more to spend more. Government spending is not what drives a good economy.

[Chidoro]

Oh just let the fucking thing expire. On the individual level, the tax cut wasn't anything crazy special. Rewrite a different tax plan next year. Does anyone know what their taxes were like before this "drop" or what they will return to if it expires? My guess is 99% of Americans have no fucking clue.

I'll bet that most of America doesn't even realize how the tax brackets work, and that you only pay the rate of each bracket on your dollars earned that are greater than the floor of that bracket. Tax cuts for only the middle class will still affect rich people; their first $250k is taxed at the same rate as anyone else's. The tax cuts expiring would cause rich people to lose an extra 4 and-a-half cents on every dollar they make starting at dollar 250,001. Boo-fucking-hoo.

That all depends on where you live which these blanket dollar thresholds never do.
250k household income isn't rich by me.

And it isn't just federal taxes, state taxes have been creeping up and the worst offender is the local tax bull I've been getting lately. Various "services" which used to be included in my local taxes are no longer covered. They are skinning the cat all kinds of ways.

It's all a problem because there's no spending accountability on any level. All kinds of forces are bilking the system. I'm tired of getting fucked by the bracket level. Damn thing keeps creeping up at the same level of income growth so you're perma screwed by mearly moseying along. You top that off with your calc of an additional 4 1/2% on each dollar earned over the threshold, and it is worth boo fucking hooing over. Change the level or put a regional factor in because 250k for annual household income is not rich at all.

[miir]

250k for annual household income is not rich at all

That level of income is above the 98th percentile.
The median household income in the US is 52k.
In your area (one of the 'richest' in the country) the median household income is around 110k.


I'm pretty darn sure that 250k qualifies as 'rich'

[masteen]

Oh yea....the tax cuts are why the deficit is fucked up. Stop spending more than what you take in instead of taxing more to spend more. Government spending is not what drives a good economy.

You do realize who is and has been responsible for government spending spiraling out of control for the last decade, right? You can't honestly dump the current budget crisis on the Democrats. They've shown time and again exactly how ineffective they are at everything.

[Kilmoll the Sexy]

I didn't put a label on which party was spending. They both like to spend out of control, but this last pure Dem triumverate went apeshit and is why they got put in check. There is a serious need to put a stop on the spending by the government across the board.

[Aabidano]

I'm sure you're aware in parts of NJ and CA $250k\yr is basically squat, that's why you see so many people in those areas with 100+ mile daily commutes. Gogo fiscal deregulation and exponential mortgage and wage inflation.

Working in a NJ group and being paid Tampa rates kept me employed through a couple downsizings, we canned\divested\spun off ~100k(?) people from 2001-2006.

A guy at work was complaining about expansions of Govt privilege in reference to Obama today, all of which was enacted under Bush.

[Chidoro]

Did you know I lived in NJ Aab? I guess I mentioned it a few times.

Miir, my household overhead before any income tax is over 80k each year.

250k isn't shit where I live. You can sample your median averages all you want, it's still not a rich hh income. End of story.

[Aabidano]

this last pure Dem triumverate went apeshit and is why they got put in check.

That was the spin that won the mid terms, but sadly doesn't really reflect reality all that well. They couldn't advance their agenda in the 2 years when they held all the cards. Of course the republicans didn't exactly cover themselves in glory during the preceding 8 years either.

There is a serious need to put a stop on the spending by the government across the board.

No argument at all from me, but the group that is about to take office aren't going to do it. You've been bamboozled.

[Aabidano]

Did you know I lived in NJ Aab? I guess I mentioned it a few times.

Yep, most of my co-workers are\were in and around Hunterdon county. Not a cheap place to be at all.

[Siji]

I don't like what happened, but I understand and support the decision Obama made.

He would either catch flack for standing his ground causing middle class people losing things or he'd catch flack for temporarily compromising so middle class kept things. He made the better of two shitty choices. What would have been gained by standing his ground here? Showing the country what idiots the GOP is? No worries, there's two years of that coming up. I don't want a president that won't make hard decisions because he knows they'll be unpopular. I want one that's working for the benefit of the people that live here.

Of course all the news is going to report is how 'Obama buckled'. At least FOX has some new material to last another 6 months.

[Boogahz]

Did you know I lived in NJ Aab? I guess I mentioned it a few times.

Miir, my household overhead before any income tax is over 80k each year.

250k isn't shit where I live. You can sample your median averages all you want, it's still not a rich hh income. End of story.

End of story? 1st amt is NJ, 2nd is US:
Median household income, 2008 $70,347 $52,029
Per capita money income, 1999 $27,006 $21,587

You do realize what a "median" or "average" means, don't you? Just because 250k isn't shit to YOU, doesn't mean that it is not shit to the majority of people in the State.

[Aabidano]

End of story? 1st amt is NJ, 2nd is US:
Median household income, 2008 $70,347 $52,029
Per capita money income, 1999 $27,006 $21,587

You do realize what a "median" or "average" means, don't you? Just because 250k isn't shit to YOU, doesn't mean that it is not shit to the majority of people in the State.

Well, it is shit looking at the cost of living for the area, 70k\year in Hunterdon Co will buy you a life that someone in my area will get @ $35k, or someone in Most of the rural South or Appalachia could get for $25k. The NYC area and almost all of NJ is insanely expensive in just about every way.

They transferred some guys from my old group to MA with no cost of living adjustment, that was basically a 30-35% pay cut.

[Boogahz]

cost of living is not household income

[Siji]

Cost of living has fuck all to do with how much people in the area make on average. What they *should* make perhaps, but not what they do make in reality.

[Soreali]

End of story? 1st amt is NJ, 2nd is US:
Median household income, 2008 $70,347 $52,029
Per capita money income, 1999 $27,006 $21,587

You do realize what a "median" or "average" means, don't you? Just because 250k isn't shit to YOU, doesn't mean that it is not shit to the majority of people in the State.

Well, it is shit looking at the cost of living for the area, 70k\year in Hunterdon Co will buy you a life that someone in my area will get @ $35k, or someone in Most of the rural South or Appalachia could get for $25k. The NYC area and almost all of NJ is insanely expensive in just about every way.

They transferred some guys from my old group to MA with no cost of living adjustment, that was basically a 30-35% pay cut.

As someone that lives a train ride from NYC and works there I can tell you its fucking painful for the middle class here, unless you're in the upper bracket. I'll take every tax cut I can get.. Surprisingly I moved closer to the city and my costs got cheaper.. But thats only because I got the hell out of Bergen County, NJ aka Useless Housewives of NJ-county.

[Aabidano]

Cost of living is not household income -

Agreed, but it's what was behind the comment that was disagreed with.

Who cares if you make 250k\yr if you have to live in NJ to do it?

What they *should* make perhaps, but not what they do make in reality.

That's a whole 'nother conversation, labor economics in the US are kind of broken right now.

[Boogahz]

Cost of living is not household income -

Agreed, but it's what was behind the comment that was disagreed with.

Who cares if you make 250k\yr if you have to live in NJ to do it?

If you are over 3x the median income for the state and worried about cost of living, then you might...might...be living beyond your means to begin with. I see no reason that 250k+ earners in one area, who are still the minority in that area, should be taxed less than a 250k+ earner in another area.

[Chidoro]

You should really just see what 250k a year by me will get you compared to, not only another state, but another town over. I can guarantee you would not think that they would fall under the "rich american" category and should be taxed accordingly. I can take you for a ride within a 5 mile radius around my house and you will see a lot of poor people living in poorly kept areas, a good number of upper middle class that have good salaries but a reasonably humble living like myself and a few really wealthy people.
It's a scaled economy depending on where you live and the country was trying to call it equal across the board. I'm glad the cuts are being kept in place. My household was going to be called rich when we most definitely are not.

[miir]

Your household income is in the top 1.7% of the US.


I gotta wonder how big your house is and what kind of cars you guys drive if you don't consider yourself wealthy/rich.

[Fairweather Pure]

My wife and I are well under 250k and we live pretty goddamn good.

[Aabidano]

I understand what you're saying Chid but the tax code is too arcane already, adding in a localized cost of living adjustments isn't a path I want to see them go down. We've got enough problems already. A consumption-type tax would be a double whammy in an area like yours as well.

When I moved to where I am now it was still mostly citrus and cows, and cheap. Even by FL standards, though it's since become very popular. While I could afford to buy here now, I don't know that I would be willing to.

[Chidoro]

Your household income is in the top 1.7% of the US.


I gotta wonder how big your house is and what kind of cars you guys drive if you don't consider yourself wealthy/rich.

It's about 1900 sq feet built in the 1920's. 3 bedrooms, 1 1/2 baths, no central air. Finished basement and a deck on a lot size of 50x100 feet. I pay over 12k in property taxes and my house, as humble as it sounds, is worth nearly three quarter of a million dollars. Less than 2 miles away, I can halve the cost of everything if I'm willing to live in that type of neighborhood, and I'm not.

I was driving a '98 civic until last month. I sold it last Monday with over 234k miles. I now drive my wife's 2001 civic with 168k miles on it. We bought our first new car in nearly 10 years, a 2011 Sonata.

[Sylvus]

But the point is that what Obama (Dems, whatever) had proposed was that the cuts would expire for people making over $250k. That first $250k wouldn't have changed one cent. So while $250,001 might not make you "rich" in your area (I wouldn't consider it "rich" anywhere, but it's a pretty solid living), it's not like an extra $0.045 on every dollar is going to keep your kids from eating. Assuming your household income is $300k, you'd pay an extra $2200 in taxes.

If you make $300,000 and $2200 one way or the other is going to significantly change your life, you're doing something wrong.

[miir]

It's about 1900 sq feet built in the 1920's. 3 bedrooms, 1 1/2 baths, no central air. Finished basement and a deck on a lot size of 50x100 feet. I pay over 12k in property taxes and my house, as humble as it sounds, is worth nearly three quarter of a million dollars.

Very similar to what we have. Also built in the 20s, 1700 sq ft Semi on a 24x100 lot, the place is worth about 600k. If it was on a 50x100 lot we could easily get a million for it. L.ike you, we also drive a practical car...
Your property taxes are considerably higher than our but our income is nearly 100k less than yours.

Man, if we had an extra 100k....

[Winnow]

What's with these houses built in the 20s? Head out southwest! There weren't any houses here in the 20's! You're guaranteed to get a newer home!

[miir]

Our place is craftsman (arts and crafts) style and there is so much character in the details.

From the built-ins, stained glass, crown molding, french doors with beveled glass, original hardwood floors, all the original (and unpainted!) woodwork and the gingerbread exterior accents... I don't think I would enjoy a new home half as much.

[Chidoro]

But the point is that what Obama (Dems, whatever) had proposed was that the cuts would expire for people making over $250k. That first $250k wouldn't have changed one cent. So while $250,001 might not make you "rich" in your area (I wouldn't consider it "rich" anywhere, but it's a pretty solid living), it's not like an extra $0.045 on every dollar is going to keep your kids from eating. Assuming your household income is $300k, you'd pay an extra $2200 in taxes.

If you make $300,000 and $2200 one way or the other is going to significantly change your life, you're doing something wrong.

If it expired the whole amount would have been taxed at the new rate. If the increase was just the money on top of that bracket basement, it wouldn't effect me much, but the whole amount being taxed at the new rate was what was going to happen. That's a pretty big difference.

Very similar to what we have. Also built in the 20s, 1700 sq ft Semi on a 24x100 lot, the place is worth about 600k. If it was on a 50x100 lot we could easily get a million for it. L.ike you, we also drive a practical car...
Your property taxes are considerably higher than our but our income is nearly 100k less than yours.

Man, if we had an extra 100k....

Well, it wouldn't be 100k more, it'd be 60.4 more after the federal. Then you got SS, then state, then town, then tax what is left over if you spend it, and tax if you get any interest on it. There's like a 50% death tax. At least you think you're getting something for your taxes in Canada. Sometimes I get charged for stuff that's supposed to be included in my taxes. I now have to pay an additional extra $700 a year for
sewers. Toll booths for the roads that were to be temporary after they were paid for? Nope, still there even though they've been paid for 50 times over. And you know it's because they are pissing away the money

[miir]

We also have more than our fair share of ridiculous charges on top of all the taxes we pay.

Well, it wouldn't be 100k more, it'd be 60.4 more after the federal.

Isn't your tax bracket around 33%?
250k in Canada would be taxed nearly 40%

[Gonzoie - Luclin]

If you make 250k a year, you would have been taxed an extra $1400 in total by the end of the year. That in no way should have an impact on you are you are living above your means. This goes for everyone that would have had a tax increase. No one would have been taxed hard enough that it would have made a difference to them if they are living inside their means.

[Aabidano]

Termites have eaten nearly all the houses around here from the 20s, except those made from Dade County Pine (extinct, bugs won't eat it).

We missed the window to get one by about 6 months, prices suddenly jumped through the roof in those neighborhoods in late '99 when we were house shopping

I pay 7% sales tax, federal tax and ~$3k\yr in property tax. That's it. Canadians pay my income tax. canucks.

[Chidoro]

We also have more than our fair share of ridiculous charges on top of all the taxes we pay.

Well, it wouldn't be 100k more, it'd be 60.4 more after the federal.

Isn't your tax bracket around 33%?
250k in Canada would be taxed nearly 40%

If it moved you to the 250k+ bracket and the cuts expired, your tax rate would be 39.6%.

[Chidoro]

If you make 250k a year, you would have been taxed an extra $1400 in total by the end of the year. That in no way should have an impact on you are you are living above your means. This goes for everyone that would have had a tax increase. No one would have been taxed hard enough that it would have made a difference to them if they are living inside their means.

If the tax cuts expired, a household earning 205k would have been taxed around an additional $11,500.
Thanks for telling me what living within means is all about. I had no idea. What a novel concept.
Maybe you should provide that sage advise to all of the folks in gov't that are pissing it away.

[Sylvus]

If you make 250k a year, you would have been taxed an extra $1400 in total by the end of the year. That in no way should have an impact on you are you are living above your means. This goes for everyone that would have had a tax increase. No one would have been taxed hard enough that it would have made a difference to them if they are living inside their means.

If the tax cuts expired, a household earning 205k would have been taxed around an additional $11,500.
Thanks for telling me what living within means is all about. I had no idea. What a novel concept.
Maybe you should provide that sage advise to all of the folks in gov't that are pissing it away.

Where does your $11,500 figure come from? You're using marginal tax rates rather than just multiplying the whole $250k by 0.046, right? Assuming that Federal Income Tax actually worked that way (with your bracket being on your whole income, rather than just on the number of dollars you made over the ceiling of the next lowest bracket), your $11,500 figure would only be true if the cuts were allowed to expire entirely. I don't think there was a proposal on the table that suggested we should just outright revert to the tax brackets from 2000.

No idea anything about this organization (I found this via a google search), but here is a calculator for reference: http://www.mytaxburden.org/

I would guess that most people who are so up-in-arms about the Bush Tax Cuts "expiring" are either misinformed about what that meant or are just folk who don't think they should have to pay any taxes. Obama's plan always dealt only with the marginal tax rate on income over $250k.

Under this new plan that came out this week, I stand to actually gain a couple grand next year over what I made this year. That's not very fiscally responsible.

[Zaelath]

Might wanna check your maths there, that would be a 5.6% increase from $1 - $205,000

Which doesn't really gel with tax cuts that were at most 2% up to $155,000

BTW, if you're earning more than $250k, you're well rich. I don't care how much your "cost of living" is.

[Chidoro]

meh

[Chidoro]

I would guess that most people who are so up-in-arms about the Bush Tax Cuts "expiring" are either misinformed about what that meant or are just folk who don't think they should have to pay any taxes.

or believe we pay enough in taxes already. I would still be having a negative effect if they had expired.

BTW, if you're earning more than $250k, you're well rich. I don't care how much your "cost of living" is.

If your household is earning more than 250k, where you live makes a massive difference. Omitting regional factors is foolish. So I don't particularly care that you think it's rich.

[Sylvus]

I would guess that most people who are so up-in-arms about the Bush Tax Cuts "expiring" are either misinformed about what that meant or are just folk who don't think they should have to pay any taxes.

or believe we pay enough in taxes already. I would still be having a negative effect if they had expired.

Rich or not, you must understand that you are in the upper echelon of household incomes in this country. The "most people" that I was speaking of above are the vast majority of people against allowing the tax cuts to expire who would have been in no way affected by it, but have been misinformed into thinking they would have. The Republicans sure are good at convincing average-income people to keep them rich. (Disclaimer: If you're "wealthy", I can totally understand being a Republican)

I would agree that since it will have a negative income on your family's bottom line, you have a legitimate gripe. Although it sounds like even you may have been a tad misinformed about just how negative it is.

I'm not trying to be a dick or anything, I just get frustrated at the misinformation that people so readily consume. Just venting here, nothing personal.

[miir]

I'm shocked at how civil you douchebags are acting in this thread!

[Boogahz]

Fuck off canadian! What the hell makes you can come in here and talk shit in a USAmerican tax thread! Until you pay our taxes, you can't bring that stinky ass South of the border!