Obama caves on tax cuts for the rich

[mesyn191]

Re: Obama caves on tax cuts for the rich

So, no, your children won't pay the price because your children are too young to have any significant savings to inflate away.

Oh they'll pay too you see. The gov. will have to inflate so much that the standard of living will drop like a rock. Growing up in what will soon become a defacto 3rd world country is no joke. And when they get older trying to find work and raise a family of their own, much less save, will be even harder than it is now.

[mesyn191]

Re: Obama caves on tax cuts for the rich

it's like I tell my kids.....it's not what you make but what you spend.

The big sacred cows that must either be reformed or cut massively to make a big dent in our debt: military/war/DoD spending and entitlements. You hear some politicians bitch and moan about pork barrel politics, illegals, etc, but that is relative chump change. A red herring to distract people from what the real issue is: class warfare. You could eliminate all of it and barely make a difference at all in our debt.

Fixing the tax structure so it is more progressive is a good start to improving the standard of living over all instead of just a few rich people who horde most of the wealth, but it is just one of things we need to do. Unfortunately politicians are all too eager to spend more money on useless military or "Homeland Defense" :puke: projects but can't be bothered to actually improve the welfare of the common person or the schools. Indeed, many of them want to even defund the public education system and go private only, which of course only the rich will be able to afford the good ones and college.

They want as many poor and uneducated people as possible, surprise surprise right?

[HDLee]

Re: Obama caves on tax cuts for the rich

"we not only spend more on our military than the rest of the world combined, we spend six times what second-place finisher China does on its military.That means we could cut our military spending in half -- making the budget deficit disappear in a few years, without raising taxes and while fully funding Social Security and Medicare -- and we’d still outspend our largest rival by threefold."

http://www.alternet.org/economy/1490...7/?page=entire

. . . .

HOUSE ON FIRE
Congressional Democrats Trash Obama-GOP Tax Cut Deal, Threaten To Scuttle It
http://www.huffingtonpost.com/2010/1..._n_793540.html

[Chris Coles]

Re: Obama caves on tax cuts for the rich

Personally, I think the problem is much more basic than most understand; it is that any new president coming into an existing organisation - has to take on board the thinking that remains within the mindset of the existing staff he inherits. In particular, with the White House, he inherited a core staff that were dedicated to a continuance of existing policies and his own personal experience was insufficient to enable him to question the Status Quo. Ergo, he carried on with the existing mindset.

The people we should be interviewing and arguing against, are those we cannot get in front of because they are out of sight.

[c1ue]

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.

I have 2 problems with this:

1) The assumption that tax cuts lead to economic growth (or lack of economic recession).

I would think the Bush era would have completely debunked this notion

2) That Obama is positioning the 'modified' renewed tax cuts as the political price to pay for extending unemployment benefits

Besides the fact that the Bush tax cuts expire DURING a Democrat dominated Congress, the entire notion of giving up $620 billion in (pre Bush) tax revenue - which was national policy 11 years ago - in order to afford $56 billion in unemployment extension seems quite silly.

Economic Populist put it best: http://economicpopulist.org/content/...grand-betrayal

Here's how bad it is
Here's what Louisiana Senator Mary Landrieu said about the deal. Landrieu is a conservative Southern Democrat with big energy agenda. She represents a very conservative state. Even she knows this deal is a disaster.

"He's enthusiastic about this new arrangement dealing with the Republican caucus that stated, according to their leader, their number one objective is to unseat him. I can understand trying to appeal to independent voters. I do that myself. I think it's very important. But this sort of enthusiasm for caucusing with Republicans – and he didn't even, literally, didn't even speak to the Democratic caucus. Not any of it. Not the liberal group, not the moderate group, not the conservative group," said Landrieu. Senate Democrats Openly Upset with Tax Cut Deal

When Mary Landrieu opposes your strategy on tax cuts for the rich, you know you've gone too far. But Obama is just doing his job, the one he signed up for - an elegant, charming functionary for the ruling class who could fool people just long enough to allow the Bush bailout looting to continue in full force.

I don't per se have an issue with money being spent in deficit by the federal government, but I do have a problem with money being spent in deficit primarily going to those who clearly have not done anything to benefit the economy.

Lastly I would note that it is quite amusing the Obama chooses to fulfill his campaign pledge one this subject, when there are SOOOO many he has not.

Raise taxes,lower taxes.We're still focusing on the wrong side of the equation. it's like I tell my kids.....it's not what you make but what you spend.

Or as has been talked about on iTulip on many occasions such as http://www.itulip.com/forums/showthr...e-Zero-percent.

Spending money on economic development - which creates jobs, enlarges the GDP, adds to the knowledge base - these are activities which have return on deficit spending investment.

Spending money on tax cuts does none of the above. Neither to the middle class/poor - who just get to consume a slightly better brand of foreign import, nor to the rich who just pile up the money along with all they already have.

[don]

Re: Obama caves on tax cuts for the rich

Best visual summation yet:

Surely the financial crisis is over and the Banks will cease their threats and demands

All in Our Time....

http://jessescrossroadscafe.blogspot...amas-deal.html

[Prazak]

Re: Obama caves on tax cuts for the rich

I have 2 problems with this:

1) The assumption that tax cuts lead to economic growth (or lack of economic recession).

I would think the Bush era would have completely debunked this notion

2) That Obama is positioning the 'modified' renewed tax cuts as the political price to pay for extending unemployment benefits

Besides the fact that the Bush tax cuts expire DURING a Democrat dominated Congress, the entire notion of giving up $620 billion in (pre Bush) tax revenue - which was national policy 11 years ago - in order to afford $56 billion in unemployment extension seems quite silly.

I didn't say these tax cuts would lead to economic growth. Because they won't. (Indeed their lapsing wouldn't have put all that much of a negative dent in the economy either.) But Obama did promise that taxes would not go up on his watch for those earning less than $250k. And he did want to extend unemployment benefits. Accepting a two-year extension on the rates for those earning more than $250k was the price for keeping his promise that taxes wouldn't rise on those earning less than $250k and for getting temporary relief to a lot of people who are suffering right now. It's as simple as that.

He didn't have the votes, even in a Democratic-controlled Congress, to get either the extension in benefits or the rate extension for those earning less than $250k. He made a deal. (It's too bad we we weren't living in the internet age when Reagan was cutting deals with Tip O'Neill, including several deals to raise taxes; it might have spared us the beatification of Reagan on the right.)

What's pissing off the Dems on the left is that Obama also accepted a deal on estate taxes that tracked what Republicans had proposed earlier this session. (That's not a deal that bothers me all that much, because the status quo that was about to come back into effect was onerous.) And what he got in return was another tax break -- 2% off social security for employees. That is a tax cut that will indeed have a positive economic effect. (And note who was the sponsor of that estate tax legislation: Sen. John Kyl, who is currently blocking the Russian START treaty, so the deal might reach farther than the budget.)

His choice was either to allow the Republicans to cynically put Congress in a headlock while unemployment benefits terminated and one of his central campaign promises was broken, or to position himself as keeping his promise and to doing everything possible to pull the country out of this major recession, including preventing a tax rise during a recession and putting 2% of payroll taxes back into the pockets of every employee. His re-election in 2012 rises or falls on how the economy is doing; scoring a political point off a Republican-directed deadlock does him no good whatsoever.

[Mashuri]

Re: Obama caves on tax cuts for the rich

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.

Just gotta bring this comment from TPC back to front and center. He summed it up best.

It's bad enough that I'm already a slave, but what my slave masters have been doing with my productivity makes it even worse.

[c1ue]

Re: Obama caves on tax cuts for the rich

I didn't say these tax cuts would lead to economic growth. Because they won't. (Indeed their lapsing wouldn't have put all that much of a negative dent in the economy either.) But Obama did promise that taxes would not go up on his watch for those earning less than $250k. And he did want to extend unemployment benefits. Accepting a two-year extension on the rates for those earning more than $250k was the price for keeping his promise that taxes wouldn't rise on those earning less than $250k and for getting temporary relief to a lot of people who are suffering right now. It's as simple as that.

He didn't have the votes, even in a Democratic-controlled Congress, to get either the extension in benefits or the rate extension for those earning less than $250k. He made a deal. (It's too bad we we weren't living in the internet age when Reagan was cutting deals with Tip O'Neill, including several deals to raise taxes; it might have spared us the beatification of Reagan on the right.)

All true.

But you're missing one important point: by not making the deal, the failure to extend unemployment benefits would then be the Republican's fault.

After all, no one can blame Obama or the Democrats if they try to pass an unemployment legislation this year, are blocked, and then the bills never get out of committee next year.

Obama has taken ownership of an issue which the Republicans would likely have been forced to cave in on eventually - losing much political capital in the process - and has now angered both the Progressive side of his own party as well as the ideological Left.

Politically this is an own goal. To say this is going to help his case with the independents is an assertion which is completely unclear to me - Obama tarring the Republicans (rightly) with obstructionism is far better than tarring himself as a tool of the moneyed interests.

Assuming, of course, he isn't such a tool.

What's pissing off the Dems on the left is that Obama also accepted a deal on estate taxes that tracked what Republicans had proposed earlier this session. (That's not a deal that bothers me all that much, because the status quo that was about to come back into effect was onerous.) And what he got in return was another tax break -- 2% off social security for employees. That is a tax cut that will indeed have a positive economic effect. (And note who was the sponsor of that estate tax legislation: Sen. John Kyl, who is currently blocking the Russian START treaty, so the deal might reach farther than the budget.)

His choice was either to allow the Republicans to cynically put Congress in a headlock while unemployment benefits terminated and one of his central campaign promises was broken, or to position himself as keeping his promise and to doing everything possible to pull the country out of this major recession, including preventing a tax rise during a recession and putting 2% of payroll taxes back into the pockets of every employee. His re-election in 2012 rises or falls on how the economy is doing; scoring a political point off a Republican-directed deadlock does him no good whatsoever.

Again, I understand your viewpoint but again, I point out that this is overly simplistic political thinking.

If Obama were to propose a New (New New?) Deal which would offset the return to previous taxes (note Obama also failed to even point out that he isn't doing anything but allowing the Republican/Bush deal to consummate), he could then just as easily say he kept his campaign promise.

And by doing so, he would again put the onus on the Republicans to put forward a constructive plan moving forward as opposed to acting like spoiled children.

The 2% break may put some money back into the working class' pockets, but it is far more than offset by the gains the rentier class gets. And doesn't address any of the real issues at hand: the travesty of capital gains taxes among others.

The point can be seen in the full article from the Economic Populist - the relative numbers show just who gets what: $56 billion for unemployed, $120 billion for those working in the working class, and $500 billion in tax breaks - the vast majority of which goes to the wealthy.

Munger's convenient comment about the tax breaks 'helping' everyone under $250K as well as that part of the wealthy's income under $250K ignores the demographic breakdown of income taxes: much as 25% to 50% of American's don't pay income tax, so too do they not benefit whatsoever from cuts in income taxes.

Those with $250K in taxable income, on the other hand, gain full benefit.

[don]

Re: Obama caves on tax cuts for the rich

O.....Bama

Can this really be the End?

To be stuck inside a Depression

With the Spare Change Blues Again.....

[flintlock]

Re: Obama caves on tax cuts for the rich

Excellent point, and sadly missing from the official message.

x2.

[flintlock]

Re: Obama caves on tax cuts for the rich

Raise taxes,lower taxes.We're still focusing on the wrong side of the equation. it's like I tell my kids.....it's not what you make but what you spend.

You're right but nobody wants to talk about that. Everyone is looking for a painless way out.

[dcarrigg]

Re: Obama caves on tax cuts for the rich

House Dems take a stand??!?

http://www.politico.com/news/stories/1210/46190.html