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Tag Archives: Tax

Bill Clinton Says No Tax Increases Now; Dems Want Supercommittee to Spend, Not Slash

Recently, former president Bill Clinton was on with David Letterman.  Though many in his party are pushing for higher taxes, Clinton advocates a different approach:

“Should you raise taxes on anybody right today — rich or poor or middle class? No, because there’s no growth in the economy,” Clinton said on the “Late Show.” “Should those of us who make more money and are in better position to contribute to America’s public needs and getting this deficit under control pay a higher tax rate when the economy recovers? Yes, that’s what I think.”

He also mentions that there should be no spending cuts right now, either. Seems he is directly opposite of other party members.

Remember the supercommittee that is supposed to find a way to cut a couple trillion dollars from the deficit over the next decade? Well, Democrats are already lobbying for both tax increases AND more spending:

For instance, Democrats on the House Transportation and Infrastructure Committee want the supercommittee to find ways to pay for a six-year surface transportation funding bill at a cost of $500 billion, which they said would create or save 6 million jobs.

Rather than cut, House Democrats want the supercommittee to collect more money — whether from the pharmaceutical industry, in the form of lower drug prices, or from government health care programs by weeding out inefficient and misguided payments.

And of course, there is the constant cry about tax breaks for oil companies–tax breaks that all businesses get–which would produce $43 billion.

I suspect that the supercommittee will fail and that the automatic triggers built in will be activated. Then things will really get interesting.

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What’s More Important–Jumpstarting the Economy, or Raising Taxes on the Rich?

Republican presidential candidate Herman Cain is advocating a plan to overhaul the current tax structure in order to jumpstart the economy.  You can read the details at his website http://www.hermancain.com/999plan.  In a nutshell, his 9-9-9 plan would lower corporate taxes to 9%, personal income taxes to 9%, and introduce a 9% consumption tax.  Loopholes and deductions (with the exception of charity) would go away, as would the inheritance tax and capital gains taxes.  Businesses would save billions in tax compliance costs, and individuals would have more to spend, since it also eliminates payroll taxes.

I see two problems that stand in the way of such a change being passed.

First, politicians would probably balk.  For the plan to be effective, the constitution would need to be amended to prevent politicians from enacting other taxes on top of the 9-9-9 plan.  But we know how politicians are.  They like to provide favors for the donors.  So not being able to provide tax breaks for their favorite people or companies wouldn’t fly.

Second, Democrats wouldn’t go for it either.  Simply put, regardless of whether or not the plan would help the economy, their complaint would be that the rich weren’t paying enough.  Need proof?  In an exchange between Cain and the talking heads from MSNBCRachel Maddow, Al Sharpton, Eugene Robinson, Ed Schultz, and that O’Donnell guy, each asked Cain a question.  Of course, the good Rev. Sharpton asked a question racially related, asking if Cain’s talk of states having more control over certain things doesn’t equate to the classic “states rights” debate from the civil war and civil rights eras (thank goodness Cain shot him down quickly).  O’Donnell and Robinson went after him over Social Security–“personalization” vs “privatization.”  But around the 4:30 mark, Shultz plays the class card.  His worry?  That the 9-9-9 plan not only hits the lower class hardest, but that the rich wouldn’t pay their “fair share.”

Well, we know what the real priority is!  (Video can be seen here).

By the way, because reminding folks about it never gets old, a strong argument can be made that high income earners, by virtue of their piece of the tax pie, already pay their fair share, if not more. Here is a piece that breaks down the income tax burden pie in 20% increments.

That Jobs Plan Sounded Good…Then Reality Set In

Last week I listened to the president outline a new plan to help create jobs.  “Pass this bill right away!” the president implored.  Initially, I was right on board with what he was saying, and was impressed that instead of the non-stimulating shotgun approach of the first bill, President Obama was firing targeted rifle shots with each line.  Even better, he started off by saying the plan would be paid for.

Then, about 2/3 of the way through, things started going downhill.

First, the president pulled out some of the tried-and-true garbage talking points.  He spoke of removing tax breaks for oil companies (hey, that *could* bring in a whopping $2 billion a year!), of millionaires and billionaires that don’t need tax deductions, and of the rich paying their “fair share” (I’m STILL waiting for specificity on what exactly their “fair share” is).  he even pulled out Warren Buffet’s claim of paying less in taxes than his secretary (I suggest people read up on capital gains taxes vs marginal income taxes to understand why this is bogus).

Second, President Obama punts the responsibility for paying for the bill to the newly-formed supercommittee, who will already have to find a way to cut $1.5 trillion in spending before December.  Seems to me there is a difference between saying something is paid for and saying “well, THEY are going to figure out how to pay for it.”

Then, for the coup de grace, the bill is rolled out on Monday…and its designed to be paid for via tax increases.

Sigh.

Though I don’t support the idea of absolutely no tax increases, the move makes the president look downright indecisive.  Not only that, but he knows that under the current environment, the chances of passing his bill (which came under criticism from all sides shortly after the post-speech euphoria wore off) just went from possible to “snowball’s chance in hades.”  Granted, a bill may get passed, but it definitely won’t fly through paid for just with tax increases.

Random Thoughts: Obama/Boehner Disrupting Prime Time, “Fair Share,” Political Garbage Speak, ect

Just some random thoughts:

Why did the President and the Speaker waste our prime time last night?  President Obama took his time to get in front of the mic and say the same things he has said in his press conferences the past few weeks.  He threw in some statements about negotiations, made some nice statements about Speaker Boehner, and made sure to trot out his tried-and-true, base-energizing catchphrases:  “corporate jet owners;” “millionaires and billionaires;” “breaks we don’t need” (paraphrased).  You pushed back the start of our 8 pm shows for this??  Even worse, I listened to Chris Matthews afterwards and heaven forbid, he said something I agree with; he said usually, Presidents only request prime time to make an announcement or to make news.  This speech was neither and shouldn’t have been done in prime time.  Write it down somewhere–I agreed with Chris Matthews!  Then, House Speaker Boehner jumps up with the canned response.  There are really only two things I pulled out of his speech:  1)he had a couple of zingers at Obama’s expense that were funny, and 2)Republicans are now going to position the President’s stance as wanting a “blank check” since he did not support their Cut, Cap, and Balance bill.  The election may be next year, but the game is already afoot.

Speaking of corporate jets:  First, if the tax break in question was eliminated, it would save a whopping $3 billion.  Over ten years.  Yes, ten.  Trillions in deficits and we’re talking $3 billion.  Second, Obama is responsible for the very tax break he criticizes.  See the stimulus bill for more details.  Third, he has people thinking these “corporate jet owners” are just average wealthy individuals with money to burn.  For the most part, based on the tax break, the owners of corporate jets tend to be…wait for it…CORPORATIONS!!  Way to muddy the issue for duh masses, Mr. President.

Did he really mention Reagan?:  Obama referred to Ronald Reagan in his speech in order to take a swipe at Republicans.  Reagan’s quote somewhat supported what the Left has been saying.  The irony is, I noticed Obama didn’t quote HIMSELF from 2006, when he was talking about how raising the ceiling was a failure in leadership.  Or what about Harry Reid, who  fought against a debt-celing increase that same year and asked  “How can (Repubicans) explain that they think it’s fair to force our children, our grandchildren, our great grandchildren tofinance this debt through higher taxes?”  Now THOSE are quotes that should’ve gotten some airtime.

If all else fails, let’s create some wealth and income envy:  My friends on the left need to own up to this.  Their belief in raising taxes creates a need to make the rest of America mad at the wealthy.  You can hear it when the President speaks of the previously mentioned corporate jet owners.  Or when he talks about tax breaks that high-earners “don’t need.”  You even get it when he speaks of the oil companies.  Lest we forget, Dems want to take a tax break away from the top 5 oil companies, since they are making so much money.  Absurdity, not only because we’re talking about a small amount of money ($21 billion over 10 years), but because it would then be a break that every company in America EXCEPT those 5 oil companies could take advantage of.  But hey, Big Oil is evil and they need to pay up!

Can someone define “fair share?”:  Sometime soon this will get its own post.  I’ve heard my friends and the President refer to fairness in various terms when it comes to taxes.  But I don’t understand what that means, since I’ve never heard it defined.  What is fair?  Based on the proportion of taxes paid, high-income earners pay a ton.  We hear about hedge fund managers paying less than their secretaries, but is it unfair that they take advantage of lawful tax deductions and such?  And do they really pay less than the secretary, or is that just another one of those garbage speak political catchphrases referred to earlier?  I would go with the latter.

President Obama says “Hey! You Don’t Need That Money!”

Yesterday amongst my online pals, I was lamenting a new law that pushes for light bulbs to be more efficient, but in effect ends up pushing the masses to use more efficient but also more expensive and more hazardous CFC bulbs.  The focus of my complain was a statement from Energy Secretary Steven Chu, who said: “We are taking away a choice that continues to let people waste their own money.”  Yes, we the masses would be lost if we didn’t have the government guiding our way.

Now, we have President Obama, who is currently trying to get a deal done to raise the debt limit.  During a press conference, he stated:

I don’t want a deal in which I am able to keep hundreds of thousands of dollars that I don’t need, while a parent struggling to send her kid to college finds they have a couple thousand dollars less in grants and student loans.

For now, let’s move past the second part of the statement, where he invokes the time honored tradition of scare tactics. Let’s talk about the “need.”

On the surface, Mr. Obama is talking about himself not needing a tax break, and not needing money he considers to be extra money.  It’s quite humorous that he states this, since as President, he has everything taken care of.  But let’s go below the surface.  Obviously, his statement implicitly implies that the higher income earners should be happy to pay more in taxes because they don’t “need” the extra money they have in the bank.  Once again, here is the government to our rescue, to guide us!

Hey!  You’ve earned enough money!  It doesn’t matter what your plans are for you money, we the government have decided FOR you that you have more than you need!  Ignore that we are notorious for overspending!  Its your patriotic duty to pay up anytime we feel we need more money!

Oh, and let’s do revisit the second part of the statement, regarding grants and loans. We are in a dire financial situation.  Isn’t it a natural assumption that folks are going to feel the pain? And even if taxes go up, wouldn’t that money go to pay down the debt?  Evidently, even in a situation where cuts should be the priority, and paying down deficit and debt right behind that, the administration will find ways to either increase spending somewhere or attempt to keep things status quo.  Hello!  McFly!  Is that what Joe Public does when he needs to cut spending in his own household?

Just remember:  the government knows what’s best!

When Spending Cuts Aren’t Really Spending Cuts (or, “They Think We’re Stupid”)

In the ongoing battle between the parties to negotiate a debt-limit increase, there has been much talk of spending cuts.  Republicans are strongly taking a stand on cutting spending but no new taxes.  Democrats are open to spending cuts but are looking for ways to increase revenue to increasing taxes or cutting tax breaks.  But people won’t be surprised to know that both sides are choosing not to be up front with we the people.

When we the people look at a budget, we base it on what we have coming in at the time.  We then decide where we will spend those funds.  We won’t get into the notion that if we were out of money and needed more, if we did as the government does sometimes and print our own, we’d be hauled off to jail rather quickly.  In general, most people don’t have the luxury of just going out and getting loan after loan while continuing to spend above their means.

Not so with the government.

I got a call from a good friend of mine who was watching a show on CNBC.  He said a guy was on talking about how spending cuts weren’t spending cuts and how he’d remembered hearing it from me months ago.  You see, the government doesn’t operate the way normal people do.  Matter of fact, the government doesn’t even operate like a good company does.  And here is where they pull the wool over our eyes.  Let me explain using an example.

When Joe Public is doing a budget, he bases it off of how much he has coming in, and how much he as going out.  If he has more going out than coming in, he has no choice but to cut spending.  If he decides that he must make a spending cut, typically its going to result in him spending an amount less than what he is spending now.  So, where he may be spending $1,000 per month now, a budget cut may result in spending $950 per month next year.  That is a budget cut.

Now, the government doesn’t do that.  The government uses a nice little trick called baseline budgeting.  The government has already planned ahead as to what spending increases will be.  For example, while the budget for program A is $1,000 for 2011, they have already planned that in 2012 it will be $1,100, for 2013 it will be $1,200, and so on (sidenote:  the government tends to project increases in terms of percentages.  I’m using real numbers so I don’t have to use a calculator.).  So when there is talk of a spending cut, it is not like Joe Public, who takes his spending below what he was spending before.  Instead the government says, “well, instead of spending $1,100 in 2012, we’ll spend $1,050, and in 2013 we’ll spend $1,100.”  As you can see, overall spending still goes up, just not as fast.

This is why complaints about spending cuts have to be taken with a grain of salt.  Politicians will make things seem like a program is going to die due to budget cuts, but that is making the assumption that the reduced spending increase won’t be enough.  They also assume (correctly) that the majority of the people have no idea of how they are pulling the wool over their eyes.  If there is to be a serious, authentic discussion about spending cuts, then lets see some serious, authentic reductions in actual spending!

White House Disputes the Findings of Their Own Economic Advisors

Earlier I posted about how a group of economists picked by President Obama issued a report that showed the stimulus saved or created 2.4 million jobs at a cost of $278k per job.  Evidently the White House disagrees with those findings:

“That’s a cost to taxpayers of $278,000 per job,” according to the Weekly Standard, a Washington, D.C.-based magazine. “In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the ‘stimulus,’ and taxpayers would have come out $427 billion ahead.”

But the White House said that study is based on “partial information and false analysis.”

“The Recovery Act was more than a measure to create and save jobs; it was also an investment in American infrastructure, education and industries that are critical to America’s long-term success and investment in the economic future of America’s working families,” White House spokeswoman Liz Oxhorn said in a statement to FoxNews.com.

Read more: http://www.foxnews.com/politics/2011/07/05/white-house-disputes-study-saying-stimulus-cost-taxpayers-278000-per-job/#ixzz1RGDNjWuj

The story goes on to say that the WH points at a CBO report that says the number is closer to 3.6 million jobs, that the stimulus lowered unemployment, and helped spark economic growth. Republicans point out that unemployment is higher than it was, in addition to a substantial increase in the national debt. Still another person quoted says that there is no point in measuring effectiveness based on “cost per job.”

Whether or not the stimulus was effective will continue to be debated, it seems.

 

GOP Claims “Reagan Conservatism” but Reagan Would Disagree

I’d written before that if Ronald Reagan ran for president, he wouldn’t make it our of the Republican primaries these days. Why? Because of his stance on taxes. You see, for all the railing today’s GOP is doing about no tax increases or ending of tax breaks, what gets overlooked is Reagan’s overall record on taxes and revenue.

Surely we’ve all heard that Reagan cut taxes. The storyline goes “Reagan cut taxes and the economy grew.” But therein lies some serious policy omission. After a massive tax rate cut in 1981, Reagan along with Congress (which included a Republican-led Senate) proceeded to pass a number of measures designed to raise revenue. Any of those measures would be criticized today as tax increases.

I’d been surprised that little has been said about this. But finally, an article in Politico spells it out:

The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) is the most famous, because of its historic size and timing, a dramatic course correction that quickly followed Reagan’s signature income tax cuts in 1981. But in the six years after were four more deficit-reduction acts, which combined to almost double TEFRA’s revenue impact on an annual basis.

Translated into current dollars, the total revenue increases for the five bills would then be equal to about $190 billion a year. That’s far in excess of anything that has been proposed by the White House in recent deficit talks led by Vice President Joseph Biden, yet most of these increases were approved when Republicans controlled the Senate in the 1980’s.

Democrats could really bash Republicans’ heads with this. Instead of the insipid arguments we keep hearing about “tax breaks for millionaires and billionaires” and “tax breaks for Big Oil” a simple tack of “well, Reagan did it” would be nearly impossible for Republicans to counter. After all, Reagan is patron saint of conservatism.

Dems Say They Just Want to Go Back to pre-Bush Tax Rates. Don’t Be Fooled.

For years now, Democrats have been lobbying to have the current tax rates pushed back up to where they were before Bush II cut the rates.  The top marginal rate, now 35%, would go up to 39.6% for individuals earning more than $200,000 per year and families earning more than $250,000 per year.  Claims such as the rich need to pay their “fair share” (a term that is an undefined value, but effective in getting folks riled up), or that the rich have benefitted for long enough and need to pay up, are always used to try and bolster the argument.  I support the idea of raising the marginal rates for EVERYONE to where they were before the Bush tax rate cuts, and have said so many times.  But I discovered that, under further review, Democrats are attempting to go even further in their quest to turn high income earners into bigger cash cows for the government.

What most people don’t realize–and Dems aren’t going to hip folks to it–is that once the healthcare reform plan (“Obamacare”) goes into full effect, the tax rates for $200k/$250k earners will be more than they were pre-Bush.  How?  I’m glad you asked.

Baked into Obamacare are a number of tax rate increases designed to raise revenue to pay for the bill.  The number of taxes built in varies depending on which source you use, but there were two that jumped out at me.

First, there is a new 3.8% surtax on investment income for the over $200k/$250k crowd.  Currently, the tax rate on capital gains (profit made from an investment) and dividends (cash received for owning stock in a company) is at 15%.  The new surtax will push that rate up to 18.3%.  When the argument is made to go back up to the pre-Bush rate, which was 20%, there is no mention of the surtax.  If Democrats have their way, the rate for capital gains and dividends would be at least 23.5%.

Next, there is the 0.9% Medicare surtax, also for the $200k/$250k people.  Currently, 1.45% of everyone’s income is deducted to pay for Medicare.  Unlike Social Security, there is no cap on taxable income, so everything the person makes in income is taxed at the 1.45% rate.  However, with the new surtax, income over the $200k/$250k threshold will see a 0.9% tax increase, making the new tax rate 2.35%.  Instead of raising the top rate 4.6% to get it back to pre-Bush levels, the increase would actually be 5.5%.

A different discussion for another day is the laundry list of other taxes built in, such as the tanning tax, the medical device tax, the health insurers tax, ect.  The bottom line is, these taxes make the “we just want to go back to pre-Bush rates” argument nothing more than political foolery.  And, as usual, most of the masses fall for it.

Uncle Sam Wants to Tax You…By the Mile

In the US there is always the need for infrastructure upgrades and maintenance.  Unfortunately, funds are short these days.  So, the Congressional Budget Office (CBO) has floated an idea for a new tax to raise funds.  What’s the new tax?  Simple.  Drivers would get taxed for every mile they drive:

The report discussed the proposal in great detail, including the development of technology that would allow total vehicle miles traveled (VMT) to be tracked, reported and taxed, as well as the pros and cons of mandating the installation of this technology in all vehicles.

CBO’s report stressed it was making no recommendations but seemed to support a VMT tax as a more accurate way of having drivers pay for the costs of highway maintenance. The report said miles driven is a larger factor in highway repairs than fuel consumption and suggested that having drivers pay for the real costs of highways “would involve imposing a combination of fuel taxes and per-mile charges.”

On the one hand, funds have to be raised somehow, and this may be a viable option. However, it also would penalize folks who got more fuel efficient vehicles (less gas purchased at the pump means less gas tax revenue). Also, for folks like me, who are in sales, we would bear a disproportionate share of the tax bill.

We will see how this one pans out.

See, It’s Not Just the “Tax Cuts for the Wealthy” That Are Adding to the Deficit!

As mentioned here before, arguments complaining about how the “tax cuts for the rich” are unpaid for and adding to the deficit is disingenuous without an accompanying argument about the similarly “unpaid for” tax rate cuts for everybody else–which cost three times as much.  Somehow, no one wants to talk about that.

Today the CBO released an analysis of President Obama’s 2012 budget proposal.  According to the analysis, while the Obama administration predicted $7.2 trillion in deficits over the next 10 years, the CBO stated that the number is more like $9.5  trillion.

Nine-point-five.  Trillion.  With a “T.”

But what also jumped out of the analysis is that the CBO predicts that tax rate cuts for the middle class will be made permanent–and the cost of that cut is going to help increase the deficit:

CBO said the biggest reasons for the deficits, compared to the status quo, are the permanent extension of the Bush-era tax rates for the middle class and changes to the Alternative Minimum Tax that Obama favors in this budget. As a result of the tax policy, there is a $2.7 trillion net increase in the deficit over the next 10 years.

There you have it, folks. criticizing the rich may be en vogue, but if there is to be honesty in this, all tax rate cuts must be discussed.

And then, rolled back.

Politicians: Let’s wait to avoid the political fallout

United States Capitol in daylight

Image via Wikipedia

One would think that politicians in Congress would think it normal to work all the time.  But it seems that there is usually a good excuse to be used every election year:  wait until after the election to avoid fallout.

What?  Are you serious?

I along with many other people believe in a saying that goes:  “what’s a politician’s primary job?  To get reelected!”  Now, maybe it’s that I don’t understand the game, or wouldn’t want to be a player in the game, or just think the game is stupid.  But to me, if I’m in congress to get things done and represent the people, then I should be constantly working on the important legislation of the day, and letting the chips fall where they may.  But let’s look at how the waiting game has been played by looking at the current lame-duck session.

In the last few weeks, there have been votes on bills to extend current tax rates, dont’ ask don’t tell, and the extention of unemployment benefits.  While some politicians (namely Dems) said before the election that they “didn’t have the votes needed to pass (insert legislation here)” before the election, other politicians went on record condemning the action.

Quite frankly, the entire “we have to pass it now or the unemployed will lose their benefits and everyone will get a tax increase” drama was unnecessary.  Regardless of what we heard in the media, are we to believe that there was seriously a concerted effort to hammer out those issues before the election?  I think not.  Both sides sensed blood in the water, and for the side in danger, they didn’t want to put themselves in a worse position.  Don’t want to do anything that might jeopardize the free access to the Congressional spa, do we?

to pass a bill they say we can’t afford, let’s make it MORE expensive

An article out today explains how Senator Harry Reid has added some things to the Obama tax cut deal to help get it passed. Confusing, since much has been said about how the agreement does nothing to help with the deficit, and how the tax rate cuts for the higher income earners is unaffordable:

The sweeping tax cut bill introduced Thursday night by Senate Majority Leader Harry Reid is chock-full of sweeteners which could serve as a legislative pacifier for Democrats outraged over the concessions President Obama has handed to Republicans.

The stimulus-sized package includes about $55 billion worth of short-term tax extensions for businesses and individuals. They cover a host of alternative energy credits, a potential salve for environmentally conscious lawmakers, as well as targeted benefits for everything from the film and television industry to mining companies to rum producers.

Senate Tax Cut Package Filled With Sweeteners, Obama Predicts Passage

So, the answer to unaffordability? Make it more expensive!

Debt reduction: Andy Stern wants MORE taxes!

Who is Andy Stern?

Andy Stern is one of the people President Obama appointed to the Debt Reduction commission.  In the final vote, Stern voted no.  But this shouldn’t be surprising.  Stern is the past president of the Service Employees International Union (if you didn’t know unions are one of Obama’s favorite special interests, now you know).  His take on the plan?  from the NY Post:

“This is the issue of our time that must be solved,” said labor leader Andy Stern, who nonetheless voted “no” because he favored fewer spending cuts and more tax increases.
Unfortunately (and my left-leaning friends can’t deny this), it is a trait of the left that the answer to all revenue problems is to increase taxes.  Nevermind that there is proof from history that lowering taxes raises revenue in many cases.  The further problem is, even if the tax revenues did increase from higher tax rates, history has shown that often, the Democrat way is to increase spending instead of cutting spending.
As for Stern, do a search on him and the SIEU.  He didn’t leave the union in the best shape financially, so one has to wonder how he ended up on the commission.  Then again, he is one of the most frequent visitors to the White House…

Republicans inciting violence! oh, wait. She’s a Democrat. Will she get condemned?

I’ve lost count of the number of times I have seen those on the left calling for condemnation of statements made by folks on the right.  But what about when one of their own says something in the same category?   It seems a senator was suggesting that americans take up pitchforks…she’s a Democrat!

But lets look at some of what she says:

“…they insist on a permanent tax cut for the wealthiest americans, completely unpaid for”

Lets look at this the way it should be looked at. If the projected loss in revenue is indeed $700 billion over 10 years, that means spending would need to be cut from elsewhere for it to be “paid for.” The problem is, instead of suggesting that cuts be found, its easier to criticize the cost. Further, someone should ask a pertinent question: if continuing a tax cut that is unpaid for is such a bad thing, how is continuing ANY of the tax cuts good, since NONE of it is paid for?

“we are fighting for the middle class”

No. you are pulling the wool over the eyes of the middle class in hopes of getting them vote for you and keep you in office.

“70% of Americans don’t itemize deductions.”

So what? That has nothing to do with extending tax cuts. Wait…unless you’re building towards a bigger point…

“so that big ol complex tax code? its been written for wealthy america.”

Ah, there it is! Let’s dig at the high income earners! THATS what you were getting at! Unless there are rules in the tax code that say “only wealthy americans can get these deductions,” you just bent the truth, Senator.

“they have all kinds of ways that they can use the tax code to avoid paying taxes.”

Ah, yes, a famous tactic, used often by Democrats. Let’s imply that the high income earners aren’t paying their “fair share.” Too bad that the top 5% of income earners (making over $158k/yr) make 35% of all adjusted gross income (AGI) in the US, but pay almost 60% of all income taxes paid. The top 10% ($114k and up) make 46% of US AGI, but pay 70% of all income taxes paid. So, that leaves the bottom 90% of income earners to pay the remaining 30% of income taxes paid. This includes the bottom 50% of income earners, who pay less than 3%. The point? High income earners pay a lot in taxes, as they should, but implying they aren’t paying their share is rediculous.

“Its about leveling the playing field”

Its not the government’s job to redistribute wealth and calling it “leveling the playing field!”

“If they think its ok to raise taxes for the embattled middle class because theyre gonna pout if we don’t give more money to millionaires, it really is time for the people of america to take up pitchforks.”

Where do I start on this one? First, Republicans want to extend tax cuts for EVERYONE, not just the wealthy. Second, can someone explain to the Senator that a tax rate cut is not giving money away? To give something away implies there was possession in the first place. When someone has a tax cut, that means they get to keep more of THEIR OWN MONEY! I can only assume that she and other Democrats feel the government is entitled to everyone’s money and should be able to tell folks what they can and can’t do with it. Finally, the pitchfork comment, which is what came to my attention in the first place. I’ve heard many of my left-leaning friends screaming about something someone on the right said, how it should be condemned, and implying that Dems don’t do such. Well, let’s see if those people step forward and comment on this one.
The rest isn’t worth breaking down, other than to mention that she throws in a few digs at the wealthy just to get her constituents even more ticked off at Republicans and at the filthy rich people. It’s a shame that Congress can’t have serious discussions about this type of thing, but also a shame that people don’t realize people like her are part of the problem, not part of the solution.

At this rate, we’ll NEVER fix the issues

Today is the final vote on recommendations from Obama’s deficit panel.  For those who missed it, President Obama put together a bipartisan panel of 18 appointees, tasked with producing solutions for debt reduction.  The commission did its job, recommending multiple ideas that, if enacted, would help move the country towards fiscal stability.

As expected, the response was chilly at best.  Folks on both sides took the expected approach–“we need cuts, but don’t cut programs that I support!”  Republicans didn’t like the idea of tax increases on gas.  Democrats didn’t like the notion of raising the retirement age or lower tax rates.  Neither side wanted to sign on to doing away with popular tax breaks (even though lowering tax rates would offset it).

So, unless there is some sanity injected into things, we will continue on the rocky road to fiscal disaster.

Tax cuts, small businesses, and the $250k line

During the long drawn out battle regarding the Bush Tax cuts.  Democrats have drawn the line at $200k/yr for individuals and $250k/yr for families as the dividing line between those who should get permanent tax cuts and those who shouldn’t.  The main argument is that the $700 billion in lost revenue over the next 10 years is unaffordable.  Republicans counter that not only should there be no tax increases in these economic times, lots of small businesses will be negatively affected.  Of course, the truth (as I see it, of course) is somewhere in the middle.

A logical approach would be to extend them all temporarily (give it a year or 2), then let them expire.  Now, people are right now saying I’m crazy.  But if we’re going to be for real about getting the deficit under control, that should be option 1 on the table.  Republicans like to say “no tax increases” but there has to be a middle ground where folks aren’t overtaxed and the government is getting more revenue.  If anything, add a new bracket for folks making a million per year or more.  Either way, its illogical to completely remove the idea of a tax increase of some kind to combat spending.

Democrats, on the other hand, have established $250k as the line in the sand.  Mind you, no one has any idea why this number is the magic number.  But as Dems often do, it becomes an emotional issue.  That approach started from the beginning, when the tax cuts were enacted.  Despite the easily researchable facts that the cuts actually removed a number of lower income taxpayers from the tax rolls, reduced the lowest tax rate, and shifted the overall tax burden to the highest income levels (look it up), the cuts have often been referred to as “tax cuts for the rich” simply based on the sheer amount that an upper income earner got to keep (not “was given to them” as is often used as yet another argument).  What’s often heard is that folks making that much money either “don’t need a cut” or “won’t spend it.”  Or, that they cost too much.  I usually wonder how it can be said that the estimated $700 billion over 10 years is considered unaffordable, when the rest of the cuts are estimated to cost over $2 billion over the same time.   This is why if anything should be done, ALL should be rolled back.

I predict that the White House will give in to all cuts being renewed for 2 years in order to avoid all of them expiring on 12/31/10, which would be a political disaster.