Extending Tax Cuts, Why Can't the Politicians Compromise?

[Craig234]

Now Craig,

I'd be dissapointed in you if you weren't aware of the Budget Reconcilliation Process and it's purpose. Of course you're familiar with it.

So you know quite well that the Dems, who hold comfortable majorities in both Houses, could easily pass any tax bill they wished.

Fern

I was responding to his comment as general, as it was written, but it's fair to say he might have meant it only in the context of any tax policy.

In that case, here's what I wrote on Sep 14 on the topic.

You're right that seems like a valid question IMO.

You went on to raise a very good question why Democrats don't use reconciliation to pass their policy (which Republicans are opposing which is *their* fault).

So, I have a question into Senator Boxer's office asking for an answer. It mentions that reconciliation is how the Republicans got THEIR cuts passed in the first place.

While we're on the topic, though, it's not clear why the Republicans used the reconciliation process, which forces the time limits; it wasn't needed to avoid filibuster presumably, when the vote was 65-35.

 

[Fern]

Hogwash. Average total taxation for the top 1% of incomes is ~30%, less for those in the lower ranks. You're not paying 50% unless you're single, standard deduction, living in NYC, and making upward of $400K salary + bonus annually.
-snip-

Well, this perfectly illustrates the problem with using averages.

Remove the fund managers with their obscenely generous and senseless benefit of only paying 15% on their (wage) income and let's see what the average really looks like.

BTW: You and everyone knows that the tax code is complicated, pls take that into account in your posts and thoughts. E.g., the top marginal rates are NOT those found merely by looking at the tax rates.

Other things work in the background to raise those (marginal) rates above those stated in the rate charts. We generally have phase-outs for itemized deductions and personal exemptions. That raises the top marginal rate several percentage points. The alternative minimum tax can also raise the rates surreptitiously.

So, notwithstanding fund managers, many of these rich people are paying a pretty high rate of tax - 50% or more considering Fed/state/local income tax and payroll taxes. (Soon an additional amount of about 1% will be charged on these people's salary, and an additional 3.8% on non-salary income . These are new taxes in the Health Care Bill.)

Fern

 

[Tom]

So, notwithstanding fund managers, many of these rich people are paying a pretty high rate of tax - 50% or more considering Fed/state/local income tax and payroll taxes. (Soon an additional amount of about 1% will be charged on these people's salary, and an additional 3.8% on non-salary income . These are new taxes in the Health Care Bill.)

Fern

Please give an example of someone paying 50% of their income in taxes. Keep in mind the top tax rate only applies to income in the top tax bracket and payroll taxes are only collected to about $100k. Which means federal taxes for the wealthiest are less than 40%, even if the Bush tax cut expires.

 

[spidey07]

Please give an example of someone paying 50% of their income in taxes. Keep in mind the top tax rate only applies to income in the top tax bracket and payroll taxes are only collected to about $100k. Which means federal taxes for the wealthiest are less than 40%, even if the Bush tax cut expires.

AMT, plus state, plus local = 50% or higher.

 

[brencat]

I think you're confusing those who make (perhaps marginally) more than $250K with those (like fund managers) who regularly make millions or 10's of millions each year.

We've seen many threads here arguing about who is really 'rich' etc.

Maybe the solution, and perhaps an obvious one, is to create an additional bracket for those making over $500k or $1 million instead of just lumping the $250k people in with those unarguably super rich people.

Fern

Exactly right...and what I've been saying for a while now.

 

[Fern]

Please give an example of someone paying 50% of their income in taxes. Keep in mind the top tax rate only applies to income in the top tax bracket and payroll taxes are only collected to about $100k. Which means federal taxes for the wealthiest are less than 40%, even if the Bush tax cut expires.

I would have thought it clear we were speaking of marginal tax rates. I mentioned it at least 3 times in the post my post quoted (you managed to find one paragraph where I didn't spell out "marginal".) The whole topic is of marginal rates; we're talking about the bracket for those making over $250k.

So yes, they can be easily be paying over 50% unless they live in a state with no personal income tax.

The two classes who aren't are:

(1) Fund managers with their 15% rate of tax on what clearly seems to this tax professional to be income from personal services. This is inexcusable and angers me.

(2) That class consisting of the 'idle rich' whose source of income is primarily dividends and cap gains. IMO, they should not be able to escape 'normal' taxation, nor should they be able to escape paying towards Medicare and Medicaid etc. This angers me only slightly less than the group in #1 above.

But to lump these people in with those working and making over $250k is alo inexcusable.

We have the ability, and have amply demonstrated the willingness in the past, to 'fine tune' our tax laws as much as we wish. There is absolutely nothing, not legally or practically (the IRS already all the info necessary etc), in correcting the situation for the 2 groups above.

Fern

 

[GuitarDaddy]

Quote: Originally Posted by Fear No Evil Stunt for the Republicans? The Democrats have the ability to pass whatever they want. Are you that ignorant? I mean, I gave you credit for huge ignorance, but that much?

Not ignorant, just serially dishonest like most repubs

 

[HumblePie]

Al Gore invented the internet...omg you've got to be kidding me...

Brencat,

This is one stupid urban myth that keeps being perpetuated. Al Gore never made that statement. He never claimed anything of the sort.

What Al Gore did do was be the first political figure to recognize what the internet was and how great it would be, well before most other political figures even knew what a computer was back in the early 70's. He pushed for the internet and bills for it. He was the first for many things related to the internet in government involvement. He never claimed he invented squat when it came to the actual hardware or technologies. It's when I read this type of bullshit from anyone that makes the rest of their post worthless if they can't bother to fact check ignorant claims before making them.

 

[werepossum]

Brencat,

This is one stupid urban myth that keeps being perpetuated. Al Gore never made that statement. He never claimed anything of the sort.

What Al Gore did do was be the first political figure to recognize what the internet was and how great it would be, well before most other political figures even knew what a computer was back in the early 70's. He pushed for the internet and bills for it. He was the first for many things related to the internet in government involvement. He never claimed he invented squat when it came to the actual hardware or technologies. It's when I read this type of bullshit from anyone that makes the rest of their post worthless if they can't bother to fact check ignorant claims before making them.

I believe his exact words were "that's why I took the initiative in creating the Internet." Gore was hardly a pivotal figure in creating the Internet, but he did support it, probably as well as any politician. He also claimed to have led House hearings which "uncovered Love Canal", which was extensively covered before he even became a Representative. Even for a politician the man has problems grasping the truth without stretching it beyond all recognition.

BTW, Gore was elected to Congress (on the strength of his father's name recognition) in 1976.

 

[Darwin333]

Everybody knows damn well why they can't compromise. Dems need ammunition to say "republicans are out to give tax cuts to billionaires when mainstreet is suffering *rabble*" and get the rabble rousing going.

Republicans want the ammunition to say "see! Democrats have huge tax hikes in middle of recession. *rabble*rabble*!"

Both sides are disingenuous to garner votes. That's why nothing was done before the election.

Personally, I think it is much more nefarious than that. It is intentional misdirection that is used quite well by both political parties.

 

[ElFenix]

While we're on the topic, though, it's not clear why the Republicans used the reconciliation process, which forces the time limits; it wasn't needed to avoid filibuster presumably, when the vote was 65-35.

probably a few senators weren't comfortable with the cuts being permanent but were ok with the sunsetting.

:shrug:

 

[spidey07]

Personally, I think it is much more nefarious than that. It is intentional misdirection that is used quite well by both political parties.

I think it's Obama's deep seated psyche and anti-colonialism against those he perceives to be holding others down. That and his end goal is the destruction of western capitalism.

Listen to his words, his reasoning, watch his actions, you can see very clearly how he perceives his world.

 

[JSt0rm]

I believe his exact words were "that's why I took the initiative in creating the Internet."

interesting that you say those are the exact words. When I do a Google search of that quote the only hit I get is you, in this thread.

 

[IndyColtsFan]

interesting that you say those are the exact words. When I do a Google search of that quote the only hit I get is you, in this thread.

His exact words, according to http://www.snopes.com/quotes/internet.asp, were:

"During my service in the United States Congress, I took the initiative in creating the internet. I took the initiative in moving forward a whole range of initiatvies that have proven to be important to our country's economic growth and environmental protection, improvements in our educational system."

Now, he didn't literally mean that he created the internet; he meant that he was a leader in backing the legislation to create it. He phrased it poorly.

 

[shira]

The right wants to cut the deficit on the backs on the poor and middle class. The right is adamantly opposed to letting the tax cuts for the rich expire. Instead, they want to reduce the size of government. But what programs, exactly would they reduce or axe? I defy the right to inform us of a single government program or agency they would cut where the cost of that cut isn't borne MORE by the poor and middle classes than the rich.

 

[spidey07]

The right wants to cut the deficit on the backs on the poor and middle class. The right is adamantly opposed to letting the tax cuts for the rich expire. Instead, they want to reduce the size of government. But what programs, exactly would they reduce or axe? I defy the right to inform us of a single government program or agency they would cut where the cost of that cut isn't borne MORE by the poor and middle classes than the rich.

Tax cuts are not a cost. What the hell is wrong with you? When faced with the hugest tax increases EVER by Obama and his democratic congress you really want to play the "but republicans" game?

How about we stop TARP, repeal obamacare, and stop any new spending. That's the idea. Stop the obama spending and make sure to STOP him. By stopping his goals We The People cut the deficit, just mere opposition to that fucker increases the economy and lower spending.

 

[Craig234]

His exact words, according to http://www.snopes.com/quotes/internet.asp, were:



Now, he didn't literally mean that he created the internet; he meant that he was a leader in backing the legislation to create it. He phrased it poorly.

You're almost right, except the 'phrased it poorly' part.

Here's my opinion of what happened.

A group of people who were committed to creating marketing to get George Bush elected for all the wrong reasons, who wanted to lie and spin and say whatever was needed to get votes, talking about issues unrelated to the issues they wanted to elect him for that were related to his steering trillions of dollars to the wealthy, sat in a meeting and said, 'oh crap.'

'We're against a guy who is the designated successor of peace and prosperity, who actually balanced our guy's father's huge deficits while we only talk about it.

And our guy is up against the guy who was the top politician at fighting for funding the creation of the biggest American invention since the PC and the man on the moon.

In contrast, our guy ran a few oil firms that failed and took money from Saudi friends who wanted to influence his father, and used the money he got from insider trading at Harken energy - which he got by people who wanted to influence George H. W. Bush, and who was protected from prosecution by his father, to buy part of a ball team.

How the hell are we going to get 10% of the vote much less 51%?

Here's how: take Gore's big thing, the internet, and ridicule him. How? Well, if we tell the lie enough that he's a 'liar' who can't be trusted, and people fall for it, they'll care more about that than the good part he did. So, what do we do to sell that? He hasn't said anything we can use. Oh, wait, here's one thing - if we just lie about what he said about his initiative in creating the internet and say he claimed to CREATE the internet, well, our ability to blast the message and tell the big lie will persuade enough people.

It's weak, but we have no other viable angle, so get it out there, loud. Support it with dozens of made-up and exaggerated examples for the 'he's a liar' message.

And that's just what they did, and the big lie worked, again.

Even Gore's defenders tend to accept the 'at least he worded it poorly' thing, because if so many people are fooled by the lie, it must be Gore's poor phrase, right?

It can't possibly be liars and propagandists with a huge budget and the ability to use the big lie.

What a travesty and embarrassment for the country. JFK claimed he was the first man to walk on the moon! What a liar!

Save234

 

[Craig234]

probably a few senators weren't comfortable with the cuts being permanent but were ok with the sunsetting.

:shrug:

Yes, that's the same speculation I have about why they weren't permanent, but it doesn't quite answer why they used reconciliation, unless it was a sort of misleading way to get the time limits but say they 'had to' when they didn't, because reconciliation requires them.

 

[ultimatebob]

Hogwash. America's wealthiest aren't taking any risks, making any investments they don't have to make atm. They have enormous excess in their incomes, and they're stashing it under their mattresses or buying govt bonds. The only way to bring it back into circulation in the economy is via taxation.

Repubs are holding the middle class Bush taxcuts hostage to the taxcuts for the true Bush Constituency, and anybody with enough sense to pour piss out of a boot realizes that.

Bingo. I'm sick of pundits saying that the tax cuts will prevent small business owners from investing in expansion, because it's BS.

I KNOW several small business owners, and they haven't made any significant expansions for several years now because of the bad economy. Instead, they're saving the money for retirement, and spending it on "toys" like new sports cars, boats, and airplanes.

If most small business owners are like these guys, the only businesses that will stop growing from the repeal of the tax cuts will be Porsche and Beechcraft.

 

[LegendKiller]

Bingo. I'm sick of pundits saying that the tax cuts will prevent small business owners from investing in expansion, because it's BS.

I KNOW several small business owners, and they haven't made any significant expansions for several years now because of the bad economy. Instead, they're saving the money for retirement, and spending it on "toys" like new sports cars, boats, and airplanes.

If most small business owners are like these guys, the only businesses that will stop growing from the repeal of the tax cuts will be Porsche and Beechcraft.

What's amusing is that these shitstains parrot this shit over and over, all at the behest of the Kochs and Waltons. After all, these are the same shills who run around bemoaning the Estate Tax. The special interests are the same, they just manipulate the meat shields forward to take the brunt of the blowback.

Then they just sit back and laugh at the Teabaggers and the rest of their merry band of fuckups, and enjoy the fact that they are making money with no effort, all thanks to the moron "republicans" doing all of the heavy work.

 

[spidey07]

What's amusing is that these shitstains parrot this shit over and over, all at the behest of the Kochs and Waltons. After all, these are the same shills who run around bemoaning the Estate Tax. The special interests are the same, they just manipulate the meat shields forward to take the brunt of the blowback.

Then they just sit back and laugh at the Teabaggers and the rest of their merry band of fuckups, and enjoy the fact that they are making money with no effort, all thanks to the moron "republicans" doing all of the heavy work.

Umm, I see no porsche in my driveway. I see a 235K mile car and my wife's lease of 240 a month and yet we are the "evil rich". I see both our properties worth 500k with 230 outstanding and despite all time lows nobody is buying, and yest they are priced well below FMV. I see my taxes going up that restricts our investment thanks to AMT and Obama's outlandish tax hikes. Basically we aren't spending shit because of Obama and our personal situation to make the most of capital investment in real estate and pulling all of my high dividend stocks out before year end because most all of them are LTCG.

So basically, we're hunkering down for the continuation of the Obama Economy. Holding onto our wallets, specifically because of his policies. Now if we were truly rich we could take advantage of these super low rate, but we ain't rich and I see no porsche, only making sure I have enough cash to withstand the Obama Assault.

 

[JSt0rm]

Umm, I see no porsche in my driveway. I see a 235K mile car and my wife's lease of 240 a month and yet we are the "evil rich". I see both our properties worth 500k with 230 outstanding and despite all time lows nobody is buying, and yest they are priced well below FMV. I see my taxes going up that restricts our investment thanks to AMT and Obama's outlandish tax hikes. Basically we aren't spending shit because of Obama and our personal situation to make the most of capital investment in real estate and pulling all of my high dividend stocks out before year end because most all of them are LTCG.

So basically, we're hunkering down for the continuation of the Obama Economy. Holding onto our wallets, specifically because of his policies. Now if we were truly rich we could take advantage of these super low rate, but we ain't rich and I see no porsche, only making sure I have enough cash to withstand the Obama Assault.

He's not talking about you. fuckin christ.

 

[IndyColtsFan]

You're almost right, except the 'phrased it poorly' part.

We'll agree to disagree. The source of the quote also agreed it was phrased awkwardly.

 

[dmcowen674]

Dave, I don't have a problem with establishing 5 or 6 new marginal rates at higher levels of income starting at $750k and above, as I've discussed at least twice in previous threads -- feel free to search for it. My issue has always been this fascination with $250k as the threshold where suddenly someone is rich. I live in NJ / work in NYC and pay a ridiculous amount of tax and I am NOT rich. $250k where I live is a joke.

Semantics

Micromanagement is not the problem.

Are you trying to deny there are no rich in the NY area? It probably has the highest concentration of rich in the country despite the costs and taxes you speak of which is the point. High taxes on the rich does not make them poor.

There is nothing stopping you from moving if you don't like it.

 

[spidey07]

He's not talking about you. fuckin christ.

When you lump me into the "evil rich", damn straight I'm going to tell you to fuck off with your liberal failure idealogy and time proven failed policies of the Obama Economy.