Obama caves on tax cuts for the rich

[dcarrigg]

News: http://www.slate.com/id/2276914/

Commentary:

Maybe this won't be taken well here, but I happened to be of the thought that the Bush tax cuts should expire. The $4T in lost revenue over the last decade sure looks like it would come in handy now. In any event, this "compromise" between Republicans and Democrats just lets both of them spend more. The GOP gives it to the upper 1%, Dems give it to the unemployed. The deficit and the future suffer. And they wonder why the youth doesn't get out the vote.

This is one that the President should have fought.

Krugman's take: http://www.nytimes.com/2010/12/06/op...=4&ref=opinion.

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Let them know why.

[Starving Steve]

Re: Obama caves on tax cuts for the rich

NEO-LIBERALS are so-called Democrats who use deficit-spending to bail-out the biggest banks and bail-out Wall Street's corporations.

The Obama Administration is staffed by neo-liberals. The record of the Obama Administration has been to run deficits and bail-out bankers.

Naturally, Obama caved on tax-cuts for the rich. He is no different than George Bush Jr, and maybe worse. The U.S. has two Republican Parties: the GOP and the Obama-Democrats.

It was no accident that Obama re-appointed Ben Bernanke to head the Fed. And George Bush Jr. appointed Bernanke originally.

[Slimprofits]

Re: Obama caves on tax cuts for the rich

I'm just talking politics here, not taking a Dem or Rep side.

Maybe he caved, but it was politically naive for anyone to think that he wouldn't.

No one wants to be the guy to allow tax cuts to expire for anyone.

Dems didn't see this coming? If they couldn't make a deal when they held 59 seats in the Senate, what chance did they have after November 4th? And his debt commission sealed the deal.

http://www.nytimes.com/2010/11/11/us...l?pagewanted=2

The Bowles-Simpson plan includes one option that assumes only the lower-income rates are extended and another that ends all Bush tax rates and replaces the tax code with simpler, lower rates and many fewer tax breaks.

[goadam1]

Re: Obama caves on tax cuts for the rich

I'm psyched. Does the 2% drop on ss also comes as a drop in what I pay in for employees?

[dcarrigg]

Re: Obama caves on tax cuts for the rich

You're right about that, babbittd. That is what I get for writing in a moment of anger.

Still, who says he would be the guy that let tax cuts expire for everyone. Point the finger and play the game. Or be a statesman and do what's in the best interest of the country even when it's unpopular. I fear that in both this tax-cut 'compromise' and in the bi-partisan deficit commission, we're getting the worst of both worlds. Meanwhile nobody stands up to lead.

Sure, it may look like a good deal to the bottom line now, but I am certain we will feel the hangover on this one.

[dcarrigg]

Re: Obama caves on tax cuts for the rich

Doesn't look like it. Of course, the sausage is not yet finished...

http://www.washingtonpost.com/wp-dyn...120606577.html

[goodrich4bk]

Re: Obama caves on tax cuts for the rich

[QUOTE=dcarrigg;183265]You're right about that, babbittd. That is what I get for writing in a moment of anger.

"Or be a statesman and do what's in the best interest of the country even when it's unpopular."

Bingo. This was his moment of truth, and here is what he could have said:

"My fellow Americans, the smart people I rely upon for economic advice tell me that it is not wise to raise taxes at a time of economic uncertainty. Well, I appreciate their advice, but it doesn't square with our recent experience and I don't think that sentiment is the best that we can do. Let me explain.

In 1945, American's returned victorious from the world's largest and most devastating war. Fear spread that the returning soldiers would come home to the high unemployment the nation suffered throughout the prior decade. If ever there was a time to cut taxes even if it meant passing a massive deficit to the next generation, that was the time. After all, didn't the Greatest Generation just save the world from tyranny? Didn't they just leave the next generation an opportunity to prosper? Wouldn't it have been entirely moral for our fathers and mothers to have cut their tax burden for a well-deserved break?

Of course it would have. But they didn't. For our fathers and mothers who had just sacrificed so much to defeat forces of tyranny, never even considered passing on the nation's war debt to the next generation. Instead, under Democrat and Republican administrations alike, they raised the marginal tax rate to 91%. Yes, you heard that correctly: 91%. And, by the way, that was the marginal tax rate under a Republican, President Eisenhower. Oh, and they also sent men to the moon, built a national highway system, and lent millions of dollars --- a lot of money in those days --- to rebuild Europe and help create stable democratic socities there that survive to this day.

Today, we find ourselves, as we did 70 years ago, fighting on two fronts. As in WWII, we have been paying for this war with debt, not taxes. But unlike WWII, we have not asked for any sacrifice from Americans other than the ultimate sacrifice we have demanded of our volunteer miltary. These are the circumstances we find ourselves in at the end of 2010, the time that a Republican President and a Republican Congress elected to raise taxes.

The simple question before us is whether we should let those tax cuts expire, as the law requires, or pass a new law to extend some or all of them for some additional period of time. If we let the cuts expire, tax rates will return to the rates in effect under President Clinton. The highest rate will be 39.6% instead of 35%, and the capital gains rate will be 28% instead of 20%.

Let's review a little history. As I said, the top rate under Eisenhower was 91%. Under Kennedy it was 50%. Under Reagan is was 50% in his first term, 28% in his second. Under Clinton it went up to 35%, then 39.6% to balance the budget, which occurred in his last year in office. The Bush tax cuts lowered the rate again to 35%. So the issue that is causing so much consternation and debate is this: shoud the wealthiest among us --- the top 2% of our country's citizens --- pay an extra 4.6% of their income to help pay for the last eight years of war and the costs of digging ourselves out of the largest economic crisis since the Great Depression?

I've made my position clear. During my campaign and since my election, I have repeatedly called on Americans to help me change the way things work in Washington. I am asking for your help again tonight. Powerful, self-interested Americans are trying to claim that paying an extra 4.6% of their income will have terrible economic consequences. Many of these people have the good fortune of spreading this message through their own radio programs. People such as Rush Limbaugh, Glenn Beck, Sarah Palin --- they are all millionaires who stand to gain hundreds of thousands of dollars each if they can convince the other 98% of Americans --- most of the people listening to me at this moment --- to extend to them just about the lowest marginal tax rates in our history. Nowhere do I hear any of them explain why they can't pay 39.% when almost every wealthy person in the last 70 years paid much more than that and both they and the nation prospered.

If any of these millionaires want to explain to me why they are so special that they should only need to pay less than half of the marginal rate that people with their wealth paid in the 1950's to retire our war debts, I'm all ears. But I suspect they cannot. And, more importantly, they were not elected to lead this country. I was, and I take that responsibility very seriously.

So I say to my economic advisors, to the Wall Street Journal, to Fox News and to every other member of our generation demanding a tax cut: grow up. We're adults and we need to pay for our wars and our mistakes. The future of this country is in the next generation, and I will not burden it with the mistakes of our generation. Not on my watch. I will veto any bill that extends the Bush tax cuts for the top 2% of the country."

Sadly, I heard no such speech tonight. Even worse, I heard a man who believed he was being held hostage complain that he had to pay a necessary ransome. Not only did President Obama miss the opportunity to lead, he did it in such a cowardly way. I am thoroughly depressed and have taken my name off of the Organizing for American email list. This was really the last straw.

[dcarrigg]

Re: Obama caves on tax cuts for the rich

goodrich4bk, you put it more eloquently than I ever could have. Thank you.

[ThePythonicCow]

Re: Obama caves on tax cuts for the rich

Today, we find ourselves, as we did 70 years ago, fighting on two fronts.

Today we find ourselves fighting a deeply fraudulent war, justified by several of the most outrageous, dare I say evil, false flag operations in history, while at home our bankers have engaged in the greatest thefts in history, stealing tens or hundreds of trillions of dollars.

We are being asked to undergo austerity so that the killing and stealing might continue. To hell with that.

An honest government of the people deserves our support and the tax revenues appropriate to the endeavors we ask it to undertake on our behalf. A criminal mob deserves 3 square meals in jail. A treasonous murdering criminal mob, once convicted in a fair and open court, deserves the death penalty.

[goodrich4bk]

Re: Obama caves on tax cuts for the rich

True, but what's that got to do with the tax cut issue? Nothing appears to stop the runaway spending ---- not the Tea Party, not "starve the beast", not Mr. Change and Hope. Under Bush we went from $5 trillion to $10 trillion, and at this rate under Obama we'll get to $15 trillion by the end of next year. We are not going to default, so it must be repaid, with interest, by somebody in America. Who do you want that to be? Your children? I know you feel like you didn't start a war, incur the debt or decide to bailout the banksters, but that was done. As they say, "mistakes were made". Isn't it more just that the same generation of Boomers who incurred most of the debt in the past decade are also the ones who must repay it? And if we just keep kicking that debt down the road, within ten years all of those responsible will be retired in lower income brackets, really placing the burden on today's young --- who, incidentally, will be competing with low wage foreginers and will, therefore, be unable to earn their way out of peonage.

The scenario that will play out if we don't pay these debts now is exactly what is happening in Ireland as we speak. Debts incurred by specific people for specific gain were transferred to the general taxpayers and within just a few years those taxpayers, as represented by the Irish Sovereign, could not pay. So now their taxes are rising and employment is falling --- which means that younger Irish who had absolutely no responsibility for the mistakes of their parents, will be left in debt peonage.

Rail all you want against abusive government spending, but why do you think it will stop if those who benefit from it --- banks, military industries, big pharma, big ag, --- can so easily pass it on to the next generation? And given that Congress is owned by these interests, isn't moral shame, expressed by our commander-in-chief, the best way to stop it?

[ThePythonicCow]

Re: Obama caves on tax cuts for the rich

and will, therefore, be unable to earn their way out of peonage.

That's their intention, yes.

isn't moral shame, expressed by our commander-in-chief, the best way to stop it?

No man capable of such moral shame has a chance of being commander-in-chief.

[Prazak]

Re: Obama caves on tax cuts for the rich

It's for two years. Obama gets what he wants on extending unemployment insurance in the midst of the worst jobs outlook since the Great Depression. And he fulfills a central campaign pledge not to raise taxes on anyone making $250k. (We can agree or disagree with that pledge, but failing to keep such a central campaign pledge on taxes helped doom George HW Bush to a one-term presidency.) And they get to relitigate this in a Presidential election year. (Obama refused to give a 3rd year so his team clearly thinks this is an argument they will win.) And getting a deal done helps get more deals done, as the payroll tax cut will start to lead to broader tax reform (one hopes).

All in all, a very good deal, whether the progressive wing of the Democratic Party wants to accept that or not.

[goodrich4bk]

Re: Obama caves on tax cuts for the rich

That's their intention, yes.


No man capable of such moral shame has a chance of being commander-in-chief.

I have to admit you got me there. That may be true, but something inside me keeps thinking that some day I'll witness great leadership, and that posting these thoughts may speed along the arrival of such a day. But I admit that it is unlikely to come from my generation again.

[thunderdownunder]

Re: Obama caves on tax cuts for the rich

My view, for what it is worth is that Hope and change just sold out to the lowest denominator - moneyed interests.
You need to raise taxes and you need to now. You are spending one third more than you make and this cannot go on.
But I am of the belief that things unfold as they should and this may be a tipping point if the unemployed are not given the same condescension.
I am simply appalled that the Commander in Chief is of a lower standard than Daffy Duck was at his worst.

[BigBagel]

Re: Obama caves on tax cuts for the rich

If you cut taxes and don't cut spending you haven't cut taxes you've just deferred them. Basically we've transferred the taxes to future tax payers and future generations. If the Democrats had sense they would have referred to the tax changes as the Bush tax deferrals or Bush tax transfers not Bush tax cuts.