Extend the Obama Tax Cuts
Robert Waldmann
Majority Whip James E Clyburn proposed extending the Obama tax cuts. Some assert that he means the Bush tax cuts on income under $250,000. I sure hope he means that Obama tax cuts.
I have been arguing for some time that the Democrats should propose permenent extension of the Bush cuts on income under $250,000 (which implies tax cuts of around $6,000 next year for each rich family) and additional temporary tax cuts which equal for everyone (I like $500 per family). But now I think that it would be better politics to propose making Bush tax cuts on family income under $250,000 permanent and extending the Obama tax cuts one year (that is 400 per individual taxpayer or $800 per family for all but the richest few percent of working families).
Like the Bush tax cuts, the Obama tax cuts are scheduled to expire (the cuts apply to 2009 and 2010 income and were enacted as part of the stimulus bill).
A key advantage of such a debate for the Democrats is that it would force Republicans to admit and journalists to report that there are Obama tax cuts that might be extended. In the last poll only 8% of US adults knew that Obama and the Democrats have cut taxes for most US families.
I think the assumption that Clyburn must have been talking about the Bush tax cuts has something to do with the fact that even political junkies overlook the Obama tax cuts.
Finally, of course, temporary tax cuts for the non rich are a better stimulus than temporary tax cuts for the rich.
Now I wonder does House Majority Whip James E. Clyburn agree with me ? Did he mean what he said. His web page is no help.
The answer is (no surprise) on Talking Points Memo
“As the whip, I have been counting votes for President Barack Obama’s tax cut,” Clyburn said. “And I like the votes that are there for an extension of President Obama’s tax cuts. You may recall that all the American people–95 percent of the American people got a tax cut–in our legislation, that we call the recovery package. And what we’re trying to do is extend that.”
He quite definitely means the Obama tax cuts when he says “the Obama tax cuts.”
You didn’t ask, but I think
that anyone who calls for a Deficit Commission that screams that the Deficit is Killing Us and then turns around and cuts taxes is not playing with a full deck. or an honest deck.
oh, wait, i forgot, the tax cuts are going to stimulate the economy and pay for themselves. how could i forget that when i’ve been hearing it for so many years?
cedric
please. give us a paragraph to make us think its worth chasing the link.
I couldn’t think of a way to summarize it. It’s about high finance, which means we aren’t supposed to understand it….
I wonder who your are cricizing. It is true that Obama set up a deficit commission and is proposing tax cuts. I can argue that deficits next year are good while deficits when we are no longer in a liquidity trap will be bad, so Obama is right both times. However, I admit, he decided to follow the polls and not to lead when he set up the commission. Even smart politicians let politics over rule facts sometimes.
Of course I agree that the Republicans are dealing from the bottom of an unfull deck.
Robert
i assume you are addressing me. I am criticizing mostly Obama who doesn’t seem to know what he is doing. Not much point in criticizing the Republicans who do what Republicans do in all seasons. And of course I am criticising you, because calling for tax cuts now for your favorite income group just smells like what the Republicans do.
I have paid taxes all my life usually without even noticing except for the aggravation of actually filing the damn thing and feeling ill used by all the cute turns in the law that just miss giving me more of my money back. I am reasonably sure no one would notice a 1 to 3 percent increase in taxes now for the patriotic purpose of lowering the Debt… if the increase was straight forward, modestly progressive, and free of loopholes and games and special favors. And I don’t think it would affect the economy except for the good… in any case, just like Greenspan, I’d say its a risk we need to take and can easily fix if it turns out to be wrong. But just one more tax cut and then i’ll quit is the reasoning of an addict.
Manipulating the tax codes is, and has always been, an ass backwards way of trying to effect some aspect of the economy. The reason to collect taxes is to pay for the operation of the government. Taxation is not for the purpose of effecting economic circumstances. Any modifications or manipulations of the tax codes should be for the purpose of creating a fair process of raising government revenue. In the same vane the budg et can be better balanced by controlling real waste in government spending rather than squelching government effectiveness in those areas that require government intervention.
Improving the economy requires dealling directly with what ailes the economy. Put more people to work and pay those that are working a living wage that allows them to spend money, pay their taxes and maybe save a little money. More jobs are the result of working people having more to spend. Related to that is the production of goods within our economy.
No manufacturing base is the equivalent of high unemployment. It isn’t that complicated. Americans can produce goods that have value. Anyone can produce cheap goods. Until corporate America begins to understand, and maybe they need to be required to do so, that their business success is dependent upon American workers having good wages which they can use to pay their taxes and buy goods and services. Out sourcing is a major problem for America. More jobs will fix the budget, keep social security on a pay as you go basis and solvent, and more savings. Tax manipulations are only a means for avoiding the difficult process of restoring jobs to Americans.
Dear Coberly
I was replying to you. Analogies are risky things. The US economy is in an unusual condition (safe short term interest rates essentially zero and unemployment almost 10%). That makes the effects of tax cuts now different from the effect of tax cuts later.
Basing economic policy on what sounds like the reasoning of the successful and unsuccessful in private life (addicts being very unsuccessful) can lead to extremely bad outcomes.
Chancellor Brunning Godwin’s law Godwin’s law Godwin’s law.
I think it is hard to argue that the case for stimulus is so much weaker than it was in 2009 that a new stimulus which is small compared to the original stimulus (the tax cut part included the AMT fix).
Certainly people don’t notice a small cut in their taxes. This is not a theoretical claim. It is a fact. 92% of Americans didn’t notice Obama’s tax cuts and the vast majority of them received those tax cuts. But people do notice political debates about tax cuts. There is no sign that many people are willing to vote for a party which supports tax cuts for the rich instead of tax cuts for them. I’d say rather than guessing about public opinion one should ask the public. Polls are imperfect but they are better than your intuition.
Your criticism doesn’t apply to me, as i never said that the 2009 deficit or 2010 or 2011 forecast deficits were too high or even high enough.
I think your criticism of Obama is overstated. IIRC He didn’t use the inflamatory language you used when discussing deficits. The committee is supposted to addred the long term. The long term is really this time genuinely authentically totally different from the short term. Even if addicts say it, it is sometimes true. Stopped clock and all that.
Waldmann
we don’t seem to be talking about the same reality. The Deficit Commission is saying the Deficit is so bad, so bad, we gotta make granny work until she can’t walk. Alan Greenspan is saying the Deficit is so bad we need to raise taxes. Every politician in the country is saying the deficit is so bad we gotta elect them and their terrible swift deficit cutting sword. But give me a tax cut.
As for asking the people what they want…. give me a break. Are these the same people I listen to every day. They aren’t real smart, you know, but they know what they like. You could raise their taxes 3% and call it a cut and they’d never know the difference.