Battle Looms in Washington Over Expiring Bush Tax Cuts

[alp227]

Source: The New York Times

WASHINGTON — An epic fight is brewing over what Congress and President Obama should do about the expiring Bush tax cuts, with such substantial economic and political consequences that it could shape the fall elections and fiscal policy for years to come.

Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 — what Democrats call the middle class.

Most Republicans want to extend the tax cuts for everyone, and some Democrats agree, saying it would be unwise to raise taxes on anyone while the economy remains weak. If no action is taken, taxes on income, dividends, capital gains and estates would all rise.

The issue has generated little public attention this year as Congress grappled with health care, financial regulation, energy, a Supreme Court nomination and other divisive topics. But it will move to the top of the agenda when lawmakers return to Washington in September from their summer recess, just as the midterm campaign gets under way in earnest. In recent days, intense discussions have begun at the Capitol.

Beyond the implications for family checkbooks, the tax fight will serve as a proxy for the bigger political clashes of the year, including the size of government and the best way of handling the tepid economic recovery.

Read more: http://www.nytimes.com/2010/07/25/us/politics/25tax.html?_r=1&partner=rss&emc=rss&pagewanted=all

[TomCADem]

1. What Happened To Republican Concern About The Deficit? Save The Rich!

Of course, the media will give Republicans a free pass on the issue. When President Obama tries to extend unemployment benefits, we hear 24/7 about the deficit. But, when it comes to letting tax cuts for the rich expire, we don't hear squat about the deficit. Finally, the roll back is only back to Clinton era rates, which were a far better economic time than during the Bush years.

[mvd]

34. Agree. Repukes don't want small government

In fact, they want UNEQUAL government.

They want:

- government favoring big corporations and the rich
- government intruding into our private lives
- small government for things involving infrastructure and the middle class/poor
- big government when it comes to defense spending

[wordpix]

41. they want small government only concerning the little people- otherwise, big balloon gov. serving

the richies is their goal, as long as they get the gov. contracts, the perks, the best gov. jobs and chances to revolve to private life with a huge corporate salary and no regulations.

Otherwise, "small gov." it is.

[sofa king]

51. Most of their positions are chosen for their ability to confuse.

The Republican Party, as a front for the wealthiest sector of the population, really has few interests of its own, besides temporarily sating the greed which drives it. Every other position they have is either designed to confuse unsophisticated American voters, or anger them, or otherwise increase the chances that the voter will give up and stay out of the political process.

Thus, in Republican-land, it's perfectly okay to counter a budget bill thousands of pages long with a 16 page glossy pamphlet with no numbers in it, because just by expressing opposition, even opposition not based in reality, they can ablate voters from the party that actually represents their interests.

Lawyers have a phrase that goes like this: if the facts are on your side, present the facts; if the law is on your side, present the law; if neither the facts nor the law is on your side, pound the table.

Republicans are always table-pounders, because they don't give a damn about facts or the law.

[laughingliberal]

53. Deficits only matter if the money goes to the poor. nt

[Nostradammit]

2. What an unbelievable load of crap The New York Times has become

This article is so slanted I'm surprised it hasn't toppled over.
Such subtle wording to make it sound like the tax cuts expiring
are bad for the country.

My neck veins are bulging again...

[underpants]

29. I saw the headline on MSN and that was enough for me

Battle? why because the Republicans are stomping their feet and having a fit?

What part of 53% does the NYT not get? Obama won with 53% of the vote- in this environment (let alone that he is black-if they hadn't noticed) that is a landslide.

[wickerwoman]

49. Yep.

Meeting fascists half-way does not equal "fair and balanced".

[jmowreader]

3. Is there not one person in Washington...

who can tell the electorate the rich do not fucking create jobs?

I'm serious. The only people who create jobs out of their own pockets are running sole proprietorships. Rich people incorporate. NO rich person in America would ever run a sole proprietorship; the risk of losing your personal fortune in a lawsuit is far too great. Only spunky bootstrappers run sole proprietorships; the second they get three nickels to rub forever, they go out and get a Chinese wall built between their company and their personal checking account.

Corporations create jobs and, as of now, we are not discussing screwing with the corporate tax structure.

[Raggz]

6. corporations

Most small businesses are corporations that do not pay the corporate tax rate, they pay the personal rate. Yes, these businesses hire most of the workers.

You cannot find one economist that will say that raising taxes will not reduce jobs.

[misterkhalil]

7. Because jobs could not possibly be created any other way.

That would be ludicrous if, say, the government (the biggest single employer of jobs in the whole nation) could create jobs. Insane.

[hack89]

42. Are you advocating a larger military?

bigger post office? CIA, DIA, etc? More money going to defense contractors? Just what jobs can the government hire more people to do?

[kimmylavin]

44. The infrastructure in this country is falling apart.

That's what the New Deal embraced -> all those public works projects.
I think that's what the poster is suggesting.

[hack89]

45. There are plenty of construction companies

that need work. The government doesn't need to hire anyone - simply fund infrastructure projects.

[kimmylavin]

46. So more government money into private companies? nt

[hack89]

58. The government doesn't own a construction company

who do you think is going to plan, manage and execute all these infrastructure projects?

Many construction companies are small, owner run and operated family business. Why should they be shut out of such work?

[Hekate]

10. It's the sunset of a tax reduction for the rich, not an actual increase. The reduction was designed

... to end this year, during someone else's presidency -- it was designed that way by Bush-Cheney and the Repubs.

Repeat after me: "It's not an increase. It's not a new tax. It's the old tax coming back."

If those Bushit tax reductions really worked the way he said they would, we wouldn't be in this mess that he left behind.

Repeat after me: "It's not an increase. It's not a new tax. It's the old tax coming back."

Hekate

[pattmarty]

16. But who wants to listen to you, when we have Fox to TELL us what is right.

:sarcasm:

[SharksBreath]

18. Republicans during Clinton years said raising taxes

wold destroy our economy.

It didn't. It created the greatest growth this country has seen since WWII.

Tax the sums of bitches.

[laughingliberal]

54. Yep. And all those lovely tax cuts under Bush created a whopping 3 million jobs in 8 years.

:woohoo:

[wordpix]

61. huh? did you forget the sarcasm tag or are you series??!!

[HughBeaumont]

65. Actually . . .

. . . the number, as it turns out, is MUCH lower - 1.1 million. And yes, that didn't even come CLOSE to keeping up with population growth or incoming/outgoing numbers.

The Borrow and Waste party keeps on failing the American people with their destructive economic policies, and now their stomping like toddlers over a return to Clinton-level taxes. Classic.

[Hansel]

37. Really?

How about if the wealthiest pay their fair share in taxes, the deficit is reduced and the amount of interest we are paying on the debt is reduced? Credit frees up, they can borrow money again and people spend more because they are paying less of the overall tax burden. How about the government can afford to add teachers we sorely need and, indirectly, constructions job by funding infrastructure projects in which we are of great need? Etc. Thus creating more income for the middle class to spend at small businesses. Thus causing them to have to hire more workers.

I'm willing to bet that most small businesses don't net enough to end up paying the higher taxes on the net income over $200,000 to $250,000. Taxes of under 4 cents more on a dollar of every net dollar over $200,000 in profit is not exactly a deal breaker.

Maybe many small businesses have owners who look at it the wrong way. Maybe they are just a bit to self absorbed for their own good. Maybe they are looking for a free ride. They don't want to pay their fair share for the taxpayers footing the bill for educating their employees, paving the roads they use, paying for patent courts and law enforcement to protect their property and investments, paying for airlines so they can ship their goods, and buses and trains to transport their employees and customers, etc., etc. They just want big pay checks and the rest of us to foot their expenses. Maybe they need to grow up.

I would agree that there are some taxes on small businesses that need to be addressed. Like FICA. That could be taken care of by lifting the cap on FICA and having everyone just pay 4% (edit to add maybe even 3% so it's less for the vast majority) on all of their personal income. Businesses should not be making that match at all.

But history proves the "raise taxes lose jobs" so called experts wrong.

In 1993 taxes were raised to the level that they will be if the Bush tax cuts expire. There is no sane economist that would argue that we lost jobs. If I remember correctly is was a quite significant period of job growth. So, if these creatures of genius are using tax increases as their only measure to predict job decreases, they are being disingenuous and we only need go back a decade for the proof.

Tax rates are historically low right now. And so they were in the 1925-1928's @ 25%. Even so, we had a major depression in 1929 at which point they were 24%. 11% lower than now.

During the 1930's as we recovered from the depression taxes zoomed up to 63 to 79% and yet we still grew jobs.

So how is that job growth doing now after 10 years of tax cuts? Not so hot, correct?

There is no reputable economist who would say that tax cuts or increases alone create or reduce jobs. There are a lot of different factors and history is quite clear on this matter. You can have higher taxes without reducing jobs. And we have. A lot higher. Over 50 percentage points higher.

The economy is far more complex than this simplistic claim. Too often people who espouse this viewpoint are doing so mostly because they don't want to pay their fair share of taxes. That's for peons.

Edits for spelling

[laughingliberal]

55. +1000 nt

[jmowreader]

52. Rate has nothing to do with it!

The lie we are told is: if we cut taxes on rich people, rich people will feel this sudden urge of benevolence and start hiring people right and left.

I am certain you know the difference between Subchapter S and Subchapter C corporations, but I'll put this here for the benefit of the lurking teabaggers and freepers:

There are two kinds of corporations: Subchapter C and Subchapter S.

Think of an "S Corporation" as a "small corporation." The intent is to allow a small business to protect its owners from legal liabilities (remember, under "corporate personhood" the buck stops with the corporation.

Example: Julie Jones opens Julie's Deli and sells sandwiches. Jack Smith buys a sandwich from her, takes it home and leaves it on the counter. Three days later, Jack's wife Linda comes home from the bar drunk off her ass, eats it and gets sick. Jack decides Linda got sick because Julie was selling tainted sandwiches and not because sandwiches go bad if you leave them out of the fridge for three days. Anyway, Julie's Deli gets sued for $100,000. The suit is clearly frivolous; any decent lawyer will get this shit shut down in a second. Unfortunately, decent lawyers make decent money and Julie doesn't have it. Since Julie was smart enough to incorporate, Jack and Linda can't clean out Julie's personal bank account like they were trying to do.

Such protection would accrue from either corporation type. The difference is, Subchapter S corporations make no money: all the revenue from the corporation is reported on the owners' personal income tax on Schedule E. Subchapter C corporations report on Form 1120, at these tax rates:
to 50,000: 15%
50,000-75,000: 25%
75,000 to 100,000: 34%
100,000 to 335,000: 39%
335,000 to 10,000,000: 34%
10,000,000 to 15,000,000: 35%
15,000 to 18,333,333: 38%
anything over 18,333,333: 35%

S corporations are REAL limited in how they can be set up--for instance, they can only have 100 shareholders and none can be corporate shareholders. Therefore, some corporations that COULD be S corporations elect C corporation status instead. I don't think rich people would open S corporations; if the company they run suddenly gets big, they'd like their buddies' companies to buy some stock, which can't happen in an S corporation.

[Raggz]

4. There will be no battle and nothing will change

Call me cynical but I doubt that this alleged battle is real. I think that our leaders have already decided and are staging the "battle".

[TomCADem]

5. Ah, Another Person Who Would Argue There Is No Difference Between John Roberts and Sotomayor...

Or, between Al Franken and Jim DeMint. Why bother to vote Democratic, when they are all the same? Makes you wonder why a person who has such a jaundiced view bothers to post on DU, since there really is no difference?

[Hekate]

8. There seem to be two of them, ping-ponging their ideas back and forth

One wonders if they are indeed "new" to DU, because it doesn't seem that someone with that kind of ax to grind would just show up here at this moment for the first time....

Or not.

Hekate

[dkf]

9. If Obama had done better at creating jobs we wouldn't be in such a sucky position of looking like we

Are prolonging or causing a double dip recession and needing to keep emergency unemployment benefits endlessly . The more I look at this the more I realize how we put ourselves in an unbearable position by insisting a pathetic health insurance bill go first. I think this is the mistake he may never be able to overcome.

Now we try to convince the economists that raising taxes benefits a stalled economy. Good luck on that one. We are on the wrong side of economic theory here. If only we were out if this recession we could have started working on inequities.

[Hekate]

11. Repeat after me: "It's not an increase. It's not a new tax. It's the old tax coming back."

[aquart]

12. No. Say, "We are a nation at war. We must tax like a nation at war."

Then remind them of the 80% tax in Eisenhower's administration. Suddenly these taxes will look very very light. So light, you need to suggest going back to the good old American way General Eisenhower did things.

Then quietly walk out smiling.

[pattmarty]

17. I don't want to piss on your parade, but exactly "who" are we going......

........to get to "remind them"? There are what, one, maybe 4 people in the media that will push this truth. The MSM has been "propagandizing" the masses now ever since st ronnie came up with his "voodoo" economics (given that name, by the way, by Bush Sr). Reagan's policies (if you can call "gutting" anything he did domestically a policy) are still seen as credible by most in the media. From bullshit like tax cuts cure everything from low wages to the common cold. So I agree with you, but try getting it "out there" so the rest of the country finally sees the folly of st ronnie.

[aquart]

48. "The masses"?

There's your problem right there.

[freezetx]

23. Let the Wealthy Pay for the Wars ... It's Their Property We're Protecting

The poor fight our wars to protect the lifestyle and property of everyone, but much more so the wealthy than the rest of us.

Serfdom was a better system, at least the Lords got on a horse and fought wars for their rights like real men.

Now they fight like Cheney and Gingrich.

[wickerwoman]

50. amen

and welcome to DU!

:hi:

[SharksBreath]

20. I guess you missed the Clinton years.

Like you missed the Bush years.

Taxes for the rich are at an all time low. Look at your country.

Taxes under Clinton were much higher. 23 million jobs created.

Like I always say. If you want to become a millionaire if your not vote Democrat.

Republicans don't create new millionaires. They just make millionaires richer.

Since the millionaires don't out number the middle and poor class I'm still trying to figure out how Republicans exist in this country.

Are their really 50 million fans of the rich in this country.

[No Elephants]

25. the Clinton/Republican Congress years may well have been the Perot years.

IOW, I have always wondered if Perot's jaw dropping showing for a 3rd party candidate in modern times did not send both parties a message about America's mood re: federal spending and the deficit.

[Hansel]

38. Or maybe Clinton was smart enough to figure that without Perot's rants.

After all, he's a very smart man.

[Hansel]

39. Republicans prevent people from becoming millionaires

by stacking the corporate laws against start up businesses. There job is to protect the rich from the rest of us.

[RUMMYisFROSTED]

64. "Are their really 50 million fans of the rich in this country?"

Think of it as people playing the lottery.

[RUMMYisFROSTED]

68. >sic

sic

[HughBeaumont]

66. Sort of.

Most of those 50 million dummies all think they're going to be rich someday, the lottery-long odds of that happening be damned!

[Hansel]

40. So you're buying media propaganda.

The reason that job creation is not any better is because Republicans have block every effort to improve it or watered down legislation that has passed to do so to be tepid at best. It's the result of an opposition party that screwed our economy up in the first place out of pure unadulterated greed and does not care anything about how it impacts the average American. Period.

Letting the Bush tax cuts expire on the wealthy is what needs to be done and the Republicans know it. They need to pay for the war they at started to try to expand their riches by using Iraq's resources. They are playing politics and they don't care about how it turns out for the American people. Without the Bush tax cuts in the 1st place, among his other results of his ineptness in governing, we would not be in as bad of a situation as we are in. And it's time to fix at least that.

Raising taxes on 2 out of every 100 Americans is hardly going to stall the economy. It's just going to mean that the wealthiest Americans might not be able to foot the bill for another vacation home or yacht or airplane. Cry me a river.

[laughingliberal]

56. I don't think the expiration of * tax cuts will hurt the economy but there should have been more...

done on job creation. The first mistake made was allocating too little for the stimulus package and diverting 40% of it into tax cuts. I realize, at that time, the 3 Republicans whose votes were needed in the Senate were able to have their demands met.

[waronbanks]

13. What outcome benefits the Corporatists

the most? What does the oligarchy want to see? They want the tax breaks to continue of course. Lets watch and see if they get what they want. It'll be fun.

[BumRushDaShow]

14. "The issue has generated little public attention this year"

Bullshit. Maybe not in the NY Times offices as THEY and their brethern were fooling around with the Boston Globe, Murky Murdoch, Palin's crotch, Lindsey Lohan, Paris Hilton, ACORN, and Balloon boy. The people knew that these expiring tax cuts were sunsetting this year and it would require Congress to do something to tweak it so that the top rate reverted back to 39%, the AMT was fixed once and for all, and the promise of cuts for incomes $250,000 and below woud be retained.

Whenever this subject has been broached, THEY shut it down in their effort to prove that the administration and the Democratic party either WOULD fail or had failed. Their continued misreporting, spin, and corporate whoredom underscores and exasperates the problem.

[pattmarty]

15. If the tax cuts get reinstated, I believe pretty much all is lost. This.......

..........should at this time be a fucking no brainer. We have huge deficits, two wars, crumbling infrastructure and 10% unemployment. I personally think that we should go back to pre st ronnie tax rates, close ALL the corporate loopholes AND tax churches, but that's just lil ole me.

[Vinca]

19. What's to battle? Pre-tax cut we were solvent. Now we're nearly bankrupt.

Plus end the wars of choice, fix the trade policies and we'll rebound in no time.

[SharksBreath]

21. Exactly. Pre Tax cut. No deficit. After Tax Cut. Shit hit the fan.

[wordpix]

63. also, pre-tax cuts jobs plentiful. Post tax cuts, jobs tanked. Tax cuts for richies have had 9 yr

of data to prove the point.

[No Elephants]

26. +1

[laughingliberal]

57. Exactly! How hard is that to figure out?

In fact, how hard is it to understand that the growing middle class came to a screeching halt when Ronnie sold the American people on his supply side scam and cut taxes at the top without requiring anything in return?

[freezetx]

22. Tax Shelters Abound For the Wealthy

Deficit Reduction Act 2005, GOP Congress.

Makes Medicaid Planning a wise move, if anyone knew about it. The ignorant? They're exploited.

The Wealthy? They pay no inheritance taxes this year. Ordinary folk? They must deplete all assets before getting long term Medicaid help for nursing home care.

Thanks Bushie.

And why do the Wealthy need Bush Tax Cuts? It's not like they don't have the best lawyers, accountants, and tax shelters already. Doctors' kids don't have Trusts, Roth IRAs?

The Corporations and their wealthy shareholders bleed the working man his whole life. THey tax your income, make profits from your labors, make profits from what you buy, take your money before Medicaid will help you, and now the Wealthy want tax shelters and no inheritance tax too!

This is a crooked game, a tilted playing field. If you're not working for yourself you're making the rich richer, and the poor poorer.

[No Elephants]

24. If I were running for re-election to federal office in November, I'd do my

best to figure out a way to let the cuts for the top 5% expire an infinite number of times--and make sure all my constituents knew it.

Any politician, Republican or Democrat, shilly shallying over the top 5% is either very rich himself or herself or way more concerned about donations than about votes.

[Historic NY]

27. Isn't this just another "Government Bailout" for the rich...tea baggers .

[mikekohr]

28. Trickle Down Tax Policy NEVER prodced the increased revenues they promised -See Graph Below-

?

[Botany]

30. False Flag argument over these tax cuts .... gotta keep them to save jobs

If these cuts are about Jobs then where are the jobs now? They have been around for 8 years.

[judesedit]

31. Let tax cuts for wealthy lapse asap. Use money to fix crumbling infrastructure, create jobs

Republicans don't care about the deficit, nor the country's failing condition. The deficit will be INCREASED if they regain power. They created this entire mess. DO NOT LET THEM DESTROY WHAT LITTLE HEADWAY WE'VE MADE. They want to take us back a century while they continue to fatten their own pocketbooks.

Democrats vote in droves.

[judesedit]

32. No battle. Vote the right people in and the right thing will be done. Let tax cuts lapse!

ASAP!! Use tax money from the wealthiest to fix country's infrastructure NOW! Most urgent threat facing this country is our obsolete, crumbling bridges, damns, levees, roads, sewer systems, drinking water systems, electrical grids, etc. etc. Don't let republicans fool you. They did nothing over the previous decade but decimate this country for their own gain. Vote these bums out asap! Or learn what suffering is.

[Turbineguy]

33. It seems only fitting

An uproar over an end to chaos.

Bush's work lives on.

[judesedit]

35. Not tax increase. Back to normal. People earning less than $200 thou paid less taxes than in decades

Check out the facts. Don't listen to the republican bullshit propaganda. Whatever a republican says you can count the opposite as being true. Democrats be sure to get out and vote. Vote absentee ballot. The GOP is trying to make you believe they can be tampered with. Well, the truth is they cannot be tampered with as easily as the electronic voting machines the GOP owns and is still able to operate in our sadly corrupt elections. They are used to winning by stealing elections. We must stop them NOW before we don't have a country left to vote in.

[earcandle]

36. So we will have the money for infrastructure, education, and health care after all! YEAH!

Elections are coming we're gonna get Liberal again woo hoo

[Odin2005]

43. The Fake Dems are gonna stab us in the back again.

[wordpix]

60. Conrad & Bayh leading the DINOs and Baucus as broker - doesn't look good

I say let these tax cuts become issue #1 for the mid-years. Let's watch the DINOs and Repukes stand up for the rich and their tax cuts. :popcorn:

Anyone opposed to tax cuts for the rich should win if they raise this issue.

[lakers4life24]

47. Administration needs to SLAPall Republicans With a 90% Tax Rate

to pay back all their Tax Cuts, Medicare Part D, two wars, TARP, and endless other legislation that they help to pass in order to benefit their Cronies and Lobbyists.

[KansDem]

69. Hey, I like the way you think!

And welcome to DU! :hi:

:dem:

[Hubert Flottz]

59. Time for the wealthy to pull themselves up by their boot straps

and "Support The Troops"

[happygoluckytoyou]

62. MONOPOLY... A GAME? it is time to redistribute the money so the game can continue

CAPITALISM IS LIKE A GAME OF MONOPOLY...
in fact it is where the game CAME FROM

the difference is that in MONOPOLY, around 2a.m. someone becomes the winner and we all go to sleep

in the REAL WORLD, the winners (Gates, Buffet, etc) eventually own everything and the other 99% circle the board each week for their $200.... which they then lose to the first property or tax upon which they land

HOW WOULD YOU FIX THE GAME.... TO KEEP IT GOING....
REPUBLICANS BELIEVE THAT IF YOU GIVE MORE TO THE WEALTHY.... THEY WILL TRIKLE IT DOWN ON THE POOR....

BUT THERE ARE BETTER CHOICES.... (think of the game itself)....
1) add another board... with opportunity for those not owning property to get some
2) give EVERYBODY 10000, which will MASSIVLY help the poor who can then group and purchase property
3) devalue the money (look out here comes massive inflation)
4) f the older workers and fixed income people (oh, did retirement age just start to go up)

SOMEBODY IS GOING TO FEEL THE PINCH.... AND THE POOR AND MIDDLE CLASS HAVE JUST RUN OUT OF MONEY

IF THE WEALTHY WANT TO KEEP PLAYING THE GAME, THEY SHOULD START TO THINK REDISTRIBUTION AS WELL

[sofa king]

67. Yeah, a real battle there, getting Congress to do NOTHING.

We all know how hard that is.

[defendandprotect]

70. We should be calling Congress and giving this a push . . . we also need to overturn

Reagan tax cuts for the wealthy ---

and the trade agreements which are a way for elites to "harvest slave labor

all over the world" -- !!

Watched part of the debate on C-span today but missed a lot of it --

and I forgot to call!!

Tomorrow, tomorrow --

[KansDem]

71. Why is there even a "battle?"

Who's going to come down on the side of preserving tax cuts for the rich?

Reaganomics and "Trickle Down" are frauds--they didn't work!

I'm tired of these Reaganites and hangers-on constantly promoting a failed economic theory...