Let the tax cuts go and you actually stick it to the top for real.
By: Daniel Becker (DOLB)
On Countdown (12/9/10), Keith had on Thomas Buffenbarger, president of the International Machinist Union. It was a chance for an “I told you so moment”in that Mr. Buffenbarger noted while campaigning for Secretary Clinton that President Obama would not be a fighter. Go watch the episode.
I made my position on of Obama clear after the 60 Minutes interview. Mr. Buffenbarger’s comments only reinforces my position as to understanding President Obama as does Obama’s latest “negotiation”. Surprisingly, only 4 comments were made. Too bad, the nation would have been more prepared for this latest act in “Obama the Negotiator. Not!”
But, that is not what got me regarding Mr. Buffenbarger’s interview. No. It was that he confirmed something I have been thinking since Obama stated his compromise policy after this current midterm elections.
…when Bush put the tax cut’s in place, very few of the members I’m privileged to represent noticed any difference in their pay check. And so, if the tax cuts were to go away, and we go back to the tax rates of then, our members would see very little change in their tax rates again.
More to the point of this post. Look at the “Average yearly tax savings” line for those from the lowest to the $383K level. I realize everyone’s situation is unique, but really, the range of the cost of the loss of the tax savings is virtually zero to 2.5% if your at $160K or 1% for those at $383k. As a share of supporting this nation, you/we have been screwed. I ask you all. The bottom 99%. Wouldn’t you like to really stick it to the economic royalty in this nation? Is 1% to 2.5% to much to give to finally get reality into the income tax?
You there in the 95 to 99% category. Your 2001 share of income was 15%. Your projected share of the taxes in 2015 is 18.5% A ratio of 0.81. For your senior income family members the ratio in 2015 is 0.74. Still feeling loved?
Look at it this way. Based on this 2005 chart. The bottom 99% paid 75.3% of all income taxes before the tax cuts. Our projected share for 2015, the very tax cuts Obama et al have just negotiated to keep is 77.1%.
Who loves you now, baby?
Mr. Buffenbarger ended noting that his members understand that paying taxes is a privilege and is an act of support of our country. It is paying our way. So what do you say. Let’s show those at the very top just how unpatriotic they are. Let the tax cuts go and stand proud because honest American justice has prevailed. You just screwed the biggest screwer of them all…The American Economic Royalty.
That is what the real Tea Party was about.
Well, I think it’s political, no? First, there is a matter of one very large promise that nearly everyone in this country heard during the campaign and almost daily since then–i.e., not to raise income tax rates for people earning under $200/$250K. You can argue that this was foolish, but today this is a promise that he seems to believe must be kept for political reasons at least. The outcry if he breaks this promise probably would be loud and long, even if not justified for reasons that you cite so well. And the tea party will yell the loudest and longest. No charts and graphs or appeals to patriotism would protect him–if he breaks the promise, he will be charged with being dishonest with the American people for the past two years.
Furthermore, he probably believes, based on what his advisors say, that keeping this promise also is a positive for economic (stimulus) reasons. I would disagree with them if some other, more effective economic stimulus was politically feasible, but I doubt that this is the case.
PJR continues the republican habits of calling letting tax cuts expire “raising taxes” and refers explicitly to tax rates for people earning under $250K rather than income under $250K.
Obama has broken so many promises I don’t see why this one is sacrosanct. Certainly I’d love to see Obama put his original promise in writing and stick to it rather than negotiating backroom deals apparently no one considers binding except Democratic stooges. It is the House of Representatives which is supposed to initiate all revenue bills, and they have, and Obama could have and should have said nothing. They passed what he originally promised.
But Obama did say something, HE broke his promise by including income above $250K, Estates between $1M and $5M and reducing the Estate tax rate, etc., etc.
So as far as I’m concerned, that’s the end of believing in anything Obama says, or even caring about it.
I’m fine with letting all the tax cuts expire, and now that looks like the only chink that can be cut in the plutocracy for the forseeable future. We don’t even have to win, just hold the line like Republicans are always doing. Losing this one won’t make any of the following fights any easier. Loss on this will embolden the incoming republicans even more. With cloture, we could hold the line until 2012. If cloture goes, that would be a major victory anyway.
OT this is hilarious
http://www.msnbc.msn.com/id/3036677/ns/msnbc_tv-countdown_with_keith_olbermann/#40578410
Has not the argument been that the cuts did little for the middle class?
The problem is everybody adjusted their spending — especially housing outgoes — to the new disposable incomes given by the 2001-2003 cuts.
The top 2% could care less about the 3.6% addition, but the $1000 child tax credit is a big deal for millions of families.
The Senate Republicans were clever in catching Obama in a trap of two conflicting campaign promises — being able to block the 98% tax cut by insisting on the 2% tax cut.
Damned if he knuckled under and double damned if he didn’t.
I don’t know why everyone waited until the last goddamn week to fix this. 2010-2015 rates shoulda been in place a year ago.
Borrowing money and paying interest to people who should have done their patriotic duty and paid taxes is immoral and dumb. See reagan and W Bush.
Sovereign wealth purchasers of T-Bills should have paid tariffs. Wealthy who invest the money that is needed to pay outlays for government should be taxed.
And why is a dollar earned by labor more taxed than a dollar skimmed dealing on the too big to fail “markets”?
Shift the burden of funding the preservation of wealth from labor to capital.
Everything in side the I395 loop is suspect.
ilsm,
“Sovereign wealth purchasers of T-Bills should have paid tariffs.” ???
Here are some key paragraphs from an article by Michael Hudson:
“China already is seeking to buy mineral, fuel and agricultural resources abroad to supply the inputs that it needs for its own growth. But these efforts still leave substantial foreign exchange surpluses. Most countries have used these surpluses to buy up key sectors of foreign economies. This is what Britain, the United States and France have done for more than a century.”
“When the US economy runs payments surpluses with foreign countries, it insists that they pay for their foreign debts and ongoing trade deficits by opening up their markets and “restore balance” by selling their key public infrastructure, industries, mineral rights and commanding heights to US investors. But the US Government has blocked foreign countries from doing the same with the United States. This asymmetry has been a major factor causing the inequality between high US private-sector returns and low foreign official returns on their dollar holdings.”
“The refusal of the US Government to behave symmetrically by not letting China buy key US companies with the dollar inflows that enter China to buy its own companies, above all its financial and banking sector, is largely responsible for the asymmetrical situation noted above, in which US investors earn 20% in China, but China earns only 1% in the US.”
http://michael-hudson.com/2010/07/dollar-hegemony-and-the-rise-of-china/
Americans are soon to realize how much they depend on foreign inflows and the dollar recycling that follows. Think of a very large parasite without a host. But of course the foreign inflows overloaded the parasite and played a central role in causing the infamous bubbles, so eventually the loss of this dependency may be a good thing.
The problem is everybody adjusted their spending — especially housing outgoes — to the new disposable incomes given by the 2001-2003 cuts.
Absolutely. My annual $1063 opened up whole new realms of previously unimagined consumerism.
Cheers!
JzB
“My fellow Americans, the smart people I rely upon for economic advice tell me that it is not wise to raise taxes at a time of economic uncertainty. Well, I appreciate their advice, but it doesn’t square with our recent experience and I don’t think that sentiment is the best that we can do. Let me explain.
In 1945, American’s returned victorious from the world’s largest and most devastating war. Fear spread that the returning soldiers would come home to the high unemployment the nation suffered throughout the prior decade. If ever there was a time to cut taxes even if it meant passing a massive deficit to the next generation, that was the time. After all, didn’t the Greatest Generation just save the world from tyranny? Didn’t they just leave the next generation an opportunity to prosper? Wouldn’t it have been entirely moral for our fathers and mothers to have cut their tax burden for a well-deserved break?
Of course it would have. But they didn’t. For our fathers and mothers who had just sacrificed so much to defeat forces of tyranny, never even considered passing on the nation’s war debt to the next generation. Instead, under Democrat and Republican administrations alike, they raised the marginal tax rate to 91%. Yes, you heard that correctly: 91%. And, by the way, that was the marginal tax rate under a Republican, President Eisenhower. Oh, and they also sent men to the moon, built a national highway system, and lent millions of dollars — a lot of money in those days — to rebuild Europe and help create stable democratic socities there that survive to this day.
Today, we find ourselves, as we did 70 years ago, fighting on two fronts. As in WWII, we have been paying for this war with debt, not taxes. But unlike WWII, we have not asked for any sacrifice from Americans other than the ultimate sacrifice we have demanded of our volunteer miltary. These are the circumstances we find ourselves in at the end of 2010, the time that a Republican President and a Republican Congress elected to raise taxes.
The simple question before us is whether we should let those tax cuts expire, as the law requires, or pass a new law to extend some or all of them for some additional period of time. If we let the cuts expire, tax rates will return to the rates in effect under President Clinton. The highest rate will be 39.6% instead of 35%, and the capital gains rate will be 28% instead of 20%.
Let’s review a little history. As I said, the top rate under Eisenhower was 91%. Under Kennedy it was 50%. Under Reagan is was 50% in his first term, 28% in his second. Under Clinton it went up to 35%, then 39.6% to balance the budget, which occurred in his last year in office. The Bush tax cuts lowered the rate again to 35%. So the issue that is causing so much consternation and debate is this: shoud the wealthiest among us — the top 2% of our country’s citizens — pay an extra 4.6% of their income to help pay for the last eight years of war and the costs of digging ourselves out of the largest economic crisis since the Great Depression?
I’ve made my position clear. During my campaign and since my election, I have repeatedly called on Americans to help me change the way things work in Washington. I am asking for your help again tonight. Powerful, self-interested Americans are trying to claim that paying an extra 4.6% of their income will have terrible economic consequences. Many of these people have the good fortune of spreading this message through their own radio programs. People such as Rush Limbaugh, Glenn Beck, Sarah Palin — they are all millionaires who stand to gain hundreds of thousands of dollars each if they can convince the other 98% of Americans — most of the people listening to me at this moment — to […]
pjr
that is at least “colorable.” what is not colorable is the payroll tax holiday. that is simply selling out Social Security to those who want to destroy it.
i think letting all the tax cuts expire is the right policy, but if, as you say, the idiots who vote in this country would feel betrayed, or if, as you say, it would really make the recession worse (i don’t think it would) then let it go and hold on for the ride.
But the payroll tax holiday is damn foolishness.
at the end of the day the American people are going to have to realize they have to pay for what they are buying, or at least for what they have bought.
it’s the something for nothing mentality that has brought us all this trouble.
As long as “sticking it to the rich” is the motivator for policy, we are not going to solve the problem. the rich do need to pay their share… which they are not now doing. but neither are the rest of us.
and yes, i can always find a justification for a tax cut that helps my particular situation.
and while i’m at it, comparing percent of total taxes paid to percent of total income is a brain damaged way of looking at it.
decide what you need government to do. figure the cost. pay for it with a graduated income tax… including all income. if the people can’t afford it, refigure what you need the government to do.
stop fooling yourself with games about fine tooning the economy, or making taxes “fair,” that game quickly becomes an exercise in perverse rationalization and the danger is that after awhile we start believing ourselves.
and let the goddam rich enjoy the fruits of their labor, or theft, or whatever, after they have paid a reasonable tax to keep the country going. it doesn’t do us any good morally or politically to think in terms of sticking it to the rich.
Yes, Coberly it should be as such: decide what you need government to do. figure the cost. pay for it with a graduated income tax… including all income.
The problem is: after they have paid a reasonable tax
That word “reasonable”.
As to “stick it to the rich”. I would agree except for the fact that “sticking it” seems to be the MO of the top. It is also, in this age of emotional driving decision making a tool to be used by those who want to: decide what you need government to do. figure the cost. pay for it with a graduated income tax… including all income.
The other totally lost issue in all of this relates to my original series looking at the purpose of taxation: equity of power. The prime intent of our Constitution.
For now, I’ll settle for motivating people emotionally to finally looking at the screwing they got in hopes of a better voting decision at the polls.
MG, try this editorial. WSJ, Hostage Fakers here: http://online.wsj.com/article/SB10001424052748703766704576009684148164872.html?mod=rss_opinion_main
A lot of the new people in Congress think the govt is too big. Too much HCR, Medicare, SS, foreign aid, and stuff to undeserving people. Well, how big should the US govt be to provide for the common welfare and defense of 330 or so million people? Common sense will tell you that many people generate a whole lot of problems govt is designed to solve or at least mitigate. It shouldn’t come from the govt, they say. People should take care of themselves. With what for jobs, Congress? With what for secure 401k’s, market investments, real estate values and access to credit? Taxes are the least of it. Letting them lapse proves that laws work as written and lapse when they’re supposed to. When it comes to foolish laws, that’s good, not bad. Which brings us back to jobs. Much more important. NancyO
Interesting day he chose to give up the country to the 2%. There was an old Fireside Theater album–yes album, it is that old–where in the midst of Nick Danger, there is address by FDR announcing that the Japan had attacked Pearl Harbor and that after conferring with Congress the U.S. had unconditionally surrendered. That is exactly what McConnell’s boy did on December7, 2010, a day which will continue to live in infamy. I only wish it was a spoof.
The house is now trying to toss in all the other lame brain tax breaks like ethanol.
Bad ideas never go away.
Better sooner than later.
Divorced
fair enough. but after you have emotionally motivated your base, watch out for the emotionally motivated other guys.
well here is a funny take.
if you pay with a cash card or a credit card you are paying an extra 2%… no, the merchant is not paying it. you are paying it.
why is it so much easier to give 2% of your income to a bank than it is to give it to the government?
the fact is that people are fools. they cannot even think in terms of numerical size or reasonable proportions. we have well meaning people running around the country wanting to force granny to work into deep old age to save her twenty cents a week. because you see a tax increase is a TAX!
and some old lady working after her knees and back have given out… well, hell, that can’t happen to me. so it isn’t real.
Nationalize Mastercard!
Coberly, I agree that the payroll tax holiday was a bad idea. And now we’re probably stuck with doing it again next year. And I have no reason to think Obama currently has a “plan” for what to do for his FY 2013 budget (that is, what election year promises he will make). I can come up with scenarios and ideas, but not my job.
I do think he has been politically “stuck” with not allowing Bush’s tax rates for the under $200/250K crowd to expire. It’s a promise that he’s repeated ten thousand times. (I’d bet everyone who works for him knows not to suggest breaking it.) I also think he’s “fine” with this, as foolish as that probably is.
No, we don’t need to go so far as to Nationalize Mastercard! Walmart just kicked in with United Health Care to offer a new Part D Medicare prescription medication plan–low premiums and practically nonexistent copays. Let Walmart do Medicare, banking, finance AND credit cards too. After all, if big govt is Eveeeellll, then the logical solution is to turn everything over to the private sector. Walmart is the biggest business on earth, and therefore the best. The govt can collect the taxes, turn it all over to Walmart, and Voilsa! No more problems with big govt. Our only problem would be big business and we have nothing to fear from them, right? /snark/ NancyO
“if you pay with a cash card or a credit card you are paying an extra 2%… no, the merchant is not paying it. you are paying it
Yes and no. The merchant that accepts credit cards has adjusted all of his prices to account for the 2%-3% vig that it is gooing to cost for the “service.” The extra cost is already built in so that if you’re paying cash you’re still paying the extra cost of the merchant’s credit card acceptance service. The purcahser’s only recourse, and its not all that good, is to use one of the cares that payes back a small percentage to the card user which ranges from 1% to 5% depending on the purchase and the card comp program. Be sure to pay the bill in full each month so to avoid the usurious interest charges.
From the WSJ link that CoRev provides, above:
“As for Republicans, they have already given up an enormous amount to get what is essentially the status quo on tax policy. They get a two-year reprieve against tax increases on capital and income, and two years of death taxes at 35% instead of 55%. This spares the economy from immediate tax harm while it is still emerging from recession, but this deal is nothing close to a genuine pro-growth, supply-side tax policy. “
It’s always good to see a totally misleading description appear in the WSJ and be referenced on this site. Republicans have given up nothing given that the Bush tax “cuts” (for the very weathiest mostly) were intended and sold to the public as a temporary mechanism to boost the economy. Boost it with a swift kick down hill that is. Boost the asset holdiing of those wealthiest Americans is about all it has done. But still the WSJ, and its groveling naives, still want to sell the expiration as a tax increase. Worse yet they’re still peddling that supply side bull shit as pro-growth. Pro the growth of the very wealthiest tax payers that is, who don’t pay all that much tax to begin with. Most unpatriotic is that group.
Yet another bit of bull from that same WSJ editorial that CoRev has dire3cted us to:
“Republicans would be fools to give Democrats a single new concession, even a token one. They certainly shouldn’t let Mrs. Pelosi think she can get away with such blackmail in the next Congress.”
George Orwell would be proud of that little piece of language reversal. The public would be the fools to believe such a revisionist view of reality. If the Democrats didn’t see the usefulness of squashing the fillibuster rules when they first took the lead in the Senate they should better appreciate the error of their way now. And lets not forget the howling Republicans in the Senate who just a few years ago were screaming fillibuster fowl at the top of their lungs.
Yet another bit of bull from that same WSJ editorial that CoRev has directed us to:
“Republicans would be fools to give Democrats a single new concession, even a token one. They certainly shouldn’t let Mrs. Pelosi think she can get away with such blackmail in the next Congress.”
George Orwell would be proud of that little piece of language reversal. The public would be the fools to believe such a revisionist view of reality. If the Democrats didn’t see the usefulness of squashing the fillibuster rules when they first took the lead in the Senate they should better appreciate the error of their way now. And lets not forget the howling Republicans in the Senate who just a few years ago were screaming fillibuster foul at the top of their lungs.
This is the person I thought I was voting for, yes.
However we did let the Republicans take 5 million Americans hostage.
FOX does really have a large thumb on the scales of justice now, due to its sizable audience and the associated agitprop and policy mills feeding it.
The Boosh tax cuts were first sold to give the surplus back to the taxpayers. They were accelerated in 2003 for stimulus purposes.
The minority leader can’t do s— in the House, no?
Its actually not quite that simple as handling cash has costs as well. For example you need security, time not interacting with the customer has to be spent counting the cash, errors are made in making change, costs of getting the money to the bank (even if the bank does it it is included in the fees the bank charges the merchant) etc. Today a swipe and there is no handling required by the merchant, and if set up right the merchants account is credited. Compared to the old days of maintaining accounts (recall the days of store cards and the like) the credit card is cheap for the merchant.
divorced
btw
my opinions are my own. don’t take them personally even if i express them personally. i can only tell you what i think, i can’t say anything about your worth as a person. even i know that.
jack and lyle
all good thoughts, but my point was simply that we pay 2% to the bank with hardly a thought, but if we ask for 2% to pay for your own retirement, all of a sudden its an insurmountable political hurdle. because of course the convenience of not having to pay cash is worth more than retirement security.
Does the middle class need jobs? If so they benefitted greatly from the Bush tax cuts. Right after these were put in place in 2003 the economy did very well for years. this reminds me of an article “Bush Tax Cuts Caused the Recession?” on http://www.freemarketsfreepeople.net.
I do not in any way disagree with the intention of your statement. I have freq1uently pointed out that the average American is a first class moron. Look at the choices that they make at each election. Look at the success of Fox News, Glenn Beck, Sarah Palin, Rush etc, etc. Low brow is high camp and pays very well.
Tergent,
The “economy did very well” is certainly no evidence that the Bush tax cuts were a significant inluencing factor in that process. The economy has so many interacting factors playing a role that no one can be said to be a cause of its over all behavior. If that picture next to your name is Alexander Hamilton, which it looks like, I’ll remind you that he was our country’s first and most ardent tax collector. He married well and enjoyed having done so, but he worked hard as any attorney and was certainly not a toady to the weathier members of his society. Unfortunately he was a bit hot headed and it cost him his life.
Jack
you might be interested in Burr, Hamilton, and Jefferson: A Study in Character by Roger G Kennedy.
some people don’t care for the book. i thought it made a better story than the standard “evil Burr” that seems to be the official history. If true it sounds more like Hamilton got carried away with smearing his rivals and couldn’t back down from Burr’s challenge. It may have been Burr that got hot headed at last. And messed up his life.
Did anyone hear President Clinton at the White House press conference Friday afternoon? He talked for about half an hour.
She won’t be flying to and from California in government anymore. And the limo is gone…
I supposed we could that Pelosi is downsizing.
She won’t be flying to and from California in government jets anymore. And the limo is gone… Pelosi is downsizing.
Cedric – “The house is now trying to toss in all the other lame brain tax breaks like ethanol.“
That was rich, wasn’t it? The U.S. House is out of control. FUBAR.
It’s deja vu all over again.
I, and I’m sure most of you, saw Clinton (the DLC champion who never saw a give away to wealth that he didn’t love) spoke in support of Obama’s “compromise” with the Republicans. He didn’t put it quite that way having focused on the stimulus effect, By the way he looked really tired and worn out. So too did his speaking voice not have the old strength that was part of his effectiveness. maybe they were water boarding him in order to get him to join the band wagon. Oh wait, I forgot, he’s become a very wealthy man and he undoubtedly eh now appreciates the value of a tax cut that he benefits from. how are the Obama book sales figures?