Should the Bush tax cuts be extended?

[CAC1001]

The people who resist allowing tax cuts for the wealthy to expire have no justification to fall back on, except their subservience to the wealthy.

This is simply nonsense. We can raise the taxes once the economy is healthy, but right now, it could dis-incentivize investment and it could harm small businesses. We don't want to penalize job creation at all right now.

The US has very liberal rules and regulations regarding business, investment, etc. The people that make millions and billions under our system should be expected to pay to support that system. There is nothing wrong with a progressive tax system in which the people who make the most money pay a higher percentage of their earnings in taxes. I expect someone will jump in now and call me a Marxist, but let's look back at the establishment of SS in the 30's. It helped keep old people from starving and freezing to death.

What does SS have to do with it? SS was supposed to be a system you pay into and then get paid back out of. It had nothing to do with taxing the wealthy.

The GOP mantra of "never raise taxes in a recession" is pretty lame when you look back at how bleak things looked in the 1930s.

Raising taxes during the 1930s is likely part of what caused the Depression in the first place.

My parents were born in the 20's and were raised in abject poverty. It would be hard for you to find 2 people who were more fiscally conservative, but they both voted Democrat consistently, thanks to FDR.

FDR did a lot of good things that made the Democratic party popular, such as SS, unemployment insurance, he did create jobs, and the infrastructure programs he created that built roads ports, electrical infrastructure, etc...allowed many formerly backwoods areas to become thriving economies. These were the good aspects of the New Deal.

These types of Democrat were the good form of Democrat. Today's Democrats are different.

I supported Republican causes in the 60's and thereafter, until Reagan sold out to the neo-cons.

In what way? Reagan was so fiscally-conservative that he was at one point going to cut the school lunch programs, but ultimately decided not to. Many of the people who hated Reagan hated him for the government he cut.

 

[Astronuc]

Some perspective on the subject.

http://nymag.com/news/intelligencer/topic/69931/
ONE MILLIONAIRE’S TAX BILL
Year: 2000
Income: $406,000
Taxes paid: $40,376 (<10%)

Year: 2009
Income: $398,000
Taxes paid: $18,818 (<5%)
(Money earned through investments is often taxed at a lower rate than wages.)

I pay about the same as the 2009 taxes, but I earn quite a bit less than $400K. I don't imagine he works harder than me.

http://www.fiscalstrength.com/

 

[WhoWee]

To get us back on track - here is a write up from the (NOT Right) Left perspective
http://www.huffingtonpost.com/stephen-herrington/let-the-bush-tax-cuts-exp_1_b_794233.html

"Let the Bush Tax Cuts Expire in 2010 or Make Matters Worse"

"What raising taxes on the rich will do is put some revenue in the pipe to support state budgets and forestall the shift of state tax burdens to the already less fortunate. What letting all the Bush tax cuts expire will do is the exact same thing with hardly any effect on the middle class and none on the poor who pay no taxes anyway. Half of Americans pay no taxes at all and are, in fact, dependent on social programs to make ends meet at all. This is because wages have not kept pace with inflation and poverty levels have risen sharply in the last decade. Government has stepped in and is literally subsidizing business and the rich by borrowing money to supplement the incomes of the working poor. Wal Mart is the prime example, it paying so little that its employees qualify for Medicaid. Wal Mart's health insurance plan is Medicaid."

It gets better...

"If the Bush tax cuts expire, some $370 billion dollars will be collected by government instead of being in the pockets of consumer's and the rich. That's 2.6% of GDP going to government coffers instead of being spent or saved by individuals. In light of the magnitude of these numbers, where that money goes is of serious concern. The answer is simple though. It's all spent by government and with certain foreign and corporate welfare dalliance's excepted, the money goes right back into the economy and shows up over a year in every paycheck or government benefit not matter who you are. Upset over taxation and spending at the level of the middle class is nothing but an argument over where and how the money is spent and is economically neutral. Even regressive taxes are beneficial if returned in benefits to the poor, but the problem is that they usually are not. Regressive taxes are meant most often to relieve the tax burdens of the rich, in some tax fairness melodrama that ignores a broader sense of justice.

What damages economies is when money is lost from the economy. In the case of the Great Depression and now our Great Recession, the rich were, and now are, at a peak in terms of how much of the nation's per capita income went to them. Now as in 1929, the rich took money out of the economy and "invested" it in non productive speculation apart from the real economy. Some $18 trillion in corporate cash are sitting on the sidelines waiting in vain for some market magic to offer some reason to re-enter the real economy. The notion that wealth is invested in economies and finances new homes and factories hasn't been true for over a century, not since Dow and Jones set up shop on Wall Street. The bulk of wealth now circulates in and out of stocks, bonds, currencies, commodities and hedge funds and will never see the real economies of the world again unless it is taxed back into it and spent by governments. "

I guess 401K's and Pension funds are no longer participating in the Market and IPO's have been eliminated?

Perhaps it is best to do nothing - until next month.

 

[CAC1001]

Some perspective on the subject.

http://nymag.com/news/intelligencer/topic/69931/
ONE MILLIONAIRE’S TAX BILL
Year: 2000
Income: $406,000
Taxes paid: $40,376 (<10%)

Year: 2009
Income: $398,000
Taxes paid: $18,818 (<5%)
(Money earned through investments is often taxed at a lower rate than wages.)

I pay about the same as the 2009 taxes, but I earn quite a bit less than $400K. I don't imagine he works harder than me.

Capital gains and dividends are taxed lower than ordinary income because oftentimes the corporations from which the money is obtained themselves pay corporate taxes and also investment taxes, which ultimately can mean a triple tax.

 

[Gokul43201]

Reagan was so fiscally-conservative that he was at one point going to cut the school lunch programs, but ultimately decided not to. Many of the people who hated Reagan hated him for the government he cut.

Ummm ... Reagan spent more than every single President before him, outside of the WWII period.

He also broke the record on peacetime deficits.

Source: http://www.usgovernmentspending.com...tack=1&size=l&title=&state=US&color=c&local=s

 

[WhoWee]

Reagan got a pass because the Soviet Union imploded.

 

[Gokul43201]

Reagan got a pass because the Soviet Union imploded.

It's one thing to say he gets a pass for the spending, and quite another thing to describe him as the pinnacle of fiscal conservatism.

 

[Astronuc]

Reagan got a pass because the Soviet Union imploded.

Of course the Soviet Union imploded, but it had nothing to do with the deficit spending in the US. The SU had cancer - corruption and a decaying infrastructure. Reagan's administration wasted a lot of money. On the other hand, it made a few Americans very wealthy.

 

[Gokul43201]

Some perspective on the subject.

http://nymag.com/news/intelligencer/topic/69931/
ONE MILLIONAIRE’S TAX BILL
Year: 2000
Income: $406,000
Taxes paid: $40,376 (<10%)

Year: 2009
Income: $398,000
Taxes paid: $18,818 (<5%)
(Money earned through investments is often taxed at a lower rate than wages.)

I pay about the same as the 2009 taxes, but I earn quite a bit less than $400K. I don't imagine he works harder than me.

http://www.fiscalstrength.com/

Hmmm. I earn about 10% of that and pay about 30% of my income in taxes.

 

[turbo]

Reagan got a pass because the Soviet Union imploded.

Reagan not only got a pass, he got a folk-following for "out-spending" Russia into bankruptcy. Not true. The Soviets were already on the decline and he just happened to be on-watch when the inevitable crash occurred. We need to gain some perspective, and exercise a bit of honesty with respect to history. I don't see a lot of that in our media, and there's not that much of that perspective on this forum, either.

Right-wing members calling other members Marxists with no repercussions raise some concerns. There is hardly a worse insult, apart from calling people Fascists. How far can we go?

 

[Gokul43201]

In fact, Defense Spending was not the primary reason for the big spending numbers in the Reagan years. His defense spending was lower than it had been all through the 50s and 60s.

 

[WhoWee]

It's one thing to say he gets a pass for the spending, and quite another thing to describe him as the pinnacle of fiscal conservatism.

Allow me to clarify my opinion. Jimmy Carter went on TV quite often (seemed daily) and whined about the economy and the need for defense spending to stay in the Cold War - and of course the Middle East and the hostage crisis in Iran.

Then, Reagan came along and softly cooed "Don't worry - I know what to do' - then he spent and spent and spent (as I recall California really benefited). Shortly after, interest rates dropped and the Stock Market took off (savings went into the market and bailed out the pension funds that were in worse shape than the S&L's - someone please challenge me on this).

If the Soviet Union didn't collapse and the spending couldn't be attributed to making that collapse happen - Reagan might be viewed in a different light.

On the other hand, I still smile every time I think about Reagan having that missle (or was it a fighter?) fly down the main road in Libya and bomb the palace.

 

[CAC1001]

It's one thing to say he gets a pass for the spending, and quite another thing to describe him as the pinnacle of fiscal conservatism.

Reagan saw the deficit blow up under him due to his tax cuts, his increased defense spending, and the Federal Reserve ending the inflation also blew up the deficit. None of this resulted in any permanent deficit increase however, and the deficit began shrinking during his Presidency due to the economic growth that occurred. Once the Soviet Union collapsed, the defense spending was scaled back. The defense spending also might have served as a form of Keynesian stimulus for the economy. In terms of conservatism, Reagan stopped a lot of the growth of the government.

 

[CAC1001]

Of course the Soviet Union imploded, but it had nothing to do with the deficit spending in the US. The SU had cancer - corruption and a decaying infrastructure. Reagan's administration wasted a lot of money. On the other hand, it made a few Americans very wealthy.

I wouldn't call recovering the economy and rebuilding the military wasting money.

 

[WhoWee]

While I think he spent too much, Reagan dealt with a great many complex problems and should be given credit accordingly. He tackled oil prices and inflation, yet cut personal income taxes.

Also, does anyone remember that Reagan attempted to fix Social Security? If I recall, he suggested an increase in FICA withholdings coupled with benefit cuts. If he'd been successful 25 (?) years ago - the system would probably be in a lot better shape today.

 

[CAC1001]

Reagan not only got a pass, he got a folk-following for "out-spending" Russia into bankruptcy. Not true. The Soviets were already on the decline and he just happened to be on-watch when the inevitable crash occurred.

Reagan did actually out-spend the Soviet Union into bankruptcy. Gorbachev, in his memoir, mentions this.

From what I have seen, the end of the Cold War is a little more complex than most try to make out. Folks on the Right love to say, "Reagan ended the Cold War," while folks on the Left love to say, "It just happened on his watch." The reality I think is a little of both. Reagan most definitely played a role in breaking the Soviet Union, but he wasn't the sole guy who brought it down (folks like Charlie Wilson for example had roles too).

One claim often made is that the Soviet Union was "in-decline, and was destined to collapse anyhow. But that implies that the Soviet economy had worked for awhile, but then eventually went into decline and collapsed. The reality is really the Soviet economy never worked from the start. It always was in a state of crisis. What Reagan understood, that many others did not, and what many even considered lunacy at the time, was that the Soviet Union was weak and sick, and if you pressured it, you could break it.

In 1984, the Harvard economist John Kenneth Galbraith said that, "for the first time in its history, the Soviet Union is able to pursue successfully a policy of guns and butter as well as growth...the Soviet citizen-worker, peasant, and professional---has become accustomed in the Brezhnev period to an uninterrupted upward trend in his well-being."

He then later that year claimed, "the Soviet system has made great material progress in recent years" and that "the Russian system succeeds because, in contrast with the Western idnustrial economies, it makes full use of its manpower."

Paul Samuelson, a Nobel Prize-winning economist who authored what was one of the most widely read economics textbooks, wrote: "What counts is results, and there can be no doubt that the Soviet planning system has been a powerful engine for economic growth...The Soviet model has surely demonstrated that a command economy is capable of mobilizing resources for rapid growth."

(the quotes are from Natan Sharansky's book The Case for Democracy: The Power of Freedom to Overcome Tyranny and Terror)

When the Soviet Union finally collapsed, the entire Western world was STUNNED at the level of economic decay within it. But at the time, Reagan's quest had seemed rather loony.

Reagan, knowing that the Soviet Union was not economically strong, knew to push it. His pushing it through defense was one area, also through the Strategic Defense Initiative, which ironically while derided and laughed at domestically, the Soviets took very seriously. He pointed missiles back at them when they put missiles into Eastern Europe, and his breaking the Air Traffic Controller's union also got the Soviet's attention. He also called them the "Evil Empire."

It was because of Reagan that the Soviets chose Gorbachev, who was not one of the historical hardliner types the Soviets had always had in the past, as the soviets realized the hardliner method wasn't going to work with Reagan. Gorbachev tried very hard to get Reagan to give up SDI, which Reagan wouldn't (not that SDI was even really an actual thing at the time), and Reagan also denied the Soviets access to crucial technologies they needed, and damaged their efforts for building an oil pipeline which would provide much-needed revenue.

Then there was also Afghanistan, which the Soviets wanted to pull out of, but they wanted to do so in a way that would make it look like they were victorious, but this required Reagan's aid, which he wouldn't give (this is part of the reason why the Soviets remained in Afghanistan, out of fear that pulling out and showing they lost would had been a major blow to the image of Soviet power throughout the world).

Also remember Reagan's support for the Solidarity movement in Eastern Europe, and his focus on sending radio from the free world into Eastern Europe so it could be heard.

We need to gain some perspective, and exercise a bit of honesty with respect to history. I don't see a lot of that in our media, and there's not that much of that perspective on this forum, either.

While Reagan certainly was not the only factor in ending the Soviet Union, he did play a major role.

Right-wing members calling other members Marxists with no repercussions raise some concerns. There is hardly a worse insult, apart from calling people Fascists. How far can we go?

Not calling you a Marxist anywhere here.

 

[CAC1001]

While I think he spent too much, Reagan dealt with a great many complex problems and should be given credit accordingly. He tackled oil prices and inflation, yet cut personal income taxes.

Yes, Reagan also (to some large criticism) ended the price controls on gasoline.

Reagan also gave support to the Federal Reserve as well, for which he took a hit politically. If the Fed raises interest rates, Congress usually cracks down on them pretty hard because it tanks the economy. Reagan's political support to the Fed is part of what allowed it to keep interest rates as high and as long as it did to kill the inflation.

Also, does anyone remember that Reagan attempted to fix Social Security? If I recall, he suggested an increase in FICA withholdings coupled with benefit cuts. If he'd been successful 25 (?) years ago - the system would probably be in a lot better shape today.

Didn't he raise the retirement age and also increase FICA taxes? I think this had bipartisan support, and was because SS was otherwise going to go into deficit.

 

[CAC1001]

The numbers show quite clearly, that it wasn't only the deficit that hit record values, but also spending.

As shown in my previous post. Defense spending wasn't particularly high - it was significantly lower than it had been during the 50s and 60s.

As a percentage of the economy yes, but it still was increased.

When he left office, the deficit was still about as high as it had ever been since the War. And it stayed at those levels all the way through the Bush Sr term.

It began shrinking around 1983, but then began increasing again around 1989; I would imagine maybe the 1987 Stock Market crash might have affected it.

http://www.usgovernmentspending.com...tack=1&size=m&title=&state=US&color=c&local=s

I repeat: defense spending does not even remotely account for the big spending numbers.

Is there a way to see how much of the budget was allocated for defense under Reagan? Also by being scaled back, I was referring to the massive draw-down in defense spending that occurred under George H.W. Bush.

From what I can tell, the primary (in the sense that they were historically high) recipients of the Reagan dollars were Pensions and Welfare.

If I am remembering right, the Congress also refused certain cuts Reagan wanted; they'd go along with his increases in defense, but would not make the welfare state cuts he wanted.

But you're right that he drastically cut spending on Education - he cut it in half.

That's probably where he was also going to cut the lunch program but ultimately decided not to (I am guessing it was part of education spending).

 

[Al68]

No, it's not. You do not know for instance, if for every false claim there are 99 that are deleted by mods. You do not know when those making false claims get infracted for them.

Well, you're right, of course. "Free pass" was just hyperbole, anyway.

 

[Al68]

Right-wing members calling other members Marxists with no repercussions raise some concerns. There is hardly a worse insult, apart from calling people Fascists. How far can we go?

What are you talking about? First, how is the word "Marxist" an insult, even if it was used to refer to a member personally instead of the contents of their post? Many who share the worldview of Democrats are honest and knowledgeable about it and use the word "Marxist" to describe themselves, especially worldwide. I doubt they would appreciate you referring to the word "Marxist" as an insult.

And why would you object, anyway? You have advocated Social Security, and called it socialist, and Marx is generally recognized as the father of socialism. Then you object to the label of "Marxist"? Why would you even object at all, much less call it an insult?

And referring to economic libertarianism as "servitude to the wealthy" isn't a hateful personal insult?

Labeling an ideology I disagree with is an "insult" while hateful attacks on someone's motives isn't? Seriously?

And I'll ask again for the millionth time on this forum: What word or words would accurately describe the economic worldview/ideology of Democrats but won't be objected to? If you have a semantical objection to the word "Marxist" itself, simply provide an appropriate alternative that you don't find objectionable and I'll use it instead.

 

[WhoWee]

And I'll ask again for the millionth time on this forum: What word or words would accurately describe the economic worldview/ideology of Democrats but won't be objected to? If you have a semantical objection to the word "Marxist" itself, simply provide an appropriate alternative that you don't find objectionable and I'll use it instead.

How about "Taxenspendems"

 

[Al68]

What Reagan understood, that many others did not, and what many even considered lunacy at the time, was that the Soviet Union was weak and sick, and if you pressured it, you could break it.

The most interesting thing about Reagan's "lunacy" is that after its collapse, the entire world found out that the Soviet Union was far weaker and sicker the whole time than even Reagan suspected.

 

[Al68]

How about "Taxenspendems"

That's a good description of their specific agenda maybe, but not their underlying worldview/ideology.

 

[mheslep]

Some perspective on the subject.

http://nymag.com/news/intelligencer/topic/69931/
ONE MILLIONAIRE’S TAX BILL
Year: 2000
Income: $406,000
Taxes paid: $40,376 (<10%)

Year: 2009
Income: $398,000
Taxes paid: $18,818 (<5%)
(Money earned through investments is often taxed at a lower rate than wages.)

Amusing. The guy listed there (Nusbaum) is one of those who signed the letter pleading to let the tax rates expire, or increase.

I pay about the same as the 2009 taxes, but I earn quite a bit less than $400K. I don't imagine he works harder than me.

Maybe so, maybe he slacked his way into that income. Perhaps you work seven days a week at a grueling job, starved though school to obtain advanced degrees, and have diligently learned four foreign languages; I would not know. Perhaps you've taken great economic risks, failing multiple times before succeeding to get where you are now, I would not know. How do you imagine you know about the life situation of the guy above?

 

[WhoWee]

The most interesting thing about Reagan's "lunacy" is that after its collapse, the entire world found out that the Soviet Union was far weaker and sicker the whole time than even Reagan suspected.

I believe it was fortunate that Gorby rather than a hard liner was installed AND that collapse happened quickly - a long and drawn out collapse - basically a desperate situation with a hardliner at the controls could have lead to a chilling scenario.

 

[mheslep]

But you're right that he drastically cut spending on Education - he cut it in half.

That's of course Federal education spending, which in my view should be near small, allowing some standard setting and that's about it, leaving the rest to the states.

 

[mheslep]

The reality is really the Soviet economy never worked from the start. It always was in a state of crisis. What Reagan understood, that many others did not, and what many even considered lunacy at the time, was that the Soviet Union was weak and sick, and if you pressured it, you could break it.

That's exactly right.

Commentary editor Norman Podoretz wrote an article in 1984 expressing concerns that Reagan would also fail to have what it took to actually stand up and roll back communism. After all there was an entire chorus of voices (many of whom CAC quoted) saying the Soviets were not so bad, that Reagan was crazy do anything else but live with Soviet domination. http://query.nytimes.com/gst/fullpage.html?res=9A07E7D71330F930A25755C0A9629C8B63" :

After I wrote that article, he called me and spent half an hour on the phone assuring me he was serious about the Soviets. What he basically said was: Trust me, they're in more economic trouble than people realize, and I'm going to put the squeeze on them. Which he did, and he turned out to be right.

Ronald Reagan, with the help the UK's Margaret Thatcher won the cold war. Not happened to be there when the SU fell apart, they won it. All US Presidents before Reagan and including '92 Bush afterwards were fine with merely containing the Soviets. Gerald Ford, for example, another détente devotee, pathetically remained convinced a decade after the fall of the Berlin wall that he deserved much credit for the proper course of action with the Soviets. During more detente under Carter, then http://www.hoover.org/publications/hoover-digest/article/7398"

In January 1977, I visited Ronald Reagan in Los Angeles. During our four-hour conversation, he said many memorable things, but none more significant than this. "My idea of American policy toward the Soviet Union is simple, and some would say simplistic," he said. "It is this: We win and they lose. What do you think of that?" One had never heard such words from the lips of a major political figure; until then, we had thought only in terms of managing the relationship with the Soviet Union

.

 

[Al68]

ONE MILLIONAIRE’S TAX BILL
Year: 2000
Income: $406,000
Taxes paid: $40,376 (<10%)

Year: 2009
Income: $398,000
Taxes paid: $18,818 (<5%)
(Money earned through investments is often taxed at a lower rate than wages.)

I pay about the same as the 2009 taxes, but I earn quite a bit less than $400K.

Am I missing something here? It seems obvious that the reason for that millionaire's low tax bill is tax deductions/loopholes and has very little to nothing to do with the top marginal rate. Clearly his effective tax rate is low because he was able to use deductions/loopholes so that at least most of his income was not subject to the top marginal rate, so raising the top marginal rate would make little or no difference to his taxes.

And it seems obvious why that same millionaire might favor raising the marginal rate instead of closing loopholes: so that the millionaires that actually pay their "fair share" would have their taxes raised instead of his.

 

[Gokul43201]

I think constant dollars, not % GDP, was the way to go on this topic.

I don't think that's particularly useful as a historical comparison, since the total spending in chained dollars is essentially a monotonically increasing function since the beginning of time. But if that's what you want to go with, Reagan's total spending exceeds even that during WWII. Not quite the signature of a model fiscal conservative.

 

[Gokul43201]

What word or words would accurately describe the economic worldview/ideology of Democrats but won't be objected to?

Here's a suggestion - I don't know if its non-objectionable, or even terrible descriptive, but I think it's appropriate - neo-liberalism (to contrast it with classical liberalism).

 

[WhoWee]

Here's a suggestion - I don't know if its non-objectionable, or even terrible descriptive, but I think it's appropriate - neo-liberalism (to contrast it with classical liberalism).

How about Globotaxnsperndemlibs - or "Glotslibs"?

 

[skeptic2]

Is this one of the reasons we got into this mess?

http://www.ontheissues.org/2004/Dick_Cheney_Budget_+_Economy.htm

Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.

O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.

O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.

The vice president's office had no immediate comment, but John Snow, who replaced O'Neill, insisted that deficits "do matter" to the administration.

 

[OmCheeto]

How about Globotaxnsperndemlibs - or "Glotslibs"?

Given the myriad of graphs I generated to contradict your statement, I'd think "Notabunchofliars" would be more appropriate to describe the Dems.

 

[WhoWee]

Given the myriad of graphs I generated to contradict your statement, I'd think "Notabunchofliars" would be more appropriate to describe the Dems.

Are you saying that Dems don't like to tax and spend?

 

[Gokul43201]

Are you saying that Dems don't like to tax and spend?

Care to estimate how much MORE taxes we have been paying compared to 2, 3, or 4 years ago, as a result of legislation passed by the tax-loving Dems? By my count, somewhere over $300 billion worth of NET tax cuts have been passed in the last couple of years, but obviously that must be wrong, since Dems only raise taxes, not cut them.