News Should the Bush tax cuts be extended?

[mheslep]

So now that most of the details are out on so called 'Tax Deal', I'd have to say I oppose this this deal, if not all the concepts. In addition to the legislation that keeps federal income taxes where they are for just two years and holds the estate tax to an increase of 35%, the 'Deal' also includes:

• Unemployment benefits, now at two years, extended for another 13 months: $57B
• Social Security tax break, i.e. payroll tax decrease of 2% (for one year?): $117B
• Individual tax credits, such as college costs, child credit, also two years: $8.3B
• Business tax breaks. Some 40 different special tax breaks, e.g. solar and wind: $69B

http://money.cnn.com/2010/12/07/news/economy/tax_cut_deal_obama/index.htm

I have several problems with this deal. First there are absolutely no spending cuts accompanying the new spending (i.e. unemployment benefits) or the new tax cuts (SS, business), making the deficit problem worse. Second, temporary tax breaks are known to be http://en.wikipedia.org/wiki/Permanent_income_hypothesis" Third, issues like income taxes deserve a simple stand alone vote, without all of the buy offs with the likes of energy and college credit.

Instead I prefer a simple up or down vote on all the income tax brackets at once; to be made permanent, that is, no built in expiration date. Nothing else. It may be that such a deal is not politically possible at the moment, forcing an increase on all income taxes in three weeks. So be it. A couple weeks after that the new House can and would bring such a vote to the floor and pass it, making it extremely difficult for the President or the Senate to oppose.

 

[WhoWee]

So now that most of the details are out on so called 'Tax Deal', I'd have to say I oppose this this deal, if not all the concepts. In addition to the legislation that keeps federal income taxes where they are for just two years and holds the estate tax to an increase of 35%, the 'Deal' also includes:

• Unemployment benefits, now at two years, extended for another 13 months: $57B
• Social Security tax break, i.e. payroll tax decrease of 2% (for one year?): $117B
• Individual tax credits, such as college costs, child credit, also two years: $8.3B
• Business tax breaks. Some 40 different special tax breaks, e.g. solar and wind: $69B

http://money.cnn.com/2010/12/07/news/economy/tax_cut_deal_obama/index.htm

I have several problems with this deal. First there are absolutely no spending cuts accompanying the new spending (i.e. unemployment benefits) or the new tax cuts (SS, business), making the deficit problem worse. Second, temporary tax breaks are known to be http://en.wikipedia.org/wiki/Permanent_income_hypothesis" Third, issues like income taxes deserve a simple stand alone vote, without all of the buy offs with the likes of energy and college credit.

Instead I prefer a simple up or down vote on all the income tax brackets at once; to be made permanent, that is, no built in expiration date. Nothing else. It may be that such a deal is not politically possible at the moment, forcing an increase on all income taxes in three weeks. So be it. A couple weeks after that the new House can and would bring such a vote to the floor and pass it, making it extremely difficult for the President or the Senate to oppose.

I agree, there is too much on the table - AGAIN.

I didn't realize the unemployment extension was for another 13 months (?)- what does that tell us about recovery?

 

[CAC1001]

I'm actually okay with extending unemployment as I think that while it may keep the unemployment rate higher than it otherwise would be a bit longer, there just aren't jobs out there right now. If the unemployment rate was clearly coming down, then yeah, end unemployment ,or else it'll stall the recovery, but as for now, the unemployment rate is up there. The people receiving benefits are not just lazy bums milking the system, a lot are people who need the money to get by at the moment.

 

[WhoWee]

I'm actually okay with extending unemployment as I think that while it may keep the unemployment rate higher than it otherwise would be a bit longer, there just aren't jobs out there right now. If the unemployment rate was clearly coming down, then yeah, end unemployment ,or else it'll stall the recovery, but as for now, the unemployment rate is up there. The people receiving benefits are not just lazy bums milking the system, a lot are people who need the money to get by at the moment.

I'm just looking at the time of the extension - 13 months - the original nbenefit was only for 6 or 9 months (can't recall - just know 13 mos is longer). This is not an optimistic time projection.

 

[mheslep]

I'm actually okay with extending unemployment as I think that while it may keep the unemployment rate higher than it otherwise would be a bit longer, there just aren't jobs out there right now. If the unemployment rate was clearly coming down, then yeah, end unemployment ,or else it'll stall the recovery, but as for now, the unemployment rate is up there. The people receiving benefits are not just lazy bums milking the system, a lot are people who need the money to get by at the moment.

Yet the data shows i) unemployment insurance inevitably correlates with about 1% of the unemployment, ii) most people on unemployment seem to find a job near the end of their unemployment insurance period.

Besides, none of the 'why' argument changes the fact that the deficit is at $1.3T and is made worse by more spending.

 

[CAC1001]

Yet the data shows i) unemployment insurance inevitably correlates with about 1% of the unemployment, ii) most people on unemployment seem to find a job near the end of their unemployment insurance period.

But isn't that usually with more standard recessions? ("recession" loosely used to refer to a crappy economy here as I know the economy isn't technically in a recession anymore). This is an unusually bad economy because of a very bad financial crises that occurred. While normally most of the people might find jobs when unemployment is ended, right now couldn't a lot of them end up with nothing?

Besides, none of the 'why' argument changes the fact that the deficit is at $1.3T and is made worse by more spending.

True.

 

[mheslep]

But isn't that usually with more standard recessions? ("recession" loosely used to refer to a crappy economy here as I know the economy isn't technically in a recession anymore). This is an unusually bad economy because of a very bad financial crises that occurred. While normally most of the people might find jobs when unemployment is ended, right now couldn't a lot of them end up with nothing?

Perhaps, that's counter to the history though. Anyway, I don't buy it. Working for someone else is not the only option. Especially in this country, one can start up some business, or write Iphone apps selling for a nickel rather than spending time online while collecting unemployment. Parts of the US are hiring now, especially Texas and the Dakotas which also have the benefit of being relatively cheap places to live with little or no state income tax. If somebody has used the full 99 weeks and had no luck, then sorry time to pack up and move to Texas, take the job you can get rather than the one you want until things get better. The act of doing that will make things better.

 

[Al68]

Well, it's a done deal. Now we need to permanently reduce the rates further, and eliminate the insidious estate tax.

And of course control spending. What are the chances Republicans will actually do that instead of betraying those of us who voted for them?

They have no excuses come January. They will have the "purse strings" and will be responsible for every dollar appropriated.

 

[mheslep]

So now that most of the details are out on so called 'Tax Deal',[STRIKE] I'd have to say I oppose this this deal, if not all the concepts. [/STRIKE] In addition to the legislation that keeps federal income taxes where they are for just two years and holds the estate tax to an increase of 35%, the 'Deal' also includes:
.

Upon consideration I'm retracting this. Approve the tax deal (they did) with the spending, and take out the spending next month when Pelosi gives up the gavel.

 

[WhoWee]

Shouldn't we rename this thread the "Obama tax cuts"?

 

[mheslep]

And of course control spending. What are the chances Republicans will actually do that instead of betraying those of us who voted for them?

That is the question. It depends I think on whether they can do away with earmark bribery, and so far, based on the actions of the Speaker to be it looks good.
http://politifact.com/truth-o-meter...6/john-boehner/rep-john-boehner-earmark-free/

 

[Al68]

Upon consideration I'm retracting this. Approve the tax deal (they did) with the spending, and take out the spending next month when Pelosi gives up the gavel.

But they can't do that. As soon as Obama signs the bill, the money has been appropriated, and Obama needs no further authorization to cut the checks.

The only way to stop spending already appropriated is to pass another law, which Obama can veto.

 

[Al68]

That is the question. It depends I think on whether they can do away with earmark bribery, and so far, based on the actions of the Speaker to be it looks good.
http://politifact.com/truth-o-meter...6/john-boehner/rep-john-boehner-earmark-free/

I'm not so sure. According to that same article, Boehner said he didn't oppose all earmarks.

But maybe there's a good chance of eliminating most of them.

As a side note, can you believe the stunt Reid actually tried to pull? Did he really think he could pass a monstrous pork-fest now? What was he thinking?

 

[mheslep]

As a side note, can you believe the stunt Reid actually tried to pull? Did he really think he could pass a monstrous pork-fest now? What was he thinking?

He was thinking he could get away with it, and almost did. I dislike Reid more than any other political figure out of prison that I can think of in modern US history.

 

[mheslep]

But they can't do that. As soon as Obama signs the bill, the money has been appropriated, and Obama needs no further authorization to cut the checks.

The only way to stop spending already appropriated is to pass another law, which Obama can veto.

All the spending for next year has to start in the House. Obama can veto, but he can't force them to put anything in there either. Hence the possibility of a standoff and a government shutdown. The House can also rescind money. As we saw from the Stimulus, the fed govt. doesn't move that fast.

 

[WhoWee]

As a side note, can you believe the stunt Reid actually tried to pull? Did he really think he could pass a monstrous pork-fest now? What was he thinking?

Why would you expect anything less of Reid? Btw - how is his train project coming along - anybody have an update?

 

[WhoWee]

During the signing, did President Obama indicate he inherited these tax credits (from Bush) - did he use the Bush name this time?

It's a good thing he didn't have to pay an inheritance tax.(sorry)

 

[Al68]

All the spending for next year has to start in the House. Obama can veto, but he can't force them to put anything in there either.

Perhaps I misread your post. I thought you were referring to spending that was already appropriated.

Sure, Republicans are under no obligation to continue any Democratic Party promise or agenda item, despite their predictable screaming of bloody murder. And I hope this time, Republicans don't agree to bloated spending like they did last time they got the house. They should realize that Democrats will scream the same exact "message" they have for decades no matter what Republicans do, unless of course they do the unthinkable and capitulate to every unreasonable demand.

 

[mheslep]

Perhaps I misread your post. I thought you were referring to spending that was already appropriated.

Both new and old. Through new appropriation they can net out to zero that which was just done, and as I understand it they can also rescind spending for that which hasn't actually been executed by the executive. As I said, having Congress appropriate doesn't mean the government turns on a dime to spend it all in two months.