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In his debut New York Times column, former Obama OMB Director Peter Orszag proposes a compromise on what to do with the Bush tax cuts.
In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.
Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.
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Sooner or later someone will have to pay for the debt.
Actually, this probably makes sense, at least for now. To raise taxes on the owners of small businesses right now could be a disaster, since they account for 70% of job hiring and 30% of the economy.
A two year extension would provide time for the economy to recover, and then a new tax policy that makes sense can be written in 2012.
Also, since 75% of the benefits from the Bush Tax Cuts benefitted the Middle Class, it would also be a disaster to allow all of the tax cuts to expire.
I would have no problem if they took out the extra 5 dollars a week I got with the Bush Tax Cuts. That is why the whole arguement for me is lame, because the Bush tax cuts did not really do much to help the middle class. I am for keeping the extra deduction that was in there for married people, but even that deduction did not amount to much.
Orszag is merely the most prominent Democrat to suggest this...there will be many more before the midterms, and when the Bush cuts expire, and taxes rise after January 1st.
He offers cover to Congressional Democratic incumbents, deeply worried about the pace of economic recovery...and deeply reluctant to impose higher taxes on anyone in the present economic environment.
We hear so much at this site about the deep divisions among Republicans...there is a fault line being created between Democrats on taxes.
Salt Grass "I would have no problem if they took out the extra 5 dollars a week I got with the Bush Tax Cuts."
The typical MIDDLE CLASS family saved about $1,800 per year in taxes from the Bush tax cuts, which amounts to about $150 per month. If you want to give that up, the rest of the American middle class will appreciate your sacrifice - just send the extra $1,800 with your tax return next year.
Now isn't the time for us to even "think" about focusing on the debt. We will always have debt. The top 2% of the wealthy shouldn't be allowed to hold this nation hostage.
The Bush tax cuts have cost entirely too much money and have only benefited those that are stagnating our economy and they are doing so because we've allowed them to do so.
Compromises with common sense is one thing. But giving in to BS is another. We need to clean house with the "Conservative Democrats" that are selling this nation out. It's healthy to keep some...but we have too many wolves in sheep clothing...
As far as the "Debt" is concerned, we must run high deficits in order to keep from collapsing our economy. I want to hear this administration and media put the REAL facts out. We are in a DEPRESSION not a frigging recession...
That word is used too loosely in so much that it's taken to be a not so serious thing.
Roy Wilson, according to the Center for Business and Public Policy, although many small business gross over $250,000 per year, under 2% of taxpayers actually make over $250,000 per year in small business income. Using hardship for small businesses as an excuse to extend tax cuts for the wealthy is a disingenuous argument.
Heartlight3 "Roy Wilson, according to the Center for Business and Public Policy, although many small business gross over $250,000 per year, under 2% of taxpayers actually make over $250,000 per year in small business income."
Now you're just playing with numbers?
According to the National Taxpayer's Union, the top 2% of taxpayers pay about 50% of all income taxes paid, and you want to increase their tax rate by 10% ? That's a lot of money that would not be available for hiring workers and spending on the GDP. And how would the government spend that money - on another "stimulus" bill for union workers on temporary construction jobs?
And then in two years, make the same argument, and extend them again, and pretend like it isn't blowing a whole in the deficit, and continue to blame poor folks getting unemployment checks for all of our problems.
Question for the esteemed Mr. Orzag:
How can you say that "no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned" when the stagnating job market occured WITH THE TAX CUTS IN PLACE?
Is there a JOURNALIST in America who can ASK THIS QUESTION please?
If tax cuts for rich people create jobs, how the $#@ did we end up with the second Great Depression?
Huh?
Geez Louise . . . I am sooooooo tired of RICH PEOPLE whiiiiiiiiining about things that THEY CAN AFFORD TO PAY while the rest of us go into DEBT just to got the freaking doctor!
All the pundits are rich, all the folks running the government are rich, and they are constantly whiiiiiiiining about some irrelevent, esoteric BULLSH!T.
Okay, I feel better now. ;o)
In 1970 the earnings of the top 100 CEO’s compared to the average worker was 45:1. Now it has grown to over 1080:1. In other words their pay has grown nearly 25 times faster than the average middle class worker. (Data as of 2008)
The cause of the crash is no mystery. The Great Depression happened the same way: a skewed distribution of income combined with a deregulated financial sector created a big bubble, and it burst.
You go Girl!
Here's another question for the 'esteemed' Mr. Orzag... why NO mention of how we're going to pay for the extension?
Oh... thaaaat's right... don't let the 'cat out of the bag' and remind everyone that we'll just charge MORE on the Chinese VISA card...
Exactly Nash !
Our esteemed MSM, with thier lovely 13% Approval, wants to tell us whats best for US.They keep spewing this Sewage, knowing People have NO CONFIDENCE, in what they print.
Funny Stuff Indeed !
Right on, Nash! The money we 98% have handed over to the capitalists and industrialists has NEVER trickled down to the middle class or the working poor. They quickly deposit their savings into their Cayman Island bank accounts and it is NOT fed back into upgrading equipment or factories or increased wages or benefits.
The 2%er's may as well steal money out of our wallets, clothes off our backs and food out of our mouths. And about half of us in America say, "Sure! Take all you want - here, Mr. Rich Guy, you missed a dollar. I know you have my family's best interests at heart, and if I give you my money, some day I'll be rich just like YOU! How about access to my bank account?"
There is none so blind as THOSE WHO WILL NOT SEE!
Wake up people! The Trickle Down theory has never worked in the history of this country, and it never will, because the impulse to keep money for oneself is stronger than the impulse to share.
As Rick said, EXACTLY, Nash. And no way will Republicans ever thank anyone for this supposed "compromise." If the tax cuts are allowed to expire, they'll howl. If the tax cuts are NOT allowed to expire, they'll howl. If a compromise is reached, they'll howl. And then, after a brief pause, go right back to their golf game at their cozy, private club. They never let a tax increase affect their golf game. It's much easier just to unemploy someone new. And then complain about those free-loaders collecting unemployment insurance.
Here's one way to stimulate the economy. Invest in ear plugs. I, for one, am tired of listening to the empty howling of the clueless, selfish, solution-free right wing.
Amen, Anna Molly. The Republicans are not interested in compromise about anything in any form or fashion. They are only interested in halting President Obama's agenda and turning him into a lame duck president.
THAT is the sum total of their vision, mission, plan and agenda.
Why do we try to fool ourselves into thinking otherwise?
The job market isn't stagnating because of the tax rates--it is stagnating because large companies are recording higher profits and paying their executives larger bonuses based on stock price performance rather than hiring more workers and fueling long-range growth. And small companies can't get loans to grow their businesses. A change in the tax rate won't change that.
Great post Nashville_fan, you never disappoint!
Did Mr Orszag get his job in the WH under the President's effort to include republicans in his administration?! Why did we have someone who thinks like this working for this administration?! God please help us..
Gail--you are so correct. All the Republicans care about is savaging President Obama so they can take back the White House.
No, it won't, Steeler Fan, but I do predict an uptick in demand for corporate jets. And every one of them will need a refrigerator. And that in turn will stimulate the refrigerator industry, providing jobs to average workers ... in China. THAT's the republican idea of stimulus.
And the reason they want to take back the White House is that it's even easier to do nothing when you control everything.
Why would any American want to give the Congress and White House back to the party that gutted our manufacturing jobs by sending them overseas? And who thinks they wouldn't do it again if they thought they could save a nickel?
They don't care about you or me, or the United States! They only care about increasing profits and will do ANYTHING to make that happen!
WAKE UP!
I won't feel better till the tax cuts for the rich expire. Your right about all these guys being for the tax cuts because they will have to pay more. I don't hear any real argument that can support the cuts for the rich. They don't create jobs with their savings. They may hire an extra yard boy, but they are probably illegal anyways.
Tax cuts never blow Holes in the Defict.. Congressional Overspending is the problem. Period
Tax cuts for the top 2%, i.e., "Millions for Millionaires," only line THEIR pockets. Period.
Enough of the damn compromising with the Repubs. The tax cuts were to be extended for those making $250K or less. If people are too stupid to understand that extending the tax cuts for the rich will only create greater deficits, then that's too bad. Stand for something! As I have said before, you would think the Repubs won all the elections in 2006 and 2008. God help us if they take over the house and/or senate. Talk about stalemate and redistributing the wealth!!! And the t-partiers don't even know they will be getting screwed. Enough compromise. Extend the tax cuts for those making $250K or less, and let them go back to what they were prior to Bush.
Even though they created the unemployment mess, the lesser people obviously do not deserve unemployment or food stamps now that they have no jobs and none are being created, thanks to the obstructionist Republicans. They would love to take us all down the tubes, and when the t-partiers are walking around asking where their privatized 401Ks went, or the huge fees by banks on all services, and half the gulf blows up thanks to deregulation, we should just give them a good swift smack across the backside.
Cathy..
We Got Screwed when the american people elected the Failure that is in the White House now.. please do us all a Favor and get over him already..
and Gail. You seem to be so Jealous of the fact of people that make more then you do. I dont understand this. I understand that you expect them to provide you with the things that you refuse to provide yourself and or are to lazy to provide for yourself. I am sorry that you feel so inadequate about yourself that you dont think you can do these things on your own. But if you would stop listening People like the Democrats and Obama, and started staying busy you would find that the sky is the limit as to what you can earn.
Steve, you don't know me and you have no idea what you're talking about. I make plenty and want more people to make plenty, don't you get that? Why do you defend the indefensible?
Gail,
I would never Defend Obama and his Failed Polices, so dont accuse me of Defending the Corrupt man... Or the Corrupt Democrat party, I dont stand with you ..
Steve, let's agree to disagree. I will continue to look for common ground with you, and hope you will do the same. Enjoy your evening!
Any time I hear someone say that they want to extend the tax cuts for the rich, but we need to stop paying unemployment and cut Social Security because of the deficit, I want to shake someone. How can anyone be so hypocritical? And how can anyone who is not a millionaire buy into that when it is such a blatant case of taking from the poor and giving to the rich? I hear so many complaints about "socialists" and 'redistribution of wealth" but why is it fine to do it if the redistribution is upward?
So what you are saying Heartlight is that you want to Take money from the Rich and give it to people that didnt plan for the future.. that expended all of their unemployment and got an extention 3 or 4 times. .. We understand you are for Redistrubing wealth, but wouldn't it be better if people just didnt buy all the things they Wanted and instead just bought the things they needed.. its not Redistrubution to allow people to keep the money they earn. What is Wrong is the Democrats always pitting some group agasint another group.. IE. Rich agaisnt poor.. White Against Black, Employees agaisnt Employers.. Union against Non Union. Illegals Against Legals.. Democrats spend most of their Time always Claiming somone is victimizing another. ITS OLD
No, Steve, you want to take working people's money and give it to the rich.
I have a conspiracy theory. I came to it tonight watching some of the t-partier statements. The corporations and the filthy rich, especially the Koch brothers, Dick Armey, etc. put forth the t-partiers as candidates because all that I have seen are really beyond the pale, they absolutely have no clue. And if or when they get elected, then the corporations/filthy rich will have their puppets all in place, who know nothing and do not have the brains to know anything, and then they will have their strings pulled by their puppet masters, the corporations, and of course, the only entities that will benefit will be the corporations, and not the people. I have never been a conspiracy theorist, but if you can't see through this mess, then there have been no conspiracies, ever.
Nashville Fan - I agree, I am so sick and tired of working to make someone else rich! It might be different if they gave a rats patootie about those of us doing the work, but it seems the richer they get and the harder we work, the less they care about those of us actually doing the work.
The rich treat the middle class like mushrooms. they keep us in the dark and feed us SXXT
LoL I just call that manure.
You know the Dems are totally out of ideas and getting nervous when they start advocating for Republican ideas like tax cuts to get the economy growing again.
Orzag.
Barry's plan to allow immediate income tax deductions for businesses investing in plant and equipment.
Next thing you know, they'll be wanting to eliminate the death tax.
LOL!!!
Ever hear of "compromise"?
Of course not...as a follower of the G-NO-P you must believe in their mantra..."If you don't agree with us completely you are unpatriotic!"
Joey from Albany, the republicans have not had a new idea since 1980.
Nashville Fan
If tax cuts for rich people create jobs, how the $#@ did we end up with the second Great Depression?
Huh?
Dittio,
It would not be worth it. I suppose if the President does make that move to the center, he'll still be a radical leftie in the right's point of view.
He is already where the center right was during Clinton's administration, yet they still call him a radical leftie.
The stagnating jobs market has a lot to do with U.S. jobs flying overseas so these American corporations can show a profit to the bottom line. Then those "patriotic" CEO's get to "collect" their golden parachutes by outsourcing a precious resource that would help eliminate the deficit by INCREASING TAX collections--workers PAY TAXES!!
Let's enact a tax policy (with some teeth) that would reward corporations for bringing those manufacturing jobs BACK HOME... as long as they were permanent jobs and not simply temporary ones to get the tax benefit.
And the G nO P blames unions for sending those jobs overseas. Companies send them overseas and get tax cuts in the process, union members lose their jobs along with the nonunion workers in a company.
Little known tidbit is that when the Obama administration loaned GM and Chrysler money, one of the requirements was that no more jobs would be shipped overseas--this did not preclude any previous plans those companies had but it does impact them for now.
The GnOP would never pass such a tax policy. You watch. They'll fight it to the bitter end.
Rick, good catch on the 13%, thats down from 20% the last time I seen a poll on that. Here is an article from MMFA about the media spin.
How the Senate's-in-play storyline was born
September 07, 2010 10:21 am ET by Eric Boehlert
For the record, I have no idea how the midterm elections will turn out regarding the final Congressional head count after the November ballots are counted. Then again, neither do journalists. But that doesn't stop them from painting doomsday scenario for Democrats.
And the latest, doom-iest scenario of all features Republicans winning control of the U.S. Senate this year. For that to happen there would have to be an historic collapse of the Democratic Party between now and November, with Dems losing 16 of 18 competitive races nationwide on Election Day, which is why, up until recently, the press shied away from speculating about Democrats losing the senate.
But that seemed to change over the weekend when National Journal columnist, and full-time campaign-watcher, Charlie Cook published "The Senate's In Play," which lit up the blogosphere and Beltway newsrooms. Cook's column suddenly seemed to give pundits and reporters a green light to openly speculate about an electoral Armageddon facing Democrats.
Yet if you actually looked at Cook's work, that didn't seem to be the case. Yes, he published a very blunt, link-friendly headline ("The Senate's In Play"), clearly suggesting Democrats were in danger of losing the Senate in November. But in the end, Cook hedged his bets, suggesting Republicans couldn't actually pull it off. "The odds still favor Democrats holding their majority," Cook wrote, adding it was "fairly unlikely" that Republicans would prevail.
So the senate's not in play. But it kinda/sorta might be? (Of course it might be.)
What exactly was the point of the "The Senate's in Play" column? That, I don't know. But I do know the affect of the column-- journalists loved it and have used it to bolster the Dems-are-really-doomed storyline.
For instance, look at how the WashPost references Cook's column [emphasis added]:
Note that the Post claimed "handicappers" (plural) are now saying the senate could flip. But the Post only referenced a single handicapper, Cook. And it turns out that not even Cook thinks the GOP will win the senate. According to the Post, Cook predicts the Republican effort "will fall just short."
So if Cook doesn't think Republicans will win the Senate, who thinks they will? And why does the Post point to Cook as a handicapper who claims the Senate is in play?
Simple. Because Cook published a column headlined "The Senate's In Play," and the press loves that storyline.
I get SO irritated with all the scary media stories about the Democratic armageddon coming in November. I would surely like to see a huge November surprise for the Repubs. We could do that, you know, if everyone would just get out there and vote, and bring all your friends.
I don't think we're all going to sit back. Just because the Repubs have done a lot of screaming, hollering, lying, and of course the press wants to run the show, does not mean that the Democrats are going to sit still. I don't know about any fellow Dems, but I am p!ssed and angry. I am angry at the lies, the hatred, the divisiveness, the dream that America is being crapped on by the Repubs and the t-partiers. Running for elected office has become a joke because of them, they have allowed the t-partiers to hijack their party, and their good common sense. Hell, no, we won the election, why would we have been crying and screaming like the t-partiers and Fraud News. We've been waiting for the election. What should we have been out there screaming and crying and spewing hatred about?
I hope all those that voted in the last election vote in this one. I know I intend to get out as many people as possible. These jerks need to stay out of office, they are no help to the American people. They have hoodwinked and bamboozled the low information, ignorant and frightened people who want to find someone to blame for their situations, and so they will pick on anyone who is different than they are, gays, blacks, hispanics, muslims, the list goes on and on. They want someone to hate, and they want to divide us all. Don't fall for it.
The rich get richer, the poor get poorer, and the middle class just struggle to live pay check to pay check, a perfect recipe for disaster!
The Dems have allowed the tax debate to become: raise taxes and hurt small businesses, rather than: we need to start addressing the deficit NOW. They should adopt the GOP's strategy of NO: demand the middle class extension, and pay down the deficit, or nothing at all. What do the Dems have to lose - they are getting clobbered anyway. Maybe for once, they can do the right thing even though they are getting tossed out. The fact that this even being discussed shows how far we have fallen and devolved till we are little different than the chaotic governments of post-war Italy. Anyone for a Fiat?
I disagree.
That last thing we want to be is 'Republican lite'.
If the Democrats acted, fought, and governed like Republicans, what is the difference? The mere fact we are discussing this issue shows that there IS a difference between the Democrats and the Republicans.
Sometimes people have to THINK about what they are doing. Americans can burn their hands as many times as they want before they 'get it' (or run out of hands).
Democrats need to stand firm on their beliefs and MAKE the Republicans do something about it.
Hello Pat---you mean what few middle class who are still around, don't you? They are paying the price and many of them seem to be voting for the privelege of doing so.
STOP with the freakin' compromises! It has wrought us NUTHIN'!!!! Go forward with a good plan and dare the opposition! I AM SICK OF COMPROMISING! THEY have stuck to their message of "NO", "NADA", "NUNCA"!!! We have waivered and weasled and compromised ourselves to DEATH by kindness! STOP IT!
Juanita - the only reason why they HAVEN'T gone forward with a plan sticking it to the Republicans is because there are many 'Conservative' Democrats in the tent.
I would prefer Senate democrats force the republicans to vote against extending the cuts for 98% of Americans and pound that point day after day. Force republicans to defend voting against tax cuts for 98% to save those affecting only 2%. Second, I would extend the cuts for one year and get this out of election year politics. It is always going to be an election issue but in off-years, they could actually have a chance at a reasonable debate.
The problem Orszag is most likely referring to is Blue Dog Dems who will fight along with the GOP to include the richest 2%.
But, Jody, if the Repubs do pick up a lot of seats in November, wouldn't they just vote to extend them again next year? I do think they should have to defend voting against extending them for the 98%, though.
Off, subject, I want you to know that I greatly appreciate your well thought out comments. I always look for your name because you articulate my thoughts so well.
No wonder cook says the senate is in play. He knows the Democrats don't have enough guts to stand up for what they believe. They'll cower down to the republicans once again on extending the tax cuts. This is the most pathetic bunch of Democrats I've ever seen.
BTW: Charlie Cook was 65% wrong in 2008 and he'll be wrong in 2010. You can count on it, he's relying on the same polls you see here every day. I'll state it again.
I was a part of one of those polls. Here's how it went, the pollster said he wanted to ask me four questions, the first was are you a registered voter, I said I was, the next question was are you a Democrat, Independent or republican, I said I was a Democrat, he said thank you and hung up, I guess the other two question weren't important or he didn't think he would get the answers he wanted, I guess I'll be counted as an undecided. This is the kind of polls everyone is relying on for their predictions, not vary scientific is it.
I've been watching that CQ Cook dude on tv for a while now. I don't know what his political leanings are. I know one thing - he hates the President's guts. I've seen his veil drop a few times. He ain't fooling me one bit!
All pundits seem to revere him but he's as fake as they come.
if you want to bring down executive pay just tax any multiple of the average worker say 10 times the average at 90 percent over that number whatever it is.
Good point. Looking at history, when taxes were high for the wealthy, CEO pay was in better proportion to the average worker and the economy hummed along pretty well. The 1929 crash and subsequent Great Depression is proof of what happens when the rich become too powerful; 2008 provides a nearly identical scenario. The only difference was that FDR and democrats put into place laws that protected the average worker--FDIC protection on money in the banks and unemployment insurance to name a couple.
What should trouble people is the fact that as the middle class declines in size and disposable income because their jobs have gone elsewhere--sooner or later the middle class will not be able to buy the products those companies make no matter how cheaply they are made. China, India and other countries are beginning to demand higher wages, how long before US companies realize they have gained nothing but hurt the US economy in the process.
By that time the CEO will be retired with a golden nest egg. It is all about short term profits.
Funny, When I said the same thing a couple weeks back I was blown out of the water because I'm just a Nay Saying Republican. Not sure I'd sunset the cuts in 2 years so much as revisit the issue and see where we are economically. I loath the idea of a tax hike, the government clearly isn't capable of managing my money better than I am, but the spending spree we've been on for the last 10 years is going to require tax hikes or some other form of creative math. I'd prefer to see a lot of waste cut from Washington's budget before we start reaching into tax payers wallets but I see the writing on the wall- it's coming. But I KNOW this is not the time for it to start. You can't increase demand by taking more disposable income from the hands of those who still have it. Extending the tax cuts for the short term is the best way to keep the money where it will do the most good.
And all evidence to the contrary should be ignored?
The tax cuts did not work as a long term economic stimulus or job creator AND they increased the deficit.
What is the up side?
Suzy, Although I do not agree with your conclusion, I do like your reasoning. I also see that you acknowledge that we have been on a spending spree for 10 years and you are looking at what disposable income do we have to play with. I posted on this a few days ago and I submit that our disposable income - as a nation - is LONG gone.
I think the best thing would be to have some BALANCE when it comes to paying taxes. I, like you, don't like to pay taxes, but I don't mind paying them if I can afford the taxes being paid (in most cases, I come out of pocket for a few hundred dollars). I made sure that my W2 was in BALANCE with my living expenses v. taxes taken out of my paycheque.
With that being said, I do NOT think that the Bush tax cuts should countinue in its present form. I think the President is correct in having the middle class maintain the current tax rate (as they can afford it) and let the rate(s) for the higher income group(s) expire. This was what President Clinton did in 1992 when he was able to get his bill passed by 1 vote. There was much grumbling and gnashing of teeth by those who had to pay 4% more, but the result was that the economic issues eased a bit with the extra revenue.
As far as waste is concerned in Washington, that is in the eye of the beholder. For some, Social Security is waste; for others, the war in Iraq and Afghanistan is waste. If we can reach a consensus as to what 'waste' is, we can better determine what to cut.
Nash, explain how less take home pay is going to help right now. As I said, I fully realize that there will be higher taxes coming- irksome in that I think much of the spending that's lead to the necessity was, well, unnecessary, but I understand it's coming. The logic in the timing is what I question. The economy will improve as demand increases. Demand cannot increase when fewer people have discretionary income to buy with.
Pietro, a fine point regarding waste. In my case I'm going with the redundancies that exist within the federal government, massive occurrences of fraud within many of the social programs and welfare as a career choice instead of a hand up in troubled times. Even if you want to accuse me of showing my evil republican side with that last one, I think addressing the first 2 would go a long way in easing our budget crisis.
Suzy,
The tax breaks for those making $250,000 would be preserved, so I don't really get your point about "less take home pay".
The top 2% of income earners in this country are not going to go broke because their taxes go up by 3%.
Seriously.
Suzy wrote:
Suzy, I am NOT going to accuse you of anything. I think that we just disagree on what constitutes 'waste'.
However -
I will agree with you on the redundancy issue you brought up in your post. I think that I can support your contention of having one (or fewer) agencies that do the same things.
I can support rooting out and eliminating massive fraud ONLY if that policy is applied evenly across the board. You will be suprised at how many 'legitimate' corporations do fraudulent things that cost us all money.
The last issue about the welfare - I must admit that another conservative poster, Soldier's Dad, had an idea that if people are on Welfare, they should be working for the municipality/state that they get their welfare from. At the time of the posting, I was not sure about it and I questioned him about his position. I also had a really good conversation with an independent about this situation as well.
The bottom line is this - I can support a WPA-style program with the provision that the recipient gets a small work stipend that he/she has to pay taxes on. The rest of the monies they would get as normal to pay for food and lodging. I also mentioned that with this stipend (remember that the recipient has to work for this as a part of receiving welfare), there is opportunity for that person to work overtime to build money for themselves. Yes, they would pay taxes on the amount that they have EARNED. Yes, a person could be in a job that suits them and could eventually become permanent and OFF welfare.
Now, I haven't worked out all of the kinks in this plan, but it will be a means for a person to get OFF welfare if they are on it. They are not trapped on welfare, as many people are. I would go as far as to say that on-the-job-training could be offered as a part of the program.
Well, its a start.
Soldier's Dad, wherever you are, thanks for the idea. I have always said there is more that binds us than divides us, and this is a prime example of that concept.
First and foremost, until there is actual legislation passed that says those making less than $250k see no increase, I'm not willing to take the promise as fact. Been burned too many times. Second, I guess I come from the school that says we should all pay our fair share. The top 2% carry 50% of the tax burden already. The bottom 50% pay nothing. That doesn't seem fair to me. Third, most of the people who will be affected by the 3% hike aren't living so high on the hog that they won't feel the effect. They already are. Don't believe me, talk to someone in a service industry. My hair stylist has seen a sharp decline in her business because haircuts quickly become a luxury in a down economy. Talk to a landscaper and ask how their business has been in the last couple years. In my area, there are a good number of people falling into the supposedly rich top 2% of earners and they've cut back- cutting the lawn instead of paying for a service, deciding that color or manicure isn't really a necessity. OK, your heart may not bleed for their "suffering" (mine certainly doesn't), but the people who provided those services are feeling the hurt and no band aid is big enough to heal it when more money is taken out of the hands of the consumers.
And frankly, I'll add fourth- I'm really tired of being told I should smile and pay my fair share by people who've virtually exempted themselves from paying anything at all. Punish the workers with a higher tax burden and reward the elitists with cabinet positions. Great plan.
Pietro, now there's some creative thinking I can agree with 100%! Anything we can do to encourage welfare as a temporary solution benefits society as a whole. As a general rule, people take pride in a good day's work. I think a program such as this would go so far beyond the economics- it reintroduces community pride which should reduce crime rates, improve education, the whole 9.
I'd agree- time to look for the things that bring us together through rational conversation instead of constantly standing on our differences.
Okay...so compromise with corporate America and they start hiring, media starts being more favorable to the Administration, polls start showing favorable ratings and we get stiffed...
Corporations run America and we're just slaves that only receive pennies for our labor. So what do we do? Bow to them and watch our economy spring back? Or stick to our guns, take our medicine (no jobs, no instant gratifications-- quick fixes, fake lifestyles) by demanding that we receive equal treatment?
Aw hell...if we did that then we'd call President Obama a do nothing President; why we would demand to see instant results know damn well that we are in a depression.
Mr. President, Senators, Congressmen...TELL it like it is. Americans need to know the REAL facts about our economy. I called this crap months ago. We were in far worse shape than many knew about and I think that it's about time that we get the REAL FACTS and no window dressings.
Republicans can't and won't do a damn thing to fix it...hell...they fix us up real good already....didn't they? A bird in the hand is better than a thousand promises in the BUSH.
Good day.
Good to see you around Anita . . . Welcome back! :o)
Good to see you posting, Anita. You are so right that it is the instant gratification that makes it impossible for people to give the economy time to turn around.
Hey, welcome back, Anita!!!!!!! I echo Nash...it's good to see you here!
There's my GF!
Welcome back Anita - as usual you make one he!! of an entrance! lol
Hiya Nash! Ginger! Steelerfan and RED! LOL!!! So good to be back!! I couldn't take it anymore! LOL!!
So good to be back and thank you. I just had to respond to your comment Steeler Fan. Untill America starts acting like adults as opposed to stupid spoiled children; our nation will continue to suffer as we are. Hind sight should be 20/20 vision.
The Republicans did this once before (the Great Depression) with their SAME ideaology...it didn't work then and it didn'nt work now...it WON'T work in the future; that is...if WE have a future.
If we keep electing the same posion in the White House we will forever be in this mess and eventually self distruct. Didn't the Bush Administration SHOW is that?
President Obama needs to give a stern speech with facts and figures to America. It high time that we get a dose of reality. Americans have been babied...we have an entire generation that have been sheltered and taught that "they shouldn't be inconvenienced" They are brats that vote for selfish reasons...they're giving their lives away (selling their birthrights for material gain).
Instant gratification and addiction to the last drug is a hard habit for them to break; but break it we must....:)
Finally, an adult on the Dem side that recognizes increasing taxes right now -- for anyone -- is a dumb idea. I think that's what Herbert Hoover did back in the day, but can't personally confirm that.
The standard leftist argument that the Bush tax cuts currently in place haven't helped fuel a robust recovery ignores the fact that this wasn't a normal recession and we're not in a normal recovery. Tax rates could be zero right now and businesses and consumers might still be hunkered down until the dust settles and everyone gets more confident about the future. But confidence today is fragile at best and at the very least confidence wouldn't be helped by raising taxes in such a difficult environment.
But there's another portion of Orszag's piece this morning that was of interest to me. He kind of tiptoed onto the third rail of American politics:
"...Medicare, Medicaid and Social Security will account for almost half of spending by 2015. Even if we reform Social Security, which we should, any plausible plan would phase in benefit changes to avoid harming current beneficiaries..."
So, all the leftists around here who are in denial about the financial strength of the Social Security program will now have to explain why they don't think there's a problem while Obama's respected former OMB director does. And Orszag isn't talking about a superficial fix: the phrase "phase in benefit changes" is code for benefit cuts. The question is, do we take the term "current beneficiaries" literally to mean only those folks collecting Social Security today? Or might there be some wiggle room there to include the impending beneficiaries of the baby boom generation? Inquiring minds want to know. Because many of us think cuts to baby boomer Social Security benefits are inevitable.
C'mon, Bill. You can do better than that.
Since when does 'phase in benefit changes' mean benefit cuts?
Reforming Social Security is definitely the 'third rail' of politics. What SHOULD have happened is that the Trust Fund should have remained SEPARATE from the General Operating Fund. I'll even go as far as to have SOME limited investment in America (munis and utilities) with those funds, especially when they are going to be repaid by the cities that benefit from them.
No matter how hard you try, Bill, Social Security is NOT going away and it is NOT going to be invested in the Stock Market.
Bill,
We "leftists" agree that there is a problem with Social Security . . . and that problem is folks making millions of dollars only paying into the system for the first $102,000 of their income . . . which is arbitrary and ludicrous.
And you still conveniently avoid the question about what are we getting FOR the tax cuts to mitigate the huge addition to the deficit?
Do tell.
Easy. Money in people's pockets. We aren't in a situation of "stimulating" the economy so much as we are trying to avoid further depressing it. Congress has been on an even bigger spending spree than the average American was during the 80s and 90s. We are now seeing the consequences both personally and as a nation. How is the idea of letting people keep the money they make any more ridiculous an idea to improve the economy than passing multi-billion dollar "stimulus" bills on borrowed money? The hole we are in gets bigger either way. One option gives people some power to change it, the other means they lose more of their income to the government's discretion.
Suzy,
The top 2% of this country already have money in their pockets, more than they can spend. So why should I go into debt to give them more?
Suzy, in this case, we are looking for some PARITY in who enjoys tax cuts (or pays taxes). Right now, if we look at PARITY, we see the middle class shouldering a tax burden that is really a burden, as opposed to the top 2% whose tax burden is not.
When Warren Biffet says that his secretart pays more in taxes than he does, and he has a LOT of money, then there is something wrong with that calculation. That is my point. If the tax rate goes up from 36.5% to 39%, for a rich person that is pocket change. However, for a middle class person, that is a significant amount to be concerned about.
I think that most rich people would not even know of - or care about - that 3.5% more they are paying in taxes if the tax cuts expired if their accountant didn't tell them.
On one hand I don't disagree Pietro. It is wrong that Warren Buffet can crack jokes about paying less in taxes than his secretary. But I also think it's wrong that 50% of our population pays no taxes at all. To me this speaks to the issue being with our tax code, not in the "fairness" of who pays how much.
I also think the $250k threshold is a little unfair. This represents a large number of people who aren't living anywhere near the "Warren Buffett" lifestyle- small business owners who's "on paper" income is often vastly inflated over their actual cash in pocket take home pay and people whose housing costs eat up a huge chunk of that income. I'm not saying we should feel sorry for them, necessarily, just that this 2% number covers more people closer to "Average Joe" than it does Hollywood jet setter. I agree that most "rich" people aren't going to feel an undue burden from a 3.5% increase but most earners in the top 2% are not "rich", either.
Suzy,
I want you to really think about what you just wrote . . . most of the earners in the top 2% in this country are not rich?
What are they then?
And you are concerned about the 50% of our population that does not pay income tax? Are you concerned that half of America does not earn enough money to pay taxes?
I think the word is the "working poor" . . . you think taxing the poor is the answer?
Thought about it. Haven't changed my mind. The top .1%, definitely Rich. The top 1% yeah, I'll give you that, but the next 1% is a lot of people in the $250-300k range. Sure, quite comfortable, but for the most part, not rich. My bosses fall into this category- not a new car between them in the last 7 or 8 years (and the only new car was a Honda Accord. The rest of them drive used cars. Usually for years). Houses in the same middle class neighborhoods as the rest of the staff live in. Probably less credit card debt than the rest of us but otherwise, not much different. These are the people you want to punish for their success.
And yes, I think it's equally wrong that half of our population pays nothing. They drive on the same roads, send their children to the same public schools and rely on the same military for their safety but they pay nothing for it. That seems a tad off to me. I think taxing everyone equally is a far better answer. That and an expectation of our Government to live within our means
Suzy,
If 50% of Americans do not pay income taxes, and only 10-15% of them are currently unemployed, that leaves a solid 30% of Americans working a job that doesn't pay a living wage.
How is that there fault?
What is the remedy you propose to get these folks paying income taxes other than INCREASE THEIR WAGES?
What have they done wrong?
Love to hear your thgughts.
Letting tax cuts expire is not a punitve measure - that is what they were DESIGNED to do.
I would rather my taxes go back to the rate they were before the tax cut than blow a whole in the deficit financing tax cuts we can't afford for folks who are doing just fine.
That's just common sense.
I accept that there are a lot of Americans working jobs that don't pay a living wage. But it's not 30%. There are a lot of Americans working jobs that pay a living wage who do not pay income taxes because of credits and such that reduce their federal liability to a negative number. I have a few friends who fall into this category. Sure, nice for them that Uncle Sam pays them for services used but is it fair? My point is that it's no more fair to expect 2% to fully support 50% than it is for 50% to utilize services for free. I believe a tax code that "punishes" all equally is a better option. Call me selfish if you want but it's gotten beyond frustrating that I am constantly told I need to pay my "fair share" in order to increase benefits I do not qualify for. I am not complaining about paying for emergency services, roads, defense, or, to an extent, public education. I object to paying to bail out people who made bad choices and got themselves into more debt that they could have reasonably afforded to pay back even without a tanking economy. I object to a government that treats taxpayers as a bottomless piggy bank for endless spending while telling us we need to cut back during these tough economic times.
As for you being willing to pay more in taxes, I bet Uncle Sam would welcome your donation.
The fact that Obama hasn't forced the debate already is clear indication that he has no stomach for this. And if he doesn't, then the Dems in Congress won't, either. If it isn't forced now, it will be too late to make it an issue to benefit the Dems. Later on, before the election, the Dems will just take the safe course and extend all the cuts, figuring they can't be damned for that. Under Bush, the Titanic struck the ice berg. His response was to put ice in everyone's drinks. Now that the ship is obviously sinking, the Dems fear that all will be made worse if we stop putting ice in the drinks.
We've had the cuts for 10 years. The Republicans put a limit on the cuts because they knew this was a way to fill the pockets of their rich buddies in the short term but had to cut it off before the country was bankrupt. The problem is they guessed about three years too late and bankrupted the country. How can an argument be made to keep the cuts as a way of stimulating the economy when they've been in place 10 years; the deficit is a trillion more because of it and the economy is in the tank. How could anyone say they made America better? A few Americans reeped the windfalls; the average American now has to pay for it! I hope Americans can realize they're being duped into returning to power the people that got us here. Extending the cuts 2 more years is crazy!
Great post, Old vet. This is one of the reasons why I do NOT think that the Republicans will take control of ANY chamber of Congress. However, it is still early...
The tax cuts for people making over $250,000 never created any jobs, they just used the extra money to invest in Corporations that sent all our good jobs overseas. Not allowing the tax cuts for the wealthy to expire is a loser for the Dem's, it won't draw any wealthy to the party, but it could drive their base farther into disgust. The sad fact is the wealthy rule this country I don't even know why we are allowed to vote, and if tomorrow we were told that commoners were no longer allowed to vote what would change, not one damn thing, the tax cuts for the wealthy are here to stay I wish they would just shut up about it.
How did our country become overrun with losers? Hey losers, if you don't like your job, if you don't like people making money off of you, then open your own business! Nobody forces you to work for somebody else. Nobody owes you their money - no matter how rich they are! You guys are so pathetic... And how did tax cuts cause a depression? Cause guess what - we didn't spend any less, so it's not as if the tax cuts deprived the "job creation engine" of our economy, the federal government, of any spending ability. Any another slightly inconvenient fact - tax revenues to the Federal Government actually increased after the tax cuts. So, you pathetic losers can bemoan the fact that the rich actually get to keep a little of their own money, but it terms of it wrecking our economy - it's just more jealous class warfare rhetoric! May the entreprenours of this country continue to withold jobs to such a pathetic populace. May every Obama voter and Union member, know the joy of not having to answer to mean rich employers any longer. Move to Venezuela, and sit on your butts and do nothing, just like you dream you could do here... Enjoy the November bloodbath losers.
News flash Nashville fan. You may not know how taxes work, but you're not actually giving the rich a single cent when they get a tax cut. Believe it or not, their money isnt' actually yours! (Wow, private property - what a concept) So, when the government lets them keep more of their own money, it doesn't cost you anything except for the sleep that you lose at night knowing that somebody has more than you. What did you do to deserve the fruits of their labor?
I wish that so many could actually realize how little the tax cuts that help so many of us had as an impact on the debt we now face as a nation.
Stop looking at the past and blaming (even those many past leaders that deserve it) and look at the here and now.
Why not get things fixed NOW? Fix the trade deficit. Fix the drain to everywhere in the world but the people here paying for it. Fix the drain of the filthy leaders who waste so much money. Why not cut what does not help our economy?
Why? Because the crooks running this country do not care if we can feed our families as long as their vacation is payed from our pockets. Every president and congressman in the past 2 decades should be put on trial for treason for crimes against the USA.
Although I agree with your posting Tim I can't help but apply a little realisation to it. This Administration can't FIX everything in one or two terms and President Obama hasn't been given ANY recognition for what he has accomplished already.
It will take several Administrations of fiscally responsible leadership to fix what has happened to our Nation over the years. Many Americans are whining now about this depression we're in. They want instant gratification and results that took eight years to destroy.
President Obama hasn't been in office two years and already the complaints and cries of the irrisponsible (media and Republicans) are already attempting to cry foul over their piles of dug they've created.
Go figure...we are our own worst enemies...We should be cheering instead of jeering. President Obama is doing an excellent job consider where we were and I agree..."every President from the past 2 decades should be tried for treason" because of what they've placed our country in.
It is truly scary to see how uninformed and ignorant most of you are. For starters, it is not a 3.5% increase, but 13%, PLUS a 33% increase in capital gains, PLUS a new 3% tax for healthcare reform. From the idiocy of many of these comments, I doubt most of you even know someone making over $250k so quit claiming that they don't need the money or won't spend it.
As a few peopel astutely pointed out, the government isn't giving the rich a thing- a tax cut means they take less of my money. Income taxes are a revenue item to teh government so bringing in less money isn't a cost, unless you think all retailers holding a sale view it as a cost as opposed to lower revenue, offset by the expectation of changing the behavior of the buyers.
What is fair? 47% pay no taxes and the top 1% pays 40% of all income taxes, but only earns 22% of the income.
Please learn teh difference between wealth and income. One does not equal the other, and there is tremendous turnover within the top 1% over a period of years. People move up, drop out, etc so the group is NOT constant. A retired couple with a $5 million nest egg may have income of just $100k, which is all they need to live on, while a young family of 4 may have income of $300k but no savings, a mortgage and college debt.
The middle class can't disappear, by definition it is the middle, and since the gov't isn't giving the rich anything, it CANNOT be redistribution.
Most of you simply refuse to look at the statistics since it clearly proves you wrong. AFTER the bush tax cuts in 2003, the gov't tax revenues exceeded the amount collected under clinton in 3 of the 4 years. If tax revenues went up, and the % paid by the top 1% increased, it is statistically impossible to claim that the bulk of teh tax cuts went to the rich. In fact, extending the cuts for teh top 2% would "cost" $700 billion while keeping teh middle class tax cuts would cost "$2.3 trillion, or more than 3x as much. If you idiots actually bothered to research the info, you would realize how stupid and totally uninformed you appear making these ridiculous statements blaming the rich or bush.
To Salt Grass....Obama's tax cut was only 9.00 so don't think he is any better....also, people forget that when Bush took office from Clinton, we wEre in a mild recession in which the stock market took a nose dive, people's 401K's fell and a lot of the internet businesses created in the 90's tanked. After 9/11, when a lot of businesses were suffering, Bush got congress to pass tax cuts for everyone......and our economy boomed until the dems took control of congress in 2006. If you go to msn money and look up how the expiration of the tax cuts will affect everyone, the most important is the AMT (Alternative Minimum Tax). Point Blank, this tax should be abolished. Under the AMT, any single person making $34,000.00 and any couple making $48,000.00 will have their taxes raised significantly. Those salaries used to be "middle class", now they are the "working class" and just trying to get by, especially in my state (CT) where we have federal and state income tax, car taxes every year, excise taxes on all utlities, high property taxes etc. and there are no jobs. I know, since I now make $37,500.00, down every year since 2006 when I made $41,000.00. I did not agree with Bush on a lot of things, but during the Bush presidency I was able to buy a condo at 4.75% fixed and I didn't need help to do it. if I tried to buy a condo now I would be SOOL. So to all those Bush bashers, please do not rewrite history.