The Tax Deal

[ClydeR]

Did you hear about the tax deal? Politically, who won? Was it a tactical victory for Republicans? Was it a strategic victory for Obama?

The expiration dates are the key. At the end of 2011, the unemployment benefits and the two percentage point payroll tax holiday expire. At the end of 2012, the Bush tax cuts expire.

If you can't think at least three moves ahead, then you won't be able to figure out who won on the politics.

And is it even a done deal?

[Androidpk]

This isn't over yet, and in my opinion it's a loss for both the Republicans, the Democrats, and the lower and middle class.

[Parkbandit]

This isn't over yet, and in my opinion it's a loss for both the Republicans, the Democrats, and the lower and middle class.

How is it a loss for the lower class (who pays no taxes) or the middle class (who will not see their taxes increase January 1st)?

Personally, I think it's a win for Obama. He knew he had to push the tax policy through because it would have gone through early next year if he didn't. This way, he can say "I kept taxes low" as he strategically moves towards center left ala Bill Clinton as he eyes his re-election efforts for 2012. The lunatic left will back him no matter what.. he needed to build support from Independents and Moderates if he stands a chance.. which is what he did.

[Suppa Hobbit Mage]

How is it a loss for the lower class (who pays no taxes) or the middle class (who will not see their taxes increase January 1st)?

Personally, I think it's a win for Obama. He knew he had to push the tax policy through because it would have gone through early next year if he didn't. This way, he can say "I kept taxes low" as he strategically moves towards center left ala Bill Clinton as he eyes his re-election efforts for 2012. The lunatic left will back him no matter what.. he needed to build support from Independents and Moderates if he stands a chance.. which is what he did.

I disagree actually... the lunatic left (many of whom will have no stake in politics in January) have no real reason to back Obama since he's shifting away from their policies... which is why he's getting fucking roasted by democrats (both those leaving and those staying). I think his speech yesterday where he was all OBAMA ANGRY just hurt him with both parties. His closing sentence of something like "I look forward to meeting on the field of battle"... yeah, that's working across party lines. Not sure what the fuck he was thinking, but it wasn't about making/keeping friends. He insulted both democrats and republicans and independents all in one speech. Where is the smooth talking great public address person I liked before the election?

[Gan]

I think its a pretty smart move by Obama. That being said, there are some significant risks with the timing. Then throw in the obfuscation factor of interpreting (pandering) how the economy fares at the end of 2011 and what factors were key for it's success or failure and you have some great ingredients for a muddy campaign season.

Of course, Obama says that he caved in to GOP terrorists who held unemployment (extended welfare) hostage for tax cuts for the rich...

[Keller]

I think the real loser is the deficit.

For a group of people all seemingly concerned about the deficit, it's odd that their compromise was, "Hey, if you let us cut taxes (don't dare correct this on pain of being labeled a hypocrit for saying Obama was going to "raise" taxes), then we'll let you increase spending!"

It seems as though California is truly a trend setter.

[Kembal]

He should've tried to get a little more stimulus into the deal. Either that, or worked out a higher percentage on the estate tax. (the exemption is correctly placed, IMO.) I think the Republicans would've given on either of those.

I'm just not sure the deal will actually pass.

[ClydeR]

Using Tim Russert's (http://en.wikipedia.org/wiki/Tim_Russert#Red_states_and_blue_states) red, blue and purple..


For the White House, the deal represents a clear shift in policy focus. Mr. Obama and Democrats spent much of the last year pursuing long-term goals like a health care overhaul and financial regulation, while hoping the economic recovery would continue. But with the recovery faltering and Republicans retaking the House, the administration is turning back to short-term job creation.

Congressional Democrats have reacted with a mix of wariness and anger, and some said Mr. Obama should have put up a fight on the high-end tax cuts. Yet once the Democrats bungled this issue — failing to deal with it before the midterm elections — their choices were extremely limited. If they stood firm on the high-end tax cuts and Republicans stood firm as well, all of the Bush tax cuts, not just those on income above $250,000, would have expired Dec. 31. The economy would surely have suffered as a result, and a bad economy is rarely good for the party that holds the White House.

Tellingly, economists and Democratic policy experts were largely pleased with the deal. Forecasting firms on Tuesday upgraded their estimates for growth and job gains over the next two years. Economists at Goldman Sachs, who have been more negative and more accurate than most Wall Street forecasters lately, called the deal “significantly more positive” than they had anticipated.

And left-leaning policy experts said the package did more to create jobs than they had thought possible after the Republicans’ midterm election victories. Robert Greenstein, Lawrence Mishel and John Podesta — who run prominent Washington research groups that range from liberal to staunchly liberal — all offered praise for the package. Of its estimated $900 billion-plus cost over two years, roughly $120 billion covers the high-end tax cuts and the estate tax cut, $450 billion covers Mr. Obama’s wish list and $360 billion covers the tax cut extensions both parties favored.

More... (http://www.nytimes.com/2010/12/08/business/economy/08leonhardt.html)

For your information, the unemployment rate in October 2012, just before the election, will be 7.7%.

[Tsa`ah]

This deal is simply delaying the bomb/trap left by the previous administration and GOP majority. It relieves the incoming house from two major issues, the vote on taxes and the vote on UE benefits. It also effectively re-brands the Bush tax cuts and Bush deficit to the Obama tax cuts and the deficits created by them ... which in turn plays on the average voter's incredible lack of memory. In short, GOP campaign material for the 2012 bids. After all, Boner and the GOP won't be portrayed as catering to the rich and giving everyone else the finger.

The deal includes a reduction, I think 2-3% in payroll taxes ... which translates into large chunks of income that larger employers get to pocket. Don't kid yourselves into thinking this will create jobs because it hasn't worked since the cuts were originally made.

[ClydeR]

After all, Boner and the GOP won't be portrayed as catering to the rich and giving everyone else the finger.

If you're going to talk about people, you need to spell their names right. Unless you did it on purpose.


The deal includes a reduction, I think 2-3% in payroll taxes ... which translates into large chunks of income that larger employers get to pocket. Don't kid yourselves into thinking this will create jobs because it hasn't worked since the cuts were originally made.

You've got the facts completely backwards, which I guess means that you actually support the compromise. It would have been nice if employers were the ones who got the tax break, but the liberals in the White House wouldn't go along with it.


The $120 billion cut in the payroll tax, for example, will apply to the portion paid by workers, not companies. The Congressional Budget Office and other analysts have said that cutting the workers’ portion provides less bang for the buck because individuals are likely to save some portion of the money. Cutting the employers’ portion subsidizes hiring.

But politics prevented the best kind of payroll tax cut. Republicans did not want one larger than the $120 billion, one-year cut in the package. Administration officials wanted the political benefit of having that whole sum apply to individual workers. The resulting compromise will help the economy, but not as much as it could have.

More... (http://www.nytimes.com/2010/12/08/business/economy/08leonhardt.html)

[Valthissa]

The deal includes a reduction, I think 2-3% in payroll taxes ... which translates into large chunks of income that larger employers get to pocket. Don't kid yourselves into thinking this will create jobs because it hasn't worked since the cuts were originally made.

I think the proposal is to reduce the employee's portion of the FICA tax from 6.2% to 4.2%. I did not see any reference to a reduction in the employee portion of the tax.

I'll take a look since that would be nice for me both at home and at work.

C/Valth

[prance1520]

Anyone have a link to the entire document? Or see anything about if the $90,000 expat exemption was included in this?

[ClydeR]

I agree with this Wall Street Journal editorial.


That rate is still 35 percentage points too high for our liking, but we'll take it as an alternative to the greedy political confiscation of more than half of the wealth built by someone who has saved over a lifetime. An estate of $5 million isn't all that much for a successful and thrifty business person with some real estate to accumulate over 50 or 60 years.

More... (http://online.wsj.com/article/SB10001424052748703814404576001591839952886.html)

If you can't save up $5 million over your lifetime, then you're not thrifty or successful. The Democrat party is so out of touch with the average person.

[~Rocktar~]

I think the real loser is the deficit.

For a group of people all seemingly concerned about the deficit, it's odd that their compromise was, "Hey, if you let us cut taxes (don't dare correct this on pain of being labeled a hypocrit for saying Obama was going to "raise" taxes), then we'll let you increase spending!"

It seems as though California is truly a trend setter.

This coming from the same person heralding the king of deficit spending. You didn't seem to give a shit about running up the deficit over the first 20 months of the esteemed Messiah and Chief's reign of ruin to match 8 years of the previous administration (including 2 wars and the previously unprecedented largest expansion in entitlement in history) and outstripping all previous administrations combined. So, what makes this different now? OH YEAH, I know, it's a tax cut favored by Republicans. Gotcha, plain politics with no compass or sense, business as usual for you.

[ClydeR]

Charles Krauthammer in a must read article..


Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did.

More... (http://www.washingtonpost.com/wp-dyn/content/article/2010/12/09/AR2010120904472.html)

Krauthammer rightly says that Obama got, first, a second stimulus, larger than the earlier one, at a time when "stimulus" is a dirty word, second, a grand improvement to his reelection chances in 2012, third, almost exactly what the Democrats say they want, fourth, a lot more money than the Republicans got and, fifth, a Republican Party that has lost its fiscal credibility by championing a plan that busts the budget more than ever in exchange for modest tax cuts for high income people.

Smart Republicans recognize how much the party lost in the compromise. Obama negotiated circles around McConnell. We need a new Republican leader in the Senate. I'm thinking Jim DeMint.

[Suppa Hobbit Mage]

He should've tried to get a little more stimulus into the deal. Either that, or worked out a higher percentage on the estate tax. (the exemption is correctly placed, IMO.) I think the Republicans would've given on either of those.

I'm just not sure the deal will actually pass.

Nothing infuriates me more than estate taxes. People pay taxes their entire life, and when they die, the government swoopes in and takes a significant portion of the estate. That is FUCKED UP beyond all belief. People should be able to give their (already taxed) estates to whoever they want without government involvement.

[~Rocktar~]

Nothing infuriates me more than estate taxes. People pay taxes their entire life, and when they die, the government swoopes in and takes a significant portion of the estate. That is FUCKED UP beyond all belief. People should be able to give their (already taxed) estates to whoever they want without government involvement.

Irrevocable Trust. It's how rich people do it, though you have to get the inheritance fight over with while you are alive.

[Keller]

Irrevocable Trust. It's how rich people do it, though you have to get the inheritance fight over with while you are alive.

Only if they have bad advisors.

[Keller]

This coming from the same person heralding the king of deficit spending. You didn't seem to give a shit about running up the deficit over the first 20 months of the esteemed Messiah and Chief's reign of ruin to match 8 years of the previous administration (including 2 wars and the previously unprecedented largest expansion in entitlement in history) and outstripping all previous administrations combined. So, what makes this different now? OH YEAH, I know, it's a tax cut favored by Republicans. Gotcha, plain politics with no compass or sense, business as usual for you.

Your false narrative is tired.

I've always said the way to reduce the deficit is to raise taxes and cut spending.

But it's really not surprising that you've convinced yourself that everyone that disagrees with you is just a tax and spend liberal. It fits your narrative much better.

[TheEschaton]

How is it a loss for the lower class (who pays no taxes) or the middle class (who will not see their taxes increase January 1st)?


Let's be clear for a second, the tax cuts for the middle class were going to be extended even under all Democratic proposals. The Republicans fought for (and won) the right for the tax cuts to be also extended for the top 2% of earners. It's a loss for the middle and lower class because it just adds more money to the deficit, extends unemployment benefits which shouldn't have been held hostage in the first place, and puts the power in the hands of the rich, once again.

-TheE-

[TheEschaton]

Nothing infuriates me more than estate taxes. People pay taxes their entire life, and when they die, the government swoopes in and takes a significant portion of the estate. That is FUCKED UP beyond all belief. People should be able to give their (already taxed) estates to whoever they want without government involvement.

Inheriting an estate is income. Income is taxed in this country. Get over it.

[Latrinsorm]

Nothing infuriates me more than estate taxes. People pay taxes their entire life, and when they die, the government swoopes in and takes a significant portion of the estate. That is FUCKED UP beyond all belief. People should be able to give their (already taxed) estates to whoever they want without government involvement.Can you explain why?

[Kembal]

Nothing infuriates me more than estate taxes. People pay taxes their entire life, and when they die, the government swoopes in and takes a significant portion of the estate. That is FUCKED UP beyond all belief. People should be able to give their (already taxed) estates to whoever they want without government involvement.

To be honest, there's enough estate tax avoidance strategies out there that the effective estate tax rate is much lower for anyone who actually has to pay it. Someone would have to be a fool to not do any estate planning with that much money and get actually taxed at the full rate.

There's a host of good public policy reasons for an estate tax (outside of the government needing revenue), but you've got an equally valid perspective in that "money should only be taxed once".

[TheEschaton]

Not to mention that the estate tax affects like less than 1% of the population.

[Parkbandit]

Your false narrative is tired.

I've always said the way to reduce the deficit is to raise taxes and cut spending.

But it's really not surprising that you've convinced yourself that everyone that disagrees with you is just a tax and spend liberal. It fits your narrative much better.

That theory would work if you raised taxes and everything remained the same. That isn't the case though. Companies and businesses will not spend as much money in order to meet their tax burden... lowering the number of employees they hire, lowering the amount of money they will use on non-essential things, decrease their overall spending, etc...

[Parkbandit]

Let's be clear for a second, the tax cuts for the middle class were going to be extended even under all Democratic proposals. The Republicans fought for (and won) the right for the tax cuts to be also extended for the top 2% of earners. It's a loss for the middle and lower class because it just adds more money to the deficit, extends unemployment benefits which shouldn't have been held hostage in the first place, and puts the power in the hands of the rich, once again.

-TheE-

If you want to lower the deficit, decrease spending. Confiscating people's money in order to maintain your out of control spending habits is never the way to balance a budget.

[Warriorbird]

If you want to lower the deficit, decrease spending. Confiscating people's money in order to maintain your out of control spending habits is never the way to balance a budget.

Republicans haven't actually managed the whole 'decrease spending' bit.

[Parkbandit]

Not to mention that the estate tax affects like less than 1% of the population.

And besides.. they are evil and rich.. fuck them! They already have too much as it is! IT'S NOT FAIR!!!

[Parkbandit]

Republicans haven't actually managed the whole 'decrease spending' bit.

We get it WB.

Hey, maybe you should also bring up the Iraq War again......

[Warriorbird]

We get it WB.

Hey, maybe you should also bring up the Iraq War again......

Curiously enough you've brought it up in the past, oh, year or so, more than I have. Stay classy.

Go on and prove that the primary contribution of older Americans isn't insulting people.

I understand that you want to ignore portions of history though, given as you've seen so much of it.

[Parkbandit]

Curiously enough you've brought it up in the past, oh, year or so, more than I have. Stay classy.

Of course you haven't brought up spending in the past year.. because Bush isn't the one spending it. No, you changed from "ZOMG WASTING MONEY ON IRAQ!! to "ZOMG REPUBLICANS NEVER CUT SPENDING!!"

It's funny how your argument changes when someone different is in the White House.



Go on and prove that the primary contribution of older Americans isn't insulting people.

Where did I insult you?



I understand that you want to ignore portions of history though, given as you've seen so much of it.

Why are little boys like you so ignorant about history? It might be because you haven't had it yet.. since American History isn't covered until the 7th grade.

See what I did there, little kid?

[Keller]

Inheriting an estate is income. Income is taxed in this country. Get over it.

Huh?

How did the dead guy have income?

[Keller]

Confiscating people's money

http://thejosevilson.com/wp-content/uploads/2010/09/cry-baby.jpg

[Keller]

That theory would work if you raised taxes and everything remained the same. That isn't the case though. Companies and businesses will not spend as much money in order to meet their tax burden... lowering the number of employees they hire, lowering the amount of money they will use on non-essential things, decrease their overall spending, etc...

They can organize as corporations and avoid the increased individual rate.

Also, why not just repeal the 16th amendment. Then those businesses will be booming, right?

[Firestorm Killa]

They can organize as corporations and avoid the increased individual rate.

Also, why not just repeal the 16th amendment. Then those businesses will be booming, right?

Organize into corporations? You do realize to become a corporation means you need growth? Small businesses definately aren't seeing growth right now with this economy as it is. So small businesses can't always become a corporation.

OMG Keller is saying to repeal the 16th Amendment? Did you hit your head or something and knock the Liberal out of you? LMAO!
Yes Repeal of the 16th Amendment would help. Especially since America has no real industry anymore, repeal of the 16th amendment may help bring manufacturing back.

[Warriorbird]

I love how I can pre-emptively predict PB posts.

If the Republicans wanted to be really ballsy they'd side with the straying Democrats against the tax cuts and the unemployment benefit extensions.

They're not actually conservative.

[Gan]

Meet the Press was pretty interesting this morning, especially the round table discussion regarding the tax cut bill.

[Keller]

Organize into corporations? You do realize to become a corporation means you need growth? Small businesses definately aren't seeing growth right now with this economy as it is. So small businesses can't always become a corporation.

Please explain this.


OMG Keller is saying to repeal the 16th Amendment? Did you hit your head or something and knock the Liberal out of you? LMAO!
Yes Repeal of the 16th Amendment would help. Especially since America has no real industry anymore, repeal of the 16th amendment may help bring manufacturing back.

You're proving once more your stature among the intellectual community that is the PC. I mean, you've got to be right. If there weren't income taxes, I bet industry would come begging for our expensive labor and degrading infrastructure.

PS - I'm glad to see you've decided to show some respect for our country and begin capitalizing America.

[Stanley Burrell]

If you want to lower the deficit, decrease spending. Confiscating people's money in order to maintain your out of control spending habits is never the way to balance a budget.

A) Mortgages and loans, loans, loans to people who will be forced to foreclose whether or not the planes fly into the White House.

B) Purchase all anticipated foreclosures.

C) ???

D) Profit.

[Firestorm Killa]

They're not actually conservative.

It's sad but I agree with you on this.

[Parkbandit]

I love how I can pre-emptively predict PB posts.


Actually, you didn't. You got called out for being stupid again and the best excuse you could come up with was "I wasn't responding to your first post.. I was responding to a post you will make some day in the future.

You probably wanted to use your typical "I wasn't responding to you, I was responding to someone else" excuse, but you quoted and called me by name. You can't even do that right.



If the Republicans wanted to be really ballsy they'd side with the straying Democrats against the tax cuts and the unemployment benefit extensions.

They're not actually conservative.

Unfortunately, there wasn't enough time to get the tax cuts while taking out the other bullshit that was heaped onto this bill.

Hopefully, once the Republicans take over the House, they can put forth some real economy saving spending cuts and get this economy running again.

[Keller]

Hopefully, once the Republicans take over the House, they can put forth some real economy saving spending cuts and get this economy running again.

Given their rhetoric, they better.

[ClydeR]

Meet the Press was pretty interesting this morning, especially the round table discussion regarding the tax cut bill.

Did they agree with me and Charles Krauthammer?

[Firestorm Killa]

I don't even know why people are still calling it a tax cut, it is tax rates.

[Kembal]

Hopefully, once the Republicans take over the House, they can put forth some real economy saving spending cuts and get this economy running again.

I'm amused that you don't think this is a contradiction in terms, but if you can point me to a fiscal austerity program that's produced short run growth for an economy in recession/depression in any country, I'd love to read about it.

[Parkbandit]

I'm amused that you don't think this is a contradiction in terms, but if you can point me to a fiscal austerity program that's produced short run growth for an economy in recession/depression in any country, I'd love to read about it.

http://www.calvin-coolidge.org/html/the_harding_coolidge_prosperit.html

[Warriorbird]

Republicans cut spending all the time.

[Parkbandit]

Republicans cut spending all the time.

Who made this claim?

Oh.. it's WB being WB. NM.

[Warriorbird]

Who made this claim?

Oh.. it's WB being WB. NM.

Ahh. Well. If you're going to somehow pretend that Republicans are going to cut spending I won't stand in your way. Believe, Charlie Brown, believe!

We saw how well they've done on earmarks.

[Parkbandit]

Ahh. Well. If you're going to somehow pretend that Republicans are going to cut spending I won't stand in your way. Believe, Charlie Brown, believe!

We saw how well they've done on earmarks.

I posted this: "Hopefully, once the Republicans take over the House, they can put forth some real economy saving spending cuts and get this economy running again."

Not sure how I am "pretending." Let's be honest though, Republicans have a far better record than the Democrats.

But hey, continue on with your broken record. It never, ever gets old. Really. I expect we will be hearing the same from you for another 2 years, then it may/may not change depending on who is in the WH.

[Warriorbird]

Not sure how I am "pretending." Let's be honest though, Republicans have a far better record than the Democrats.


Regarding cutting spending that is false.

[DeV]

Do Republicans and Democrats really care about the deficit? As much as they care about spending cuts. What you get when Republicans and Democrats compromise is more spending. The only difference is where and how the money gets shuffled.

Programs vs Defense
Healthcare vs Corporate Investment

P.S. Where are fiscal conservatives, not to be confused with Republicans, when you need them?

Just my opinion, but I see no reason why unemployment benefits should be extended beyond the reasonable amount of time they've already been extended.

[Warriorbird]

Fiscal conservatives don't exist, unless they're fringe outliers like Ron Paul who everybody regards as nuts. Those are allowed because they have no real power.


EDIT:

Courtesy of our friends over on the DR Unofficials http://www.smelly-cat.org/phpBB3/index.php (who almost debate politics half as much as we do):

http://blogs.forbes.com/rickungar/2010/10/17/why-the-gop-will-never-cut-the-size-of-government/

The second is an opportunity to actually balance the budget. You can post what you'd cut through it, and see the actual size of stuff QQed about.

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

[Firestorm Killa]

Fiscal conservatives don't exist, unless they're fringe outliers like Ron Paul who everybody regards as nuts. Those are allowed because they have no real power.


EDIT:

Courtesy of our friends over on the DR Unofficials http://www.smelly-cat.org/phpBB3/index.php (who almost debate politics half as much as we do):

http://blogs.forbes.com/rickungar/2010/10/17/why-the-gop-will-never-cut-the-size-of-government/

The second is an opportunity to actually balance the budget. You can post what you'd cut through it, and see the actual size of stuff QQed about.

http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html

I don't regard Ron Paul as nuts. I believe he should be president.

[Paradii]

Sadly, satirical-alts on an online message board aren't allowed to vote.

[Firestorm Killa]

Sadly, satirical-alts on an online message board aren't allowed to vote.

Then why do you get a vote?

[Gan]

Just my opinion, but I see no reason why unemployment benefits should be extended beyond the reasonable amount of time they've already been extended.
Agreed.

Its like a modern day sale of indulgences.

[Firestorm Killa]

Agreed.

Its like a modern day sale of indulgences.

I am wondering when the Government will also start supplying crack to crack addicts.

[Gan]

I am wondering when the Government will also start supplying crack to crack addicts.

Thought you knew. That's how we've been keeping the black man down ever since the 1960's.

[Firestorm Killa]

Thought you knew. That's how we've been keeping the black man down ever since the 1960's.

LMAO! Looks like it backfired since more whites use it then blacks.

[Parkbandit]

Do Republicans and Democrats really care about the deficit? As much as they care about spending cuts. What you get when Republicans and Democrats compromise is more spending. The only difference is where and how the money gets shuffled.

Programs vs Defense
Healthcare vs Corporate Investment

P.S. Where are fiscal conservatives, not to be confused with Republicans, when you need them?

Just my opinion, but I see no reason why unemployment benefits should be extended beyond the reasonable amount of time they've already been extended.

I can't disagree with anything you posted.. which frightens me.

And I couldn't agree more about unemployment. How many weeks can you now sit on your ass and get paid? 2 years?

When you reward people for being lazy, you get lazy people.

[Firestorm Killa]

I can't disagree with anything you posted.. which frightens me.

And I couldn't agree more about unemployment. How many weeks can you now sit on your ass and get paid? 2 years?

When you reward people for being lazy, you get lazy people.

If they go along with the compromise on the Tax Rates, it will go up to 3 years of unemployment.

I really don't see why people think that political parties matter anymore, Republicans and Democrats are all Progressive. God damnit people if you want real Hope and Change vote Libertarian.

[Suppa Hobbit Mage]

98 weeks I believe is how long Unemployment lasts today. I see no reasonable explanation for someone being unable to find a job in that length of time, time to cut them off at the nipple.

[Firestorm Killa]

98 weeks I believe is how long Unemployment lasts today. I see no reasonable explanation for someone being unable to find a job in that length of time, time to cut them off at the nipple.

99 weeks(hence the 99ers). And more for some people with certain circumstances.

[Parkbandit]

Death and taxes, it is said, are life's only two certainties. But in the wake of President Obama's tax compromise with congressional Republicans, only death retains the status of certainty: The future for taxes has been left up in the air. And uncertainty is not a friend of investment, growth and job creation.
The deal has several key features. It reduces payroll taxes, extends unemployment benefits and keeps current tax rates intact. So far, so good. But intermixed with the benefits are considerable costs of consequence. Given the unambiguous message that the American people sent to Washington in November, it is difficult to understand how our political leaders could have reached such a disappointing agreement. The new, more conservative Congress should reach a better solution.

The deal keeps current tax rates from rising to pre-Bush era levels for two years. But in 2013, unless Congress acts again, rates will increase dramatically.

Extension temporary

Of course, delay now is better than an immediate tax hike. But because the extension is only temporary, a large portion of the investment and job growth that characteristically accompanies low taxes will be lost. When entrepreneurs and employers make decisions to start or expand an enterprise, uncertainty about tax rates translates directly into a reduced propensity to invest and to hire. With only a two-year extension, investors know that before their returns are realized, tax rates may be jacked up to the levels favored by President Obama. So while the tax deal will succeed in temporarily putting more money in the hands of consumers, it will fail to deliver its full potential for creating lasting growth.

It will also add to the deficit. In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation. But once again, because the tax deal is temporary, a large portion of this beneficent effect is missing. What some are calling a grand compromise is not grand at all, except in its price tag. The total package will cost nearly $1 trillion, resulting in substantial new borrowing at a time when we are already drowning in red ink.

Part of the tax deal is a temporary reduction in payroll taxes. The president was insistent, however, that only the employee's payroll taxes be reduced — the portion paid by the employer is to remain the same. Again, the president is looking to get more money into the hands of the consumer to boost near-term spending. But by refusing to lower the cost of hiring a new employee, he fails to encourage what the American people want even more than lower taxes — more good jobs. Like the income tax deal, the payroll tax deal will add to the deficit.

For those without jobs, the tax compromise extends unemployment benefits for 13 months. A decent and humane society must have a strong safety net for the unemployed. I served for 15 years as a lay pastor in my church and saw the heartbreak of joblessness up close; a shattering loss of faith in oneself is but only one of many forms the suffering can take. Nonetheless, the vital necessity of providing for those without work should not be used as an excuse to ignore the very real problems of our unemployment system.

In this, as in so many other arenas of government policy, unemployment insurance has many unintended effects. The indisputable fact is that unemployment benefits, despite a web of regulations, actually serve to discourage some individuals from taking jobs, especially when the benefits extend across years.

Redo jobless benefits

The system is also not designed for a flexible economy like ours in which some employees move from job to job for short periods, and are therefore ineligible for unemployment compensation when they are faced with a protracted spell without work.

To remedy such problems we need a very different model, perhaps establishing individual unemployment savings accounts over which employees would exercise direct control when they lose their jobs, or putting in place financial incentives for employers to hire and train the long-term unemployed. One thing is certain: While we cannot rebuild our flawed system overnight, we are surely not required to borrow the funds to pay for it. In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.

President Obama has reason to celebrate. The deal delivers short-term economic stimulus, and it does so at the very time he wants it most, before the 2012 elections. But the long term health of our great engine of prosperity will remain very much in doubt. To the twin inevitabilities of death and taxes, we may now have to add persistent high unemployment

http://www.usatoday.com/news/opinion/forum/2010-12-14-column14_ST_N.htm?loc=interstitialskip

Opinion piece by Mitt Romney this morning.

[Latrinsorm]

Given the unambiguous message that the American people sent to Washington in November, it is difficult to understand how our political leaders could have reached such a disappointing agreement.It doesn't exactly take Sherlock Holmes to solve this mystery, Governor.

[Kembal]

http://www.calvin-coolidge.org/html/the_harding_coolidge_prosperit.html

Interesting. Kind of just explains away the asset bubble that created the stock market crash as "oh, not important".

You don't want to create another asset bubble as the driver of short run growth. We already did that to ourselves from 2001-2008.

[Parkbandit]

Interesting. Kind of just explains away the asset bubble that created the stock market crash as "oh, not important".

You don't want to create another asset bubble as the driver of short run growth. We already did that to ourselves from 2001-2008.

You asked this:


if you can point me to a fiscal austerity program that's produced short run growth for an economy in recession/depression in any country, I'd love to read about it.

It's not my fault history proved you to be an ignorant fool.

[Kembal]

You asked this:



It's not my fault history proved you to be an ignorant fool.

Hey, name calling! What else is new?

You really think that getting out of a recession by an asset bubble, which leads to a major economic crash later, is a good thing? Was anything actually solved? Are people economically well off then?

If you want to put blinders on and say "well, that's what you asked for.", go right ahead. But to call that an actual solution to our economic problems...well, you keep right on living in fantasyland then.

[Parkbandit]

Hey, name calling! What else is new?

Sorry I hurt your feelings.



You really think that getting out of a recession by an asset bubble, which leads to a major economic crash later, is a good thing? Was anything actually solved? Are people economically well off then?

You didn't ask for anything but a time period where government instituted big slashes to spending as if you thought it never happened before. I'm sorry you were proven wrong.. but hey, you did get to read about something new.



If you want to put blinders on and say "well, that's what you asked for.", go right ahead. But to call that an actual solution to our economic problems...well, you keep right on living in fantasyland then.

Asked and answered. I'm sorry it made you look ignorant and silly, but that's your fault.

Now, if you believe that we shouldn't cut government spending because it could lead to an asset bubble, I'm happy to have that discussion with you.

[Warriorbird]

Personally I believe our current Congressional setup renders spending cuts nearly impossible, so it is all a moot point.

[Parkbandit]

Personally I believe our current Congressional setup renders spending cuts nearly impossible, so it is all a moot point.

I don't think it's setup to make spending cuts impossible.. cuts in spending cuts into the power that politicians wield and they rarely want to reduce their power.

I thought after the last election they finally understood the will of the American People was to reduce government spending... but looking into all the earmarks that were shoved into the latest spending bill makes me think the politicians simply do not get it.

[Latrinsorm]

I don't think it's setup to make spending cuts impossible.. cuts in spending cuts into the power that politicians wield and they rarely want to reduce their power.

I thought after the last election they finally understood the will of the American People was to reduce government spending... but looking into all the earmarks that were shoved into the latest spending bill makes me think the politicians simply do not get it.I think they get it much more than you or anyone else who had similar expectations. The "will of the American People" is a media fabrication - no group of 100 million people will ever express a coherent, single ideology. The ginned up outrage over spending was no more representative of the will of American people than any of the fifty other ginned up outrages these politicians have seen come and go. You play along ("ban" earmarks), then you get back to work (earmarks like crazy). Like every election, the overwhelming majority of incumbents running will be re-elected, because the American electorate isn't as idiotic as portrayed.

[Gan]

I think they get it much more than you or anyone else who had similar expectations. The "will of the American People" is a media fabrication - no group of 100 million people will ever express a coherent, single ideology.

So the same could be said for government run healthcare right?

[Latrinsorm]

So the same could be said for government run healthcare right?The comparison is almost perfect. Government run healthcare, like curbing needless spending, is simply the right thing to do regardless of what the media claims the popular mandate is. Expecting politicians to by and large suddenly change because of the aforementioned claims is silly, and politicians did not by and large suddenly change on the healthcare issue. People who were already for an expanded government presence were still for it, people who were already against it were still against it. The only difference I can think of is that there are almost no people who were already against all of what Parkbandit considers needless spending, explaining why the illusion of causality is shattered here but not as much in healthcare threads.

[Firestorm Killa]

The comparison is almost perfect. Government run healthcare, like curbing needless spending, is simply the right thing to do regardless of what the media claims the popular mandate is. Expecting politicians to by and large suddenly change because of the aforementioned claims is silly, and politicians did not by and large suddenly change on the healthcare issue. People who were already for an expanded government presence were still for it, people who were already against it were still against it. The only difference I can think of is that there are almost no people who were already against all of what Parkbandit considers needless spending, explaining why the illusion of causality is shattered here but not as much in healthcare threads.

How is the Government health care they passed the right thing to do? All it does is make Health Care more expensive for employers and the insured. It pretty much is written to kill the free market in health care to ensure everyone ends up on the government plan.

[Latrinsorm]

Surely you know the answer to those questions already, but for the benefit of those not as enlightened as you - of course I and my liberal brethren want to kill the free market! We're just a bunch of closet socialists and probably closet something-elses too, by the lack of sistren, and also we are just saturated with ressentiment, can't stand it when anyone is successful, it just drives us up the wall. We aren't manly enough to smash anyone's jaw through a brick, though, so we have to be satisfied with mealy-mouth libtarded legislation.

[Firestorm Killa]

Surely you know the answer to those questions already, but for the benefit of those not as enlightened as you - of course I and my liberal brethren want to kill the free market! We're just a bunch of closet socialists and probably closet something-elses too, by the lack of sistren, and also we are just saturated with ressentiment, can't stand it when anyone is successful, it just drives us up the wall. We aren't manly enough to smash anyone's jaw through a brick, though, so we have to be satisfied with mealy-mouth libtarded legislation.

I know you are trying to be sarcastic, but the proof is in the pudding.

[g++]

What kind of pudding are we talking about here?

[Firestorm Killa]

What kind of pudding are we talking about here?

The Socialist Cinnamon type.

[pabstblueribbon]

OOooh I hope its pudding pops.

[Keller]

I know you are trying to be sarcastic, but the proof is in the pudding.

Let's just communicate in cliches.

You may think Obama has already got one paw on the chicken coup, but an ounce of prevention is worth a pound of cure.

[Firestorm Killa]

OOooh I hope its pudding pops.

Poop Pudding pops. Just like in 2 girls and 1 cup.

[g++]

Social security is a great idea because a bird in the hand is worth two in the bush. Literally. And the bush is future income. Fuck metaphors.

[Firestorm Killa]

Social security is a great idea because a bird in the hand is worth two in the bush. Literally. And the bush is future income. Fuck metaphors.

I like the "Do woodchucks chuck wood?" one.

[Keller]

I like the "Do woodchucks chuck wood?" one.

Jesus titty fucking budda fucking christ in his vagina you're retarded like . . . squirrel!

[Firestorm Killa]

Jesus titty fucking budda fucking christ in his vagina you're retarded like . . . squirrel!

You fell from your mama, Palin's puss retarded.

[g++]

Can I have an Indian name too?

[Keller]

Can I have an Indian name too?

How about a porn name instead?

Given your residence and it's prominence in a critically acclaimed crime drama, I dub thee Omar Cumming.

[g++]

Sweet!
Thanks

[Firestorm Killa]

How about a porn name instead?

Given your residence and it's prominence in a critically acclaimed crime drama, I dub thee Omar Cumming.

LMMFAO!

[TheEschaton]

An interesting op-ed by my former Trusts and Estates professor on the Estate tax:

Give up on the Estate Tax (http://www.nytimes.com/2010/12/15/opinion/15madoff.html?_r=1&ref=opinion)


CONGRESSIONAL Democrats have voiced outrage at President Obama’s compromise proposal to lower the estate tax rate to 35 percent, from 55 percent, and raise the per person exemption to $5 million, from $1 million. They have called it a giveaway to the rich. A more reasonable compromise, they say, would have set the rate at 45 percent and the exemption at $3.5 million when the estate tax goes back into effect in January.

But instead of getting into any further arguments over rates and exemptions, Democrats would be better off conceding defeat. They should allow Republicans to get rid of the estate tax altogether — but at the same time arrange for inherited wealth to be subject to income tax.

After all, the Democrats have already lost the battle. The president’s proposal is fresh evidence that even Democrats have given up championing the fundamental value that the estate tax was originally intended to promote. This tax, first enacted in 1916, was never intended to be simply a device for raising revenue. Rather, it was meant to address the phenomenon of a small number of Americans controlling large amounts of the country’s wealth — which was considered a national problem.

As Justice Louis Brandeis said, “We can have concentrated wealth in the hands of a few or we can have democracy, but we can’t have both.” Even Andrew Carnegie testified in Congress in favor of an estate tax as the best way to address wealth concentration.

In its first 60 years, the estate tax, along with other progressive policies, went a long way toward accomplishing this goal. By 1976, the amount of the nation’s wealth controlled by the richest 1 percent of Americans had fallen from more than 50 percent to only 20 percent. And this greater dispersal of wealth fostered a strong middle class.

The tax policies of the past 35 years, however, have reversed the trend. Today the wealthiest 1 percent own more than a third of the country’s wealth, leaving 80 percent of Americans with just 16 percent of it. President Obama’s proposal would only accelerate this trend.

But Americans seem little inclined to resist wealth concentration. Efforts to impose taxes geared to the wealthy are lambasted as promoting class warfare. Moreover, because the estate tax is nominally imposed on the deceased, it has been vulnerable to the “death tax” rhetoric, which has convinced the public that it is a second tax imposed on the defenseless dead, who already paid taxes on the money they accumulated.

Missing from the debate has been any discussion of what level of tax is appropriate for heirs. Few Americans may realize that money received by gift, inheritance or life insurance is entirely free from income taxes. Of course, this made sense when there was a strong estate tax. But there is no other reason inherited wealth should not be taxed the same as wages, lottery winnings and all other forms of income.

President Obama is said to be considering an overhaul of the income tax code, beginning next year. That would be an ideal opportunity to make inheritances subject to income taxes.

If inherited wealth was taxed as income, exemptions could still be provided for smaller estates — up to $500,000 or even $1 million. And taxes on inherited family farms and businesses could easily be deferred, if need be, until they were sold.

Most important, by imposing the tax directly on those who receive the money, Congress could have a more honest discussion regarding the appropriate taxation of inherited wealth.


Ray D. Madoff, a professor at Boston College Law School, is the author of “Immortality and the Law: The Rising Power of the American Dead.”

[Firestorm Killa]

CONGRESSIONAL Democrats have voiced outrage at President Obama’s compromise proposal to lower the estate tax rate to 35 percent, from 55 percent, and raise the per person exemption to $5 million, from $1 million. They have called it a giveaway to the rich. A more reasonable compromise, they say, would have set the rate at 45 percent and the exemption at $3.5 million when the estate tax goes back into effect in January.

I LOL whenever I hear the Democrats say that cutting taxes on anyone is giving them money. When will they realize that it is the individual's money in the first place which they earned and worked for. Besides it makes no sense taxing a person's wealth twice. Politicians are just greedy as hell.

[Kuyuk]

Politicians are just greedy as hell.

Or are we greedy, as we're unwilling to give up a % of our income to our country?

[Rinualdo]

but the proof is in the pudding.

The proverb is actually, "the proof of the pudding is in the eating".
Proof isn't in the pudding. Milk and eggs are in the pudding.

[Bobmuhthol]

I LOL whenever I hear the Democrats say that cutting taxes on anyone is giving them money. When will they realize that it is the individual's money in the first place which they earned and worked for. Besides it makes no sense taxing a person's wealth twice.

1. Cutting taxes is giving money.
2. Money is valueless without the government backing it. Running that government costs money.
3. Track a dollar and tell me it never gets taxed twice. I am unfortunate enough to make enough money to put me in a 10% federal income tax bracket, on top of FICA, and I still have to pay motherfucking sales tax?!?!? NO DOUBLE TAXATION!!

[Warriorbird]

Jesus titty fucking budda fucking christ in his vagina you're retarded like . . . squirrel!

http://www.disneydreaming.com/wp-content/uploads/2009/03/up_the_movie_dog.jpg

For the win.

[Firestorm Killa]

1. Cutting taxes is giving money.
2. Money is valueless without the government backing it. Running that government costs money.
3. Track a dollar and tell me it never gets taxed twice. I am unfortunate enough to make enough money to put me in a 10% federal income tax bracket, on top of FICA, and I still have to pay motherfucking sales tax?!?!? NO DOUBLE TAXATION!!

1. How is it giving money that the person already has?
2. Your wrong our money is not backed by anything but a promise by the government and Fed that it's worth something. So no it's not backed by anything physical. Thats why we need the gold standard back.
3. Not talking bout the dollar. Talking about the individual's assets and salaries. The Estate tax is a second federal tax on the assets and salaries earned. Sales tax is for primarily for state and local governments. I agree we shouldn't be double taxed. Thats why I am in favor of the fair tax(flat tax). Which would make everyone pay a certain percentage, and no one would get a credit or rebate.

[AnticorRifling]

Wouldn't it be faster if you just wrote "I'm a fucking retard" and copy/pasted it everytime you posted instead?

I'll wait as you attempt, poorly, to come back with a super awesome playground insult (but it's ok THEY did it first so now you can do it to give THEM a taste of THEIR own medicine for what THEY are doing that's dumb but when you do it we all know it's super witty and awesome).


Also what are your thoughts on bar fights and bricks?

[Firestorm Killa]

Wouldn't it be faster if you just wrote "I'm a fucking retard" and copy/pasted it everytime you posted instead?

I'll wait as you attempt, poorly, to come back with a super awesome playground insult (but it's ok THEY did it first so now you can do it to give THEM a taste of THEIR own medicine for what THEY are doing that's dumb but when you do it we all know it's super witty and awesome).


Also what are your thoughts on bar fights and bricks?

Sounds like someone is showing their liberal ways.

[TheEschaton]

1. How is it giving money that the person already has?
2. Your wrong our money is not backed by anything but a promise by the government and Fed that it's worth something. So no it's not backed by anything physical. Thats why we need the gold standard back.
3. Not talking bout the dollar. Talking about the individual's assets and salaries. The Estate tax is a second federal tax on the assets and salaries earned. Sales tax is for primarily for state and local governments. I agree we shouldn't be double taxed. Thats why I am in favor of the fair tax(flat tax). Which would make everyone pay a certain percentage, and no one would get a credit or rebate.

1. Because one of the costs of living in an organized society is paying for its upkeep. And thus, cutting taxes is giving you money which would otherwise be just another expense. Keep in mind, we already have the lowest tax rate in the first world.

2. Arguing for the gold standard is literally retarded.

3. Inheritences aren't subject to income tax, yet suddenly if I get 3 million dollars from my father's estate, it's not taxed? Again, you should get used to the idea that all income is taxed, whether it's through the income tax or the estate tax. Keep in mind, the inheritor didn't earn any of the assets, and thus isn't being double-taxed, IE, they weren't taxed on it when it was originally income.

-TheE-

[Firestorm Killa]

1. Because one of the costs of living in an organized society is paying for its upkeep. And thus, cutting taxes is giving you money which would otherwise be just another expense. Keep in mind, we already have the lowest tax rate in the first world.

2. Arguing for the gold standard is literally retarded.

3. Inheritences aren't subject to income tax, yet suddenly if I get 3 million dollars from my father's estate, it's not taxed? Again, you should get used to the idea that all income is taxed, whether it's through the income tax or the estate tax. Keep in mind, the inheritor didn't earn any of the assets, and thus isn't being double-taxed, IE, they weren't taxed on it when it was originally income.

-TheE-

1. You do realize taxes used to be 100% voluntary right? Up until the 16th Amendment.

2. Arguing against it in favor of the promises from politicians and a bank whose shareholders are other banks is way more retarded.

3. The Estate tax is a tax on money that your earned and payed your taxes on already. It will die though probably when the Republicans come in.

[TheEschaton]

1. I wouldn't call them voluntary. Also, we used to be an agricultural society where black people and women weren't allowed to vote, and black people were considered property. Shit changes.

Edited to add: Before the 16th Amendment, taxes, by the Constitution had to be levied according to the Census data and splitting it between the states. All the 16th Amendment did was allow the federal government to collect taxes to run itself.

2. There is literally no way you know anything about economics.

3. The estate tax is a tax on your heirs on money they most certainly did not earn. You're dead, that's why it's a tax on your estate, not you.

-TheE-

[Warriorbird]

I'm anti estate tax and I still find his defenses stupid.

[Firestorm Killa]

I'm anti estate tax and I still find his defenses stupid.

Maybe it's cause you're a dumb fuck? Or perhaps you're not against it but being a dumbass in another thread?

[Showal]

Maybe it's cause you're a dumb fuck? Or perhaps you're not against it but being a dumbass in another thread?

Shows what you know.

[Warriorbird]

Maybe it's cause you're a dumb fuck? Or perhaps you're not against it but being a dumbass in another thread?

http://www.humbleisd.net/227520419125459307/lib/227520419125459307/show_what_you_know_seal5.gif

[Stanley Burrell]

This is probably a n00b question, but why would something handed down to somewhere, somehow, to someone, proceeding their being deceased be taxed at all? I mean, whoever ends up owning a house, apartment, ...farm, ... ...spacecraft, etc. is going to have to pay any and all standard taxes, plus maintenance if needed, in now owning these items. Anything the new proprietor would do to screw up their newly acquired whatever is on their hands. Why throw any (if I'm understanding any of this) taxes in their for the sake of taxing the individual? They want to sell it and add it to their income? There are already taxes associated with that? Demolish, refurbish, pay extra for owning a dog in a non-dog co-op? Everything is already associated with some other plausible function that coincides with inheriting an estate. Or?

[Warriorbird]

This is probably a n00b question, but why would something handed down to somewhere proceeding their being deceased be taxed at all? I mean, whoever ends up owning a house, apartment, ...farm, ... ...spacecraft, etc. is going to have to pay any and all standard taxes, plus maintenance if needed, in now owning these items. Anything the new proprietor would do to screw up their newly acquired whatever is on their hands. Why throw any (if I'm understanding any of this) taxes in their for the sake of taxing the individual? They want to sell it and add it to their income? There are already taxes associated with that? Demolish, refurbish, pay extra for owning a dog in a non-dog co-op? Everything is already associated with some other plausible function that coincides with inheriting an estate. Or?

The goal is to stop the build up of dynastic wealth. These things are worked around all the time because they have holes big enough to drive a truck through though.

[Stanley Burrell]

The goal is to stop the build up of dynastic wealth. These things are worked around all the time because they have holes big enough to drive a truck through though.

I guess I would be for a tax that puts the pen to the paper and seals up loopholes rather than paying taxes to have establishments utilize the same damn tax method if there are so many loopholes in it.

I don't if what I just said makes any sense.

[Stanley Burrell]

Alright, I've thought about it for like twelve seconds. With almost no knowledge of the estate tax and having only taken World Economics, which was mostly the history of Imperialism, with a B- grade. Using the superior knowledge bestowed upon me, I have come to the ultimate in reasoning.

We need to pay taxes to establish large government economic establishments with a new set of fiscal standards and, at the same time, pay more taxes, too, to create giant government economic oversight committees.

[Bobmuhthol]

I really enjoyed TheE's posts.

I also enjoyed that I said if you track a dollar it will be taxed multiple times, to which Firestorm Killa told me that he's not talking about dollars and instead he was talking about salaries. I envy the people who are compensated with things other than dollars.

[Gan]

I like getting paid in chickens.

[Warriorbird]

I like getting paid in overpriced wine and stock shares.

[Kuyuk]

I really enjoyed TheE's posts.

I also enjoyed that I said if you track a dollar it will be taxed multiple times, to which Firestorm Killa told me that he's not talking about dollars and instead he was talking about salaries. I envy the people who are compensated with things other than dollars.

Agreed.

[pabstblueribbon]

Shows what you know.

[Kuyuk]

I know all about the following shows:

Salute your shorts
MacGyver
Prince Valiant
Kitchen Nightmares

[ClydeR]

For your information, the unemployment rate in October 2012, just before the election, will be 7.7%.

Everything is proceeding (http://www.post-gazette.com/pg/11007/1116296-100.stm) as I have foreseen.