The rich are getting richer, and giving them tax cuts didn’t help the economy, but it is the only thing the Republicans insist on — more tax cuts for the rich. And investors already pay less in taxes on their earnings that people who work do. Not to mention that payroll taxes are capped for the rich.
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21 Comments
The dems aren’t without blame. They could have tried to pass the middle class only taxes before the mid terms but chickened out. And now they have the nerve to criticize BHO for being submissive especially when the economy is on the brink again and urgent action is needed.
The decision by the Democratic leaders in Congress to put off the tax vote until AFTER the election was either the stupidest or smartest move they could make. It could be either, I believe, and here’s why:
If it was stupid, it was because they lost a golden opportunity to make the Republicans show that they were willing to screw over middle class families rather than let the taxes on the wealthiest 1% go up. And they lost a significant amount of leverage because they had to make this deal in the context of the Republicans taking over the House in January.
But it also might have been very smart. The Republicans already had the same votes in the Senate that they do now. They could still have blocked all votes unless they got what they wanted. They also had plenty of polls going back to at least May 2010 that they were likely to win the House in the mid terms.
That combination would likely have meant that the early confrontation would have been stymied until after the election anyway. Since the Republicans would still have almost certainly ended up with big wins they would have seen that as vindication that their position was right (because they still won despite holding the middle class cuts hostage) and been unlikely to cut a deal of any kind.
By deferring the decision until after the election, and therefore forcing the debate at the same time as unemployment benefits were running out and the end of the original “stimulus” tax cuts was looming, and by being able to tie tax cuts for the rich to the same position that denied money to the unemployed and the middle class, the Dems may have actually gotten the best leverage point of the cycle.
I hate politics, but I try to understand it and I think in hindsight the decision to delay the vote was probably the best choice under the circumstances.
Jason ray, what the dems did comes at the expense of BHO’s reputation. It paints him as weak minded and already several progressives have come out against him. The “strategy” cartoon on this website is an example. The end result is that voters who think they need a president who thinks with his balls than his brains may choose a republican and maybe even mama grizzlie herself.
You guys got it! How quickly ones political fortunes change if you don’t do exactly as they ask. The irony should not be lost comparing the post last Friday “Ransom Note” showing Repubs holding America hostage for tax cuts and now the Presidents own party wanting to hold America hostage against tax cuts.
By being too rigid in their demands both sides have kissed the pooch. The repubs already caved on not adding to the deficit (the dems are now championing deficit saving) and the dems caved on the wealthy tax cuts all for hopeful political gains on their way out of power. As I’ve said before, if the dems had made a serious proposal (perm cuts for mid/low, 2-3 yr ext for 250-999k, and 1 yr ext for million plus) they could have won AND get to debate JUST the wealthy tax issue 1 yr before the next election, while taking credit for permanently extending mid/lower tax cuts.
To add a contrarian viewpoint to the discussion here is a link to a tax attorney who states “The Richest 10% Pay 71% of Federal Income Taxes”. He could be correct I don’t know.
http://blog.pappastax.com/index.php/2010/09/05/the-richest-10-pay-71-of-federal-income-taxes/
When I also hear about the death tax possibly reaching 55% for wealthy and 35% for kinda wealthy it makes me wonder. So will Buffet and Gates give a combined 50 billion to the fed this year? That would still leave about 50 billion between the 2. If they both died this year and the death tax was in place the gov could take another 25 billion from their children, who if they died the following year the gov could take another 12 billion or so. Now thats wealth redistribution! I also know that wealthy Americans can write a check to the treasury dept to pay down the debt, they don’t have to wait for congress to change any law. I wonder how many checks Soros, Buffet and Gates have written to the treasury aside from their normal tax rates.
Patriot, 2 questions:
1. What percentage of total income does that 10% take in?
2. What is an acceptable percentage of income tax for the top 10% to pay?
Thanks.
Patriot, the repubs did not “already cave on not adding to the deficit”, they lied about it as a talking point to get elected. They have proven all decade long that they couldn’t care less about adding to the deficit.
1032 –
This is the number quoted in the article, but I have not verified it.
■The top-earning 10 percent of taxpayers reported 48 percent of all AGI and paid 71.2 percent of total income taxes.
What is a fair tax rate for the wealthy? IMHO it needs to be progressive like all tax rates and should top out (maybe for those earning 1 mill per year) at 40%, but sliding down to the 250k mark should only be 36%. We need to remember they also pay the maximum SS & medicare tax, state tax, local tax and big property taxes. That brings them into the 50+% range of their income. Those that want to contribute more (buffets, gates, soros’, etc) can write a check and send it in.
I think asking any American for 50% of their treasure (not to mention when they die another 55% of that already taxed money taken from their hiers). I think if a goverment wants lesser income earners pay no tax it’s un-american to ask others (equal citizens 1 vote) to pay for themselves plus a whole bunch of others. In my own mind we need to reduce the size of government before we ask anyine for more money.
TJ – on the facts you are absolutely correct, but this is the old crew still in there. Some will be leaving replaced by fresh faces and congress will be completely different. I believe we’ll see a change back to their core values (at least I hope)like during the Clinton years when they had the majority and eliminated deficit spending, paid off some national debt and reduced Gov spending.
I didn’t ask for a fair tax rate, I asked what’s a fair percentage of total income tax. Because they pull in 50% of the income, if we had a flat tax rate system with no loopholes, they’d be paying 50% of income taxes. This would cause the lower tax brackets to be taxed even more. And we are only 21 percentage points away from the horrendous 71% of total income tax.
I pulled data from http://www.taxfoundation.org/news/show/250.html regarding earned income from 1987 to 2007. You can do the same. Divide the earned income in 2007 by the earned income in 1987, round to 2 decimal places and multiply by 100. This will give you the percentage that earned income has increased for each class. Look at what happens when you add in lower and lower brackets:
Top 1% – 579% increase from 1987 to 2007
Top 5% – 456%
Top 10% – 407%
Top 25% – 354%
Top 50% – 325%
Bottom 50% – 245%
So, you tell me. Are we hostile to the rich? Is this fair? Someone is definitely getting boned, and despite what Fox News would have you believe it is absolutely not the wealthy.
Ok, I can not understand what is going on. It seems 98 or 99 senators agree that middle class tax should be permanent. Why then they do not pass it?
1032 – I hear you. I agree if you’re trying to say the tax code should be re-written. If we went to a flat tax (no deductions)on a sliding scale we could eliminate most of the IRS for one, and collect more tax revenue from all( at a fair rate).
My suggestion would be 1% for every 10,000 in income up to 500k. If we needed to because we refused to shrink government, someone could then run on the mantra of increasing rates incrementally above 500k, but no one should pay any more then 55% of their earnings in taxes. They other method would be to eliminate the IRS completely, eliminate all income tax, (except SS, Medicare, Healthcare)and go to a national sales tax. This method would collect the most tax, because even those who work “under the table” or are drug dealers for instance, would be paying consumer taxes at the register.
Hassan – IMO they are using the extension of middle class tax rates as a bargaining chip.
I’m not saying the tax code should be rewritten. I said, with a flat rate tax with no loopholes, the top 10% who earn 50% of the income would pay 50% of the tax rates. You’ve said that 71% is too high. Is 50% OK?
If 50% is OK, then that burden shifts down the ladder. The pie has to be filled, and if the top 10% aren’t filling it, then the bottom 90% will be. The further down the ladder we go, the further into money used to survive we get. An extra 10% to the top 1% is less money socked away in Swiss bank accounts. An extra 10% to the bottom 50% means less food for families.
I’m pretty sure I found this link on this website, but if not or you haven’t read it please read it: http://www.truth-out.org/roll-back-reagan-tax-cuts65332 It addresses several of the tax cut myths.
It is my opinion that the IRS will never go away. This seems like an irrational pipe dream of flat and fair taxers. Who would enforce the tax code? Why would anyone pay any taxes? What is good about the IRS going away or almost all going away? Is it a good thing to put all those people out of jobs?
Another thing that is absolutely mind boggling to me is the kvetching about the estate tax.
According to…well, just about every Republican I’ve ever talked to, entitlements are bad. Giving things to people without them having to work and earn it makes them lazy. It produces leeches who feed off the effort of others while lazing about on their own.
HOWEVER, apparently when you give millions of dollars to your children, it magically makes them phenomenal business-people!
I don’t understand how giving someone money from the government that they didn’t earn is terrible and evil, but giving a child money from their parents that they didn’t earn is great. You’d think the Republicans would be advocating a 100% estate tax to produce hard working children.
1032- your tax points in #11 are definately worth further discussion. I, unlike apparantly many of our elected politicians, am willing to discuss for understanding and consideration all viewpoints.
On the estate tax,I have a simple (but not short)rebuttal. The difference between parents and the government is that. When it is received from the government it is paid for by someone else. When received from family, it is exactly how it should be. Second point, modest middle income earners who diligently save and sacrifice all their lives to foremost, not be a burden to their children in old age, and second perhaps give them a boost when they pass. Many middle class persons through this process accumulate 1, 2 and maybe 3 million dollars because of their frugality. Why should the government be “entitled” to any of that money. Can’t they run their budget like the deceased? The answer is no, they spend beyond their means and write a check that those behind them must pay for. They (the government) needs to practice the same frugality as the people they champion and admire, or is all just lip service.
The difference between parents and government is that when it is received from parents, it is paid for by someone else. When received from the government, it is exactly how it should be.
My point isn’t about the government needing money. My point is about the estate tax being considered wrong because it doesn’t allow parents to give their children money that the children didn’t earn, and welfare being considered wrong because it does allow the government to give citizens money that the citizens didn’t earn.
If the rebuttal to both was solely based around “it’s my money and I’ll do what I want with it”, that would be at least logically consistent. I.e. the government can’t have my money for estate taxes or welfare because it is my money. But what I hear constantly from the right wing echo chamber is that entitlements create lazy people. As long as we keep giving people welfare, or even unemployment, they will have no motivation to pull themselves up by their own bootstraps and be productive citizens. This is not logically consistent with the estate tax argument. If it is bad to give welfare recipients money they didn’t earn, then it is bad to give your children money they didn’t earn.
1032 – I think we’ll just have to agee to disagree on the estate tax issue. I believe parents or any deceased person can leave something to their heirs or any other organization. Indeed many “millionaires” leave all or a portion of their fortune to their favorite charity.
On the welfare issue, I was taught by loyal democratic parents (and I believe) that government should be there to provide a safety net, or helping hand up to someone in need or down on their luck. What my parents also taught me was family should help first, then friends, and lastly askig for government help. They believed this is the things ought to be. I’ve helped neighbors and given a person a room in my house along with food from my table when they need it. They would do the same for me. I’ve helped many a tenant in the rental properties I own when the are down on their luck, by adjusting rent, rescheduling payments, or telling them if its too much on them I’d break the lease. We give to local charities, teach our children that community service is important and to help a neighbor. I donate my time to community organizations like Boy Scouts, little league, and teaching youngsters about a variety of subjects. I’m not a nazi or facist when I say people should be asked to pull their own weight. I think everyone should pay at least $10 in fed tax, everyone. This country and the democratic party I grew up with did’nt teach us to be dependant on Gov, they taught us to rely on ourselves first, then our families, communities and lastly our goverment. My father who past away after a long illness wasn’t able to leave anything behind, it all went to the care for his declining health, but if he did it shouldn’t be taxed, since it was already tax once. My father taught me that you face lifes problems and overcome. He was a paraplegic the last ten years of his life and he refused t park in a handicap spot. He’s say theres someone worse off then me who might need that spot. Nowadays I see them, pulling into a spot, hanging the handicap sign and walking into a store. Their not handicapped, they’re just lazy. When I see it, I voice my displeasure but wish i had a ticket book. I do believe that 99 weeks of unemployment is the limit. If you havn’t found work or started your own business then your’re not trying hard enough. Thats my opinion, based on my values and core beliefs and yes I am a democrat.
The idea of money not being “double taxed” isn’t really consistent with the US tax code.
Basically, it boils down to the government wants a cut from every transaction, big or small. Obviously there are exceptions, but pretty much there’s a tax in place for any time money (or goods or services) changes hands.
patriotsgt: your father is to be commended and honored. And everything you describe is “wealth distribution.” You help people in your rentals. I have a 16 year old who is helping me. His mother is on disability. I’m able to practice “wealth redistribution.”
What I was going to say last night before the kitten pushed the delete button is that Buffet (and probably Bill Gates) have set their children up before their death. Buffet by handing over Berkshire Hathaway shares to his offspring who are in turn using “redistributing the wealth” as they see fit for the good of the nation. Buffett enjoyed the thrill of earning money, not spending it.
Buffett gave much money to his wife who lived in S.F. and used it for helping aids victims and research, etc. He has let others do the philanthropy for him.
Comes down to the ik’s greedies and the fairies. The wealthy fall equally into both categories and always have. Schaife helps the “Heritage Foundation” and Rove’s projects while his sister and his cousin helped the less fortunate. Larry Mellon took his huge wealth and helped the Haitians by building and continuing the Albert Schweitzer Hospital in Haiti.
There are others who are convinced that they can “take it with them.” and help no one. I don’t hear Limbaugh helping the less fortunate. Add Beck and Rove to that category.
And now the Republicans have blocked eliminating the tax breaks to the rich and after ten years they are going to start job creation, ho, ho.
Somewhere it is not mentioned that Bush spent 2 BILLION a week to play war games in Iraq. Republicans feel no need to repay any of that. They leave it to our grandchildren to right this.
Bush also lost the Harvard endowment fund in his useless oil wells. He likes to take other’s money.
Ebdoug – there is truth to what you say. There are alot of wealthy who give great sums of money to help others, they are from all political parties. In the current bill repubs accepted a 35% death tax as compromise. 1/3 of a mans treasure when he dies should be enough. If they need more its because of their out of control spending.
Take this current tax bill. With earmarks added it is up to 900 bill (all deficit – none paid for)in cost and there is no cost added for keeping the current tax rates. Reid has added everything from internet gambling (because “rich” casinos were some of his biggest donors) to NASCAR $’s. Mcconnell is going along with it, maybe adding to it. The lameduckers are going to stuff this thing with everything they can think of to satisfy there donors and Obama will sign it because he’s never met a spending bill he doesn’t like.
If washington becomes fiscally responsible more people would be willing to sacrifice, but when the message is you need to suffer so we can pay back our donors. I say lets defund them and take back all our taxes.
I read a book “The Millionaire Next Door” a long time ago that made a convincing argument (backed up by real numbers) that leaving a huge inheritance to your children was one of the worst things you could do to them. So I totally agree with 1032 on his point that giving money to your children makes them lazy.
And PatriotSgt, under the new rules, the first $5 million is exempt from inheritance tax. Does anyone’s children need more than that to start a good life or would more just make them even lazier?
UPDATE: Apparently that book has been reissued.
Agreed on the inheritance, but is that current law or the proposed law? But, I still disagree on leaving something for your children. Perhaps it’s true for the uber wealthy like the Paris Hiltons of the world, but for the middle class it’s not unheard of to amass a fortune of 2-3 million. If there are several benefactors to split it among it’s only a modest inheritance and taking 35% should be sufficient. I’m glad you all are concerned about not making rich folks lazy, but thats a really weak argument. What about unemployent recipients collecting Gov checks for 3 years while not working, I’m guessing that does’nt make some of those folks lazy. Hmmmm, seems like a hypocrisy somewhere.
I don’t think this bill will get passed. The Dems are stuffing it full of pork so the reps won’t vote for it or the dems will be able to give their donors a bonus. If it makes it out of the senate, just see what the house dems stuff in it for their last hurrah. I bet it climbs over 1 trillion before its done.
I just love a guy who makes all these excuses, saying it’s okay for the rich to be lazy, but give a working stiff a break, they start acting like the idle rich, also. If you actually grew up as a working class Democrat you KNOW that’s not true. And there you go, Patriot, once again excusing the hypocrisy of the upper class. I suspect either you are not truthfully representing yourself or you are in extreme denial of reality. Possible both. The economy’s clock now says 11:30 PM. Soon, I predict, the decision by the oligachs of money to do what is morally right (help their fellow humans) is going to be completely out of their hands, no matter what YOU think has caused the current economic impasse! Get it?