News Should the Bush tax cuts be extended?

[OmCheeto]

But yes, resinding unspent bailout money should certainly be considered -- to cut deficit spending

What the what??

I just heard the other day that the unspent money was all assigned to future "smart things" to do.

Do you doubt the wisdom of Bill?

 

[lisab]

What the what??

I just heard the other day that the unspent money was all assigned to future "smart things" to do.

Do you doubt the wisdom of Bill?

Lol, future smart things...that made me laugh!

 

[russ_watters]

And speaking of things not happening...the third item on the list, cutting social programs. I can't imagine any politician explaining to retired folks their benefits will be cut to allow the wealthy to keep their Bush tax cuts!

Well no doubt, when SS is inevitably cut, it won't be explained - except by opponents - with such heavily biased language (at least not biased in that direction).

 

[russ_watters]

So you don't have a cogent response?

To a strawman? Why bother? Make a cogent point and you'll get cogent responses. Everything you say here is propaganda. On this particular point, you said:

It would be instructive if you can explain how protecting the profits of the insurance companies is critical to the health of our economy.

And since no one uses that as a justification, there isn't anything to explain.

 

[OmCheeto]

Lol, future smart things...that made me laugh!

Ok. Let's say you get a phone call tomorrow, and Molliemae has cancer.

Let's say the doctor says it will require you to upfront $50k to cure her for life.

What are your choices? Let her die? Or go into debt and let her live a full and productive life?

hmmm...

5 years down the road, your debt is paid, and Molliemae is kicking butt, paying for your retirement.

America is sick right now. We've got a bad assed addiction to oil, and a very expensive medical habit.

Health care has been passed. Might cut a trillion or so from our addiction in the next decade. Let's see where a few hundred extra billion will get us.

After all, a billion divided by 300 million is only about $3.00.

 

[CAC1001]

Raising taxes is not going to stop government growth with the Democrats. They are too tempted to create big government. We could implement the following:

Let ALL the Bush tax cuts expire
Raise the top marginal income tax rate to 50% (like in the UK)
Eliminate the cap on SS taxes
Implement a carbon tax
Implement a VAT tax on everything

Let's pretend a boatload of revenue comes in. I can't prove it, but I would be willing to bet that the government would somehow find a way to spend all of this money and only make the problem worse.

I do not for one second believe the Democrats in government would go, "WOW, look at all of this additional revenue! This is great! Now we can cap government spending completely and put all of this towards paying down the debt and deficit."

Democrats currently have a kind of unique argument when it comes to spending; during prosperous times, when the Treasury is flush with tax revenue, they want to spend boatloads of money because they wholeheartedly believe the solution to every major societal problem is a government program.

Need to fix education? More spending and government.
Need to fix poverty? More spending and government.
Need to fix crime? More spending and government.
Need to fix healthcare? More spending and government.

They seem to ignore that recessions happen and when they do, tax revenues will be slashed. However, in times of recession, Democrats then switch to the:

"The worst thing you can do in a recession is to cut spending. Therefore, we need to increase spending with massive stimulus."

In saying this, they ignore two facets of Keynesian economics:

1) Deficit-spending to stimulate must be temporary, not structural (i.e. you do not use a trillion-dollar stimulus as an excuse to increase the size and scope of government).

2) Once the recession ends, and the economy is prospering, you are to clamp down on spending and become very fiscally-conservative, in order to pay down the deficit and debt you ran up stimulating the economy during the recession. You are not supposed to go and start spending wildly.

So whether the economy is prospering or the economy is in recession, Democrats will always argue for "more spending."

Under Bill Clinton, the Republicans were fiscally-conservative, but then once President Bush won office, they did a 180 and switched to being Big Government Conservatives. We thought the Republicans had set a record with spending, but now the Democrats seem bent on outdoing them.

On the state level, a problem I have read is the public employees unions. These have accounted for a lot of the growth of state budgets. Since the Democrats are beholden to these, we will likely not see any kind of fiscal conservatism in Democrat-run states (or cities or counties either probably) as long as they have influence. The public employees unions do two things:

1) Lobby for increases in the sizes of government programs that employ their members (larger programs = more members)
2) Lobby for whole new government programs to create new government workers
3) Lobby for constant increases in pay, benefits, etc...for the workers.

In the process, they rob the public treasuries of their states and cities and counties. When the fiscally-conservative Republicans end up in control of such states, usually warfare breaks out it seems.

Right now, there are no fiscal conservatives at the helm of our government. There is nobody in either party that seems capable of espousing and fighting for conservative fiscal policies.

And that is why allowing the Bush tax cuts to expire for the top 2% is pointless. The government will just spend the money. There are some people in the Republican party espousing conservative fiscal policies, for example Wisconsin Congressman Paul Ryan, New Jersey Governor Chris Christie, Rick Perry, South Carolina Republican candidate for Governor Nikki Haley, Florida Senate candidate Marco Rubio, etc...

 

[WhoWee]

Ok. Let's say you get a phone call tomorrow, and Molliemae has cancer.

Let's say the doctor says it will require you to upfront $50k to cure her for life.

What are your choices? Let her die? Or go into debt and let her live a full and productive life?

hmmm...

5 years down the road, your debt is paid, and Molliemae is kicking butt, paying for your retirement.

America is sick right now. We've got a bad assed addiction to oil, and a very expensive medical habit.

Health care has been passed. Might cut a trillion or so from our addiction in the next decade. Let's see where a few hundred extra billion will get us.

After all, a billion divided by 300 million is only about $3.00.

If it were only that simple...
http://www.cancer.gov/aboutnci/servingpeople/CostOfCancer

 

[OmCheeto]

So whether the economy is prospering or the economy is in recession, Democrats will always argue for "more spending."

Why is it then that deficit spending goes up under Republican presidents, and down under Democratic presidents?

 

[nismaratwork]

Why is it then that deficit spending goes up under Republican presidents, and down under Democratic presidents?

I'd add to that, how is the DHS 'smaller' government... and 2 wars. *shrug*... I think people still believe the ideology matches the actions, and that just isn't the case.

 

[WhoWee]

Why is it then that deficit spending goes up under Republican presidents, and down under Democratic presidents?

Defense

 

[nismaratwork]

Defense

I believe we can safely characterize Iraq as "offense" in every sense of the word...

 

[WhoWee]

I believe we can safely characterize Iraq as "offense" in every sense of the word...

...
I thought everyone accepted that:
Dems increase spending on social programs (get more votes) and cut defense when possible.
Repubs invest in defense and try to control runaway social spending.

 

[nismaratwork]

...
I thought everyone accepted that:
Dems increase spending on social programs (get more votes) and cut defense when possible.
Repubs invest in defense and try to control runaway social spending.

I would say that Dems funnel money to their base, which includes AARP, unions and more (therefore, social programs are part of the vehicle), and Republicans do the same for their donors... defense contractors, big-pharma. Each diverts money from the opponent's buddies to their own, and what you've described the narrative that each uses.

 

[WhoWee]

...and we wonder why the TEA party is so popular?

 

[rolerbe]

Whack all those 'rich' people?

Just for perspective, I took my first salary after graduating in 1980 (one for which NOONE would accuse me of being rich) and accelerated it assuming 3% average rate of inflation (for which I have references), and determined that my current salary -- for which I will certainly be smacked as 'rich' constituted a 2.6% average annual increase (over the inflation adjust).

Labelled as 'rich' and penalized for it? Not right. Just not right.

 

[nismaratwork]

...and we wonder why the TEA party is so popular?

Oh, I get the attraction of anything other than the ****wits who run our country now, but I don't think the solution is a slightly different flavor of ****wit. The tea party is popular because a monolithic conservative message is easier to package and disseminate than a more nuanced message which adapts to circumstances.

 

[Ivan Seeking]

The only President to actually reduce our debt to GDP ratio, since Carter, was Clinton.

That's thirty years of evidence. I've seen enough. Cite all the theories that you want, we have the evidence.

Beyond that, eight years of Republican control, and thirty years of supply-side economics led to the biggest economic disaster since the depression. Now the right complains about what it takes to fix the mess. Now I've really seen enough.

 

[turbo]

Oh, I get the attraction of anything other than the ****wits who run our country now, but I don't think the solution is a slightly different flavor of ****wit. The tea party is popular because a monolithic conservative message is easier to package and disseminate than a more nuanced message which adapts to circumstances.

It's easy to understand the "taxed enough already" appeal to people who haven't thought through the consequences of keeping the Bush tax cuts. First of all, most people in the lower to middle classes are wage-earners, so the IRS has long-established methods of ensuring the withholding of payroll taxes.

What about the top 1-2%? Are they drawing paychecks against which payroll taxes can be applied? Many derive most of their income from trading in investments, collecting dividends, and getting capital gains, and there are lots of ways available to them to offset taxable income with losses, defer capital gains, etc to minimize their tax liability. The Tea-Party members will probably call you a liar or ignore you if you say that the wealthy will benefit disproportionately from an across-the-board extension of the Bush tax cuts, simply because they don't know what the Bush tax cuts entailed, and who benefits from them. Getting people to vote against their own best interests is easy if they remain willfully ignorant.

 

[Ivan Seeking]

Extend the tax breaks for the middle class. Give tax breaks for the rich and corporations, but only for domestic investment. The R&D tax credit is a start.

 

[WhoWee]

Extend the tax breaks for the middle class. Give tax breaks for the rich and corporations, but only for domestic investment. The R&D tax credit is a start.

I could not agree more - with regards to a focus on tax credits that reward domestic investment.

We need to stimulate private sector investment - for industries other than defense.

 

[WhoWee]

Whack all those 'rich' people?

Just for perspective, I took my first salary after graduating in 1980 (one for which NOONE would accuse me of being rich) and accelerated it assuming 3% average rate of inflation (for which I have references), and determined that my current salary -- for which I will certainly be smacked as 'rich' constituted a 2.6% average annual increase (over the inflation adjust).

Labelled as 'rich' and penalized for it? Not right. Just not right.

You might want to consider one of these for your avatar.
http://www.bing.com/images/search?q=fat+cat&FORM=IGRE&qpvt=fat+cat#

 

[rolerbe]

No. What we are seeing (and doing) is the leveling of the american wage-earner to reduce to world-wide averages. The whole world cannot be brought up to American lifestyle standards, there aren't enough resources to squander. Therefore, we have to be brought down to a lower standard. Unfortunately, just raising taxes doesn't do that.

In order that the rate at which the US standard of living is lowered be kept at a level that won't cause panick or revolt, wages will have to increase (but not the full amount) to cover the increased tax burden. As a result, we become less competitive in the world market, driving jobs overseas, while the middle class sink slowly in the west.

If anyone thinks 2.6% per year is 'making it big', you are either deluded or have your sights set too low.

 

[CAC1001]

Why is it then that deficit spending goes up under Republican presidents, and down under Democratic presidents?

It doesn't. The only reason it went up under Reagan was because of four reasons:

1) His tax cuts, which initially cut revenues
2) The Federal Reserve hiking interest rates, which automatically blew up the deficit
3) Reagan's increasing the defense budget, which was necessary to re-build the defenses
4) The Democrat controlled Congress of the time refused to reduce their social spending

Nonetheless, the deficit began shrinking under Reagan anyhow around 1985-ish.

The only President to actually reduce our debt to GDP ratio, since Carter, was Clinton.

I wouldn't say it was per se Clinton that did it. Clinton just signed all that stuff Newt Gingrich and the Republicans in Congress sent up to him. Clinton tried to revert to big government upon being elected President. He runs saying, "The Era of Big Government is Over" and promises a tax cut for everyone.

Then he gets elected President, and says, "Well sorry, the deficit is too big, we have to raise taxes to close it up." Then he goes and tries to engage in creating government healthcare.

Then in 1994 the Congress turns Republican for the first time in forty years. Clinton then pivots and for the most part governs like a Republican. He signed welfare reform, NAFTA, a capital-gains tax cut, and signs the Gramm-Leach-Bliley Act, which removed the decades-long barrier between investment banking and commercial banking.

Also remember the Dot Com bubble took off in 1995 which increased revenues and the defense budget was slashed after the Soviet Union fell.

That's thirty years of evidence. I've seen enough. Cite all the theories that you want, we have the evidence.

Yes, tremendous evidence that shows that when one governs via conservative policies, the economy will in general prosper it seems. When you judge a President, you need to look at what policies they signed into law, and also what party had control of Congress.

Nixon was a Republican, and a Keynesian, but he support gun-control, government healthcare, enacted price controls, etc...he also created the Environmental Protection Agency.

Beyond that, eight years of Republican control,

It was six years. The Republicans lost control of Congress in 2006, upon which Bush then was pretty much a lame duck.

Also, Bush governed like a Democrat in many ways. President Bush did the following:

1) Said he would re-sign the Assault Weapons Ban if the Congress would renew it
2) Signed what was at the time the largest expansion of the government into healthcare in years
3) Expanded the Federal government into education
4) Signed the restrictive Sarbannes-Oxley legislation over the financial system
5) Tried to grant amnesty to illegal immigrants

If you ignore their foreign policies, then one could say Clinton governed like a Republican who just happened to raise taxes early in his administration, and Bush governed like a Democrat who just happened to sign a tax cut early on.

Clinton's other leftwing policy, his attempt at government healthcare, failed, and Bush's other rightwing policy, his attempt at partially privatizing Social Security, failed.

and thirty years of supply-side economics led to the biggest economic disaster since the depression.

What led to the economic crisis was the housing bubble, which itself was partially-influenced by Fannie Mae and Freddie Mac, and bad monetary policy on the part of the Federal Reserve.

Remember also, Bush increased regulation on the financial industry and he tried to increase regulation on Fannie Mae and Freddie Mac but that fell through (it did pass in 2008, but after Fannie/Freddie had collapsed).

Now the right complains about what it takes to fix the mess. Now I've really seen enough.

As I see it, Obama is in many ways just Bush 2.0:

Bush: Massive increase of government into healthcare.
Obama: Even bigger more massive increase of government into healthcare.

Bush: Increase of government into education.
Obama: Wants to increase scope of government far more into education (and already nationalized the student loan program in the healthcare bill)

Bush: Increase of government into financial markets
Obama: Signed most massive increase of government into financial markets since Great Depression

BTW, Republicans arguing for limited government is not the same as arguing for supply-side economics. Keynesian economics is conservative to the core. That's one of its principle components. Run surpluses in prosperous times by being fiscally conservative, then gun up the budget and/or cut taxes (demand-side) and run a deficit if necessary for economic stimulus during recessions, then switch back to fiscal conservatism once the economy recovers (and undo the demand-side tax cuts).

 

[CAC1001]

I'd add to that, how is the DHS 'smaller' government...

That's another good point, Bush also created the DHS, a whole new government bureaucracy.

and 2 wars.

I don't know the numbers exactly, but I had heard somewhere (AND COULD BE WRONG) that the wars in Iraq and Afghanistan accounted for only a small portion of the deficit spending that occurred during the Bush years.

*shrug*... I think people still believe the ideology matches the actions, and that just isn't the case.

The Republicans lost their way. Hopefully they will get it back. As it is, both parties in Washington have wanted big government for the past decade, they just disagreed over the kind of big government.

 

[flynjack]

DHS was a name a change and the combining of existing agencies. US Customs, INS, US Coast Guard and others all under one hat. It did not add new personnel initially merely changed their names. It has grown primarily in the ICE and Border Patrol, both of which needed to expand to accommodate the changing threat.

I don't know how anyone can define a business that makes 250,000 as being rich. So including this bracket in extending the tax cuts makes sense to me. One cannot expect companies to increase hiring and expenses while taking on a tax hike. I do like the idea of giving incentives in the form of tax cuts to companies reinvesting in America.

The TEA party is popular because it has simple principles that most people can agree with without the baggage of social issues. Smaller government, constitutional government, and promoting capitalism. TEA party folks don't care what political party affiliation you have if you go with these principals.

 

[nismaratwork]

DHS was a name a change and the combining of existing agencies. US Customs, INS, US Coast Guard and others all under one hat. It did not add new personnel initially merely changed their names. It has grown primarily in the ICE and Border Patrol, both of which needed to expand to accommodate the changing threat.

I don't know how anyone can define a business that makes 250,000 as being rich. So including this bracket in extending the tax cuts makes sense to me. One cannot expect companies to increase hiring and expenses while taking on a tax hike. I do like the idea of giving incentives in the form of tax cuts to companies reinvesting in America.

The TEA party is popular because it has simple principles that most people can agree with without the baggage of social issues. Smaller government, constitutional government, and promoting capitalism. TEA party folks don't care what political party affiliation you have if you go with these principals.

A name change from what? It added a new level of bureaucracy... I'd call that more than a name change.

 

[rcgldr]

I don't know how anyone can define a business that makes 250,000 as being rich.

It was my impression that the $250,000 is in reference to personal income for a couple. Businesses pay a corporate tax on their profits. As far as "rich" goes, it's a subjective term, but to over 50% of households in the USA with less than $50,000 in income, $250,000 would probably seem "rich" to them.

 

[CAC1001]

It was my impression that the $250,000 is in reference to personal income for a couple. Businesses pay a corporate tax on their profits.

Well C-Corporations do. If an S-Corporation, the business will pay at the individual rate. The corporate tax rate paid by C-Corporations varies depending on the size of the business. I don't know how LLCs and LLPs file taxes.

 

[rcgldr]

If an S-Corporation, the business will pay at the individual rate.

The business doesn't pay income taxes, instead the business income (or losses) are passed on to the shareholders which then pay tax on that income (or loss) the same as any other income (I assume this avoids FICA and SS medical taxes).

 

[flynjack]

A name change from what? It added a new level of bureaucracy... I'd call that more than a name change.

I was trying to explain that DHS was made up of existing agencies it did not add a level of bureaucracy it reorganized existing agencies. INS for example ceased to exist as an agency and its people were placed under CBP and ICE. The law enforcement authorities came with the agencies that were brought into DHS. Not new just new names. Same thing happened when the Bureau of narcotics and dangerous drugs became DEA only this was much larger in scope.