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Should the Bush tax cuts be allowed to expire at yearend?

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2010-08-18 04:40 PM

Schmidt
Colorado Springs, CO
Posts: 852

Reference: Simon Johnson and James Kwak, New York Times, The Bush Tax Cuts and Fiscal Responsibility, August 12, 1010

Johnson and Kwak examine long tem projections by the Congressional Budget Office that show the effect on debt by extending the Bush tax cuts"

"According to the Congressional Budget Office, extending the Bush tax cuts would add $2.3 trillion to the total 2018 debt. The single biggest step our government could take this year to address the structural deficit would be to let the tax cuts expire. And a credible commitment to long-term fiscal sustainability should reduce interest rates today, helping to stimulate the economy.

"According to the Congressional Budget Office, the 2010 deficit will come in at $1.3 trillion, almost 10 percent of our gross domestic product and, along with the deficit of 2009, the highest level since World War II.

"As of January 2010, the budget office now projects that debt will rise to $13.7 trillion (more than 65 percent of G.D.P.) — a difference of $8.6 trillion (from the January 2008 estimate) . Of this change, 57 percent is due to decreased tax revenues resulting from the financial crisis and recession; 17 percent from increases in discretionary spending, much of it the stimulus package necessitated by the financial crisis; and another 14 percent to increased interest payments on the debt — because we now have more debt."

Republicans of course have been campaigning on two platforms: deficit reduction and extending the Bush tax cuts. They don't provide any credible analysis as to how extending the Bush tax cuts would pay for themselves as many have implied.

Obama has said he would let the Bush tax cuts for the top 2 percent expire (in effect reverting to the tax rates of the prosperous Clinton era), but retain the cuts for the poor and middle class. But this would also add to the deficit.

Everyone points towards the costs of Social Security and Medicare, but only the Republicans have made noise about actually cutting benefits.

NONE of our Republican leaders and very few Democrats even whisper about the need to cut defense spending. According to Robert Higgs at the Independent Institute, when you add together all the defense related parts of the budget, the fiscal 2009 total is $901.5 billion. It would seem to me that the defense budget should be scrutized and cut like avery other part of the budget. Will that happen? Don't hold your breath.

So what will happen with the budget next year?

2010-10-16 08:06 AM

Jekyll Island
Dallas, TX
Posts: 5

Unfortunately the spending on defense is all we have that is still creating technology & jobs. Once you cut that like we did with NASA then jobs will go away.
For every action there is a reaction, please try to remember that

2010-10-16 08:10 AM

Jekyll Island
Dallas, TX
Posts: 5

When the Bush tax cuts go away expect to see a family that is earning;
$70,000 have a tax increase of roughly 42%
$150,000 have a tax increase of roughly 24%
$500,000 have a tax increase of roughly 11%

Yes we have deficits, but the lapsing of these cuts will only hurt the poor & middle class.

I hope you get what you ask for

2010-10-16 09:13 AM

EL PREZIDENTE KABOOM
Dallas, TX
Posts: 700

Yep...you're Nathan Spewman.

Interesting, how you note that military spending creates technology and jobs, how socialist of you

2010-10-16 09:45 AM

Schmidt
Colorado Springs, CO
Posts: 852

Actually Obama has proposed extending the Bush tax cuts for all but those couples making over $250,000. However, the Republicans will likely use their usual tactics to hold up the legislation until the cuts are extended for the über-rich as well, maybe acquiesing to a two year delay, which means that in two years the same debate will come up again.

Republicans have spread much misinformation and lies about the Bush tax cuts, but one thing is for sure...they have flunked basic arithmetic in high school. They absolutely cannot promise eliminating a $1.3 trillion budget defict by adding more deficit with tax cuts for the über-rich. Cutting all earmarks cuts the budget by $7.7 billion, eliminating the Department of Education cuts the budget by another $71 billion, eliminating the Department of Energy cuts $28 billion from the budget. Foreign aid? A whopping $50 billion.

Social security and Medicare are covered by payroll taxes. Would Republicans cut those benefits? How about military costs? Republicans criticized Obama for not adding more.

So I would like to see a breakdown of a Republican plan to balance the budget and what they would cut to do it. The fact is they don't have a plan and they don't give a crap about deficits until Democrats are in power.

"You know, Paul, Reagan proved deficits don't matter," -- Dick Cheney to Treasury Secretary Paul O'Neill when O'Neill raised alarms about the Bush deficits.

2010-10-16 10:13 AM

chipper
siskiyou county, CA
Posts: 41

"When the Bush tax cuts go away expect to see a family that is earning;
$70,000 have a tax increase of roughly 42%"

If that was true then those same families should have seen the same tax decrease when the Bush cuts when in. That never happened.

Cut taxes.
Start an unnecessary war.
Lose an election and bitch about the deficit.
It's the Republican way.

2010-10-16 02:46 PM

Schmidt
Colorado Springs, CO
Posts: 852

This is extracted from the Citizens for Tax Justice analysis of September 17th comparing Obama's tax plan and the Republican Senators' tax plan.

President Obama proposes to make the Bush tax cuts permanent for all but the richest two percent of taxpayers. He also proposes to make permanent the modifications of the Bush tax cuts (expansions of the Child Tax Credit and Earned Income Tax Credit) that were included in the recovery act.

Senate Republicans have introduced a bill (S. 3773) to make permanent the income tax cuts enacted during the Bush administration for all taxpayers and to repeal most of the federal tax on the estates of millionaires. This bill would not make permanent the expansions of the Child Tax Credit and Earned Income Tax Credit included in the recovery act.

Under the Republican plan, the bottom 60 percent of U.S. taxpayers would pay $124 more in 2011, on average, than they would under President Obama's plan.

Under the Republican plan, the richest one percent of U.S. taxpayers would pay $45,893 less in 2011, on average, than they would under President Obama's plan.

Under the Republican plan, the richest one percent of taxpayers would receive 34.5 percent of the total tax cuts in 2011.

Refer to the CTJ website for more details.

2010-10-17 06:36 AM

edward
panama city, FL
Posts: 2

yes they should be cut along with welfare to everyone except the elderly and handicapped.

2010-10-17 01:41 PM

EL PREZIDENTE KABOOM
Dallas, TX
Posts: 700

Hey look.....they even have Vampire names now.....

2010-11-11 03:04 PM

Kr8ive
Not Selected
Posts: 1

THE LIBERAL SHOULD COME OUT AND DEMONSTRATE AGAINST THE EXTENSION OF TAX CUT FOR THOSE MAKING MORE THAN THE 250,000 A YEAR.

THEY SHOULD BE ON THE STREET ALL OVER THE COUNTRY WITH THE MESSAGE " THE RICH SHOULD NOT GET THE EXTENSION AND PUTTING THE BURDEN ON OUR CHILDREN AND GRANDCHILDREN FUTURE. THE RICH NEED TO PARTICIPATE FULLY SINCE THEY BENEFIT THE MOST.

2010-11-11 04:07 PM

EL PREZIDENTE KABOOM
Dallas, TX
Posts: 700

Indeedie-do the rich benefit the most! You hit that one on q.
El Prezidente Kaboom here...Aloha.

In fact they need and ask for more government than we do....
what you say Kaboom? nah you talking crazy?
Hey Holmes...ever heard of contract law..or access to markets...or the FBI or an educated, healthy, able bodied work force? What about Insurance(lot a contract law)...the stock exchange (mucho contract law)...banks(dear lordy, even more contract law)....mutual funds(ahhhh!)........

If the rich did not have legal markets and financial mechanisms regulated by the government where their rights are protected;THERE WOULD NOT BE ANY RICH PEOPLE.

In the end..an advanced capitalist society cannot be built on its own.....nor can it survive without contributions from all....in whatever capacity that they posses the talent or means to give...

we do not send our our old men and women into war....why because it would be cruel and inefficient...
maybe not in every case...considering what I've seen my elders do...but geriatrics in old folks home certainly have no place on the battelfield.
If we can ask more of the able bodied in war, than we do of others....we can ask for a higher percentage of taxes paid by those who make more money....who despite whatever they may claim of tyranny... make their profits on a foundation of government regulation, that they have the most influence on....

In the end...WE BAILED OUT THE RICH! And now their coming for more. Now their coming for your social security and medicare.

2010-11-11 06:30 PM

Schmidt
Colorado Springs, CO
Posts: 852

Hey, EPK, I really liked the George Carlin video, The American Dream. There is a lot of truth in it. Carlin died in June 2008 before the worst of the recession started to hit. If he was still alive today, I'm sure he would have something more to say about our current economic situation that favors the super rich..the plutocrats who control the wealth...make the laws...and have bought the politicians with their campaign contributions.

And yes we are on the road to a corporate fascist state when the people out of ignorance keep voting against their own economic interests. I'm surprised they don't carry around signs saying..."support our billionaires by cutting Medicare and Social Security." It's basically what the populace is saying when they support extending tax cuts for the rich. You give the rich a bigger piece of the pie and it means a smaller piece for someone else.

And NO tax cuts for the rich don't create jobs in America. There is no evidence of that. It's a myth perpetuated by the rich through their propaganda media outlets...Fox News. Of course we have discussed all that in other forum posts. I'll have to dig those out.

2011-04-19 07:07 AM

paul T.
Colchester, VT
Posts: 31

Let's remember folks....it wasnot until President Obama (during the lame duck session from 11/2010 to 1/2011) agree with the Repubs to extend all of the Bush Tax Credit that BUSINESSES started Hiring again...If you donot renew them then Businesses will not hire....think of it this way....if you are a business and you are going to have to pay more taxes...are you going to use that money you have to hire more workers or pay more in taxes...another way to think of it is this...if Joe Public Knows that his taxes will be going up, then is he going to go out and buy a new car? no he isnot! He needs that money to pay his taxes...Business is the same way...the more you tax them then the less they can do in hiring...

2011-04-19 06:02 PM

Schmidt
Colorado Springs, CO
Posts: 852

Paul, I will have to respectfully disagree with your analysis.

First, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 passed in December 2010, included the extension of the Bush tax cuts, but did not have any significant provisions specific to big business. It did have a provision to allow small businesses to expense 100% of their investments in 2011, potentially generating more than $50 billion in additional investment in 2011, which fuels job creation. But this is something that Obama pushed for, and it was not a part of the original Republican proposal.

Second, as you know Obama was opposed to extending the Bush tax cuts for the top 2 percent, but only agreed to do so in order to gain concessions on unemployment benefits and other provisions that benefit the middle class and education. He was a big proponent of extending the Bush tax cuts for the bottom 98 percent. To suggest that Business started hiring again because of the extension of the Bush tax cuts for the top 2 percent doesn't make sense to me. Income tax cuts, in general, do not have the stimulative effect that say extending unemployment benefits does. The top 2 percent are a small part of the population, and the stimulative effect on the economy from their spending is considerably less than a person spending nearly all of his/her income to survive...much of the middle class.

Third, the suggestion that hiring jumped up immediately after the Bush tax cuts were extended doesn't hold true. The steady upward trend in private sector hiring has been a result of all of Obama's programs starting with his stimulus bill passed in February 2009...the results of which lagged a few months after the passage of the legislation. I don't see anything in the graphical trends that would tie directly to the Bush tax cuts for the rich.

Spending is what drives the economy and leads to hiring. Small businesses do more hiring locally and benefit from the many Obama provisions to improve business profits and in turn hiring. Many of the big businesses are still outsourcing jobs overseas, except for firms like McDonalds that rely on local service.

Displaying all 14 Forum Posts for the Thread:

Should the Bush tax cuts be allowed to expire at yearend?

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