Now that Republicans have won in November*

If the Bush tax cuts expired I would lose from $300 to $400 a month in take home pay. Largely because we have 4 children ($2,000 tax increase right there).

If you have four kids under 17, you're getting $4000 a year in tax cuts. This will drop to $2000 in 2011 (thanks to the Republicans, who sunsetted this in the first place, don't forget). $2000 a year is $167 a month, so that's what you'd lose.

If the republicans when, Glenn Beck will say that the country is falling into a communist state because we bothered with an election.

Robear wrote:
But if we did that then taxes for the working class goes up. Terrible idea.

Back to what it was what, less than 10 years ago? That's terrible? Is there ever a reason to *raise* taxes? Some argue that we should have done that going into the war in Iraq.

Or we could reverse the tax cuts on the rich of the last 30 years, take that back up to 60% and ease the take from the middle class and poor. IE, buy into progressive taxation again.

The doctrine of "lower taxes are always better" seems to me to be foolish.

Raising taxes on the middle and lower classes is foolish, not from just a "fairness" standpoint but also from an economic one.

There is no economic reason to raise taxes during a war when there is no inflation. Taxes regulate inflation. It is not for revenue. In fact during the civil war the Union and Confederates both issued legal tender notes to help finance the war effort. They did not raise taxes. That would have killed the economy of their time.

WWII is the same thing. Issuing war bonds put money back into circulation. And the net effect was HUGE deficits. Huge enough to get us out of the Depression.

Robear wrote:
If the Bush tax cuts expired I would lose from $300 to $400 a month in take home pay. Largely because we have 4 children ($2,000 tax increase right there).

If you have four kids under 17, you're getting $4000 a year in tax cuts. This will drop to $2000 in 2011 (thanks to the Republicans, who sunsetted this in the first place, don't forget). $2000 a year is $167 a month, so that's what you'd lose.

Democrats have a chance to make this permanent. They better do it. By not doing this and fixing marriage penalty tax before 2000, is the reason Gore lost to Bush in the first place. (I know about the popular vote and Florida thing)

Sure in comparison to the supply side cuts it was measly, but it was needed cuts nonetheless.

It's interesting that you mention World War 2 war bonds. As it turns out the issuing of them was not necessary for the war effort as the government has plenty of liquidity already. What the bonds did was remove liquidity from the general public by convincing them it was their patriotic duty to tie up their capital building bombs. Why this was important was that it kept down inflation by taking civilian capital out of their hands (until after the war).

Paleocon wrote:

It's interesting that you mention World War 2 war bonds. As it turns out the issuing of them was not necessary for the war effort as the government has plenty of liquidity already. What the bonds did was remove liquidity from the general public by convincing them it was their patriotic duty to tie up their capital building bombs. Why this was important was that it kept down inflation by taking civilian capital out of their hands (until after the war).

You are correct. Issuing bonds was not needed to finance the war effort. It was just needed for propaganda purposes. They did not take money out of the system either that the government didn't put in there. Since government spending in the war effort was done first. Bonds were issued after government spent on the war effort. Yes the effect was lowering inflation during the war.

What I am saying is that the government spending caused the savings in war bonds. Not the other way around.

The Republican members of the Senate decide to again make sure everyone knows who they work for:

WASHINGTON – Senate Republicans will oppose any effort to renew soon-to-expire Bush administration tax cuts if upper income taxpayers are excluded from the reductions. A spokesman for Senate GOP Leader Mitch McConnell said Monday that every Senate Republican has pledged to oppose President Barack Obama's tax-cutting plan. Obama would renew the tax cuts for most people, but let the top income tax rate rise back to almost 40 percent on family or small business income over $250,000.

I suppose I can handle a rise in my taxes to fund the government, but Obama is going to be talking about this from now to election day.

Funkenpants wrote:

Agreed. I hear the complaint every day on CNBC that raising taxes on the wealthy will result in lower growth. But it's one of those arguments that seems to me to be disingenuous in a time of nearly frictionless international capital flows. If the economy here is tepid or anemic, and the one in Asia is considered growing, where will the wealthy deploy their capital in search of return? Hedge funds and banks tend to be short term oriented. They aren't going to invest in the U.S. when the outlook for this country calls for anemic growth for another year or two during a slow recovery.

I hate to promote CNBC, but they're not wrong in this case - taxing the "rich" will inhibit growth. I put "rich" in quotes because when most people think of rich, they think of George Soros or the Koch brothers. Those people are extreme outliers - in reality, the people you're raising taxes on are the ones who run small restaurant chains, successful tech S corporations, and other small to medium size businesses that provide the vast majority of American jobs. What constitutes their "fair share" of taxes? Well lets see:

Note the brackets that OG_slinger and Goman bring up - $250,000, $375,000. That's precisely the kind of income a small S corporation sees, and it appears to be personal income because that's how S corporations work - they operate in your own bank account. For example, my little company employs six people, with two others on contract (and that's with hiring two people this year). My employers appear to be "rich" due to their "incomes", but they're just middle-class people like everyone else, and the vast majority of the money that comes in also goes out. These people already pay far more than their "fair share" in taxes. The top 1% of income earners paid nearly 37% of all income taxes in 2006 according to the IRS, and the top 5% paid 57% of all income taxes. (Yes, income taxes aren't everything; however payroll taxes and sales taxes are pretty evenly applied, and capital gains taxes apply only to the "rich".) The "rich" you're trying to make pay their "fair share" are in fact your neighbors and employers. These tax hikes will apply directly to them - the very people you want to be spending that money on hiring new employees!

Also, the idea that you can raise taxes on people like George Soros or the Koch brothers is ridiculous. Their wealth is almost entirely sunk into assets - they don't really have incomes, at least not as most people know it. They are also highly mobile due to their wealth, so if you piss them off, they'll simply take all their money and investments elsewhere. (If you don't think this can happen, review the history of the current Zimbabwe crisis).

To spur growth, there's two realistically achievable things that need to happen to get the ball rolling: the government needs to drastically cut spending, and we need to withdraw the support for the housing market and let it correct. Unfortunately, neither the Republicans nor the Democrats are interested in either of those things, so even if the Republicans win in November, what we'll see is a continuation of current policy: overspending and a prolonged recession.

Good thoughts, most of which I don't agree with (I happen to agree on housing). But I understand the libertarian perspective.

Aetius wrote:

I hate to promote CNBC, but they're not wrong in this case - taxing the "rich" will inhibit growth. I put "rich" in quotes because when most people think of rich, they think of George Soros or the Koch brothers. Those people are extreme outliers - in reality, the people you're raising taxes on are the ones who run small restaurant chains, successful S technology corporations, and other small to medium size businesses that provide the vast majority of American jobs. What constitutes their "fair share" of taxes? Well lets see:

Note the brackets that OG_slinger and Goman bring up - $250,000, $375,000. That's precisely the kind of income a small S corporation sees, and it appears to be personal income because that's how S corporations work - they operate in your own bank account. For example, my little company employs six people, with two others on contract (and that's with hiring two people this year). My employers appear to be "rich" due to their "incomes", but they're just middle-class people like everyone else, and the vast majority of the money that comes in also goes out. These people already pay far more than their "fair share" in taxes. The top 1% of income earners paid nearly 37% of all income taxes in 2006 according to the IRS, and the top 5% paid 57% of all income taxes. (Yes, income taxes aren't everything; however payroll taxes and sales taxes are pretty evenly applied, and capital gains taxes apply only to the "rich".) The "rich" you're trying to make pay their "fair share" are in fact your neighbors and employers. These tax hikes will apply directly to them - the very people you want to be spending that money on hiring new employees!

Also, the idea that you can raise taxes on people like George Soros or the Koch brothers is ridiculous. Their wealth is almost entirely sunk into assets - they don't really have incomes, at least not as most people know it. They are also highly mobile due to their wealth, so if you piss them off, they'll simply take all their money and investments elsewhere. (If you don't think this can happen, review the history of the current Zimbabwe crisis).

To spur growth, there's two realistically achievable things that need to happen to get the ball rolling: the government needs to drastically cut spending, and we need to withdraw the support for the housing market and let it correct. Unfortunately, neither the Republicans nor the Democrats are interested in either of those things, so even if the Republicans win in November, what we'll see is a continuation of current policy: overspending and a prolonged recession.

There were about 4.5 million S corporation tax returns filed in 2009. Letting the Bush cuts expire will only affect 750,000 of those filers (a mere 3% of all taxpayers) and the net result is that their taxes will go up 39.6% from 36%, hardly a crippling blow.

Joint Commission on Taxation wrote:

The staff of the Joint Committee on Taxation estimates that in 2011 just under 750,000 taxpayers with net positive business income (3 percent of all taxpayers with net positive business income) will have marginal rates of 36 or 39.6 percent under the President’s proposal, and that 50 percent of the approximately $1 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent.

Some argue that an increase in the top two tax rates may lead to a greater disincentive to take entrepreneurial risks as the government will take a larger share of any marginal gains from successful ventures. On the other hand, proponents of the proposal observe that, despite these negative consequences, it is appropriate to allow the rates to rise for relatively few upper income taxpayers on account of pressing needs for Federal revenues, deficit reduction and distributional concerns.

Adjusting the top tax bracket or adding brackets for the likes of Soros and the Koch brothers would add clarity to the tax system and not allow the stinking rich to hide behind a handful of small business owners.

So the top 1% who control 80% of the total wealth pay 37% of the total taxes. Sounds like a good deal.

OG - You are conflating S corporations with all taxpayers. It is not 3% of S corporations that will be hit by raising taxes on them but 17% of S corporations.

That is a significant amount. And will be bad for our economy.

Aetius wrote:

Note the brackets that OG_slinger and Goman bring up - $250,000, $375,000. That's precisely the kind of income a small S corporation sees, and it appears to be personal income because that's how S corporations work - they operate in your own bank account. For example, my little company employs six people, with two others on contract (and that's with hiring two people this year). My employers appear to be "rich" due to their "incomes", but they're just middle-class people like everyone else, and the vast majority of the money that comes in also goes out.

Wait, if the money goes out in an S-corp, it's not taxed, is it? An S-corp isn't taxed on income (i.e. revenue, I guess), it's taxed on the profits, isn't it?

S-corps are pass-through tax entities I thought, where the profits aren't taxed at the corporation level, they're allowed to 'pass through' to the owner(s) who then treats the money as income.

Also, the idea that you can raise taxes on people like George Soros or the Koch brothers is ridiculous. Their wealth is almost entirely sunk into assets - they don't really have incomes, at least not as most people know it.

This is true--the rich don't have a 'job' that 'pays' them lots of money. They own 'assets' that pay off as 'investments'. Maybe they've defined their job in a way that makes it look like they're not working, they're investing, but yeah: something to keep in mind is that you're not going to capture the money the rich make by raising income tax rates.

Aetius - I brought up 250,000 because that is what is proposed now. I think it should be raised. Perhaps that is a compromise that Republicans can agree upon. Not sure if this thought is out there though.

If the Republicans win, we get 18 months of "Repeal Obamacare!" while Michelle Bachmann tries to get every member of the Obama administration tried for treason/tries to force the president to ascertain his Muslim/Not-a-Muslim status/BIRTH CERTIFICATE.

I do hope everyone's got their hard hats, because it's going to be a unbelievably frustrating fun ride.

Edit: Are there any good links on how taxing Small Business works?

OG_slinger wrote:

There were about 4.5 million S corporation tax returns filed in 2009. Letting the Bush cuts expire will only affect 750,000 of those filers (a mere 3% of all taxpayers) and the net result is that their taxes will go up 39.6% from 36%, hardly a crippling blow.

No, not a crippling blow. On the other hand, do you think it's likely to help? Do you think a small business facing an uncertain but increasing tax burden is going to go out and hire another worker?

Kehama wrote:

So the top 1% who control 80% of the total wealth pay 37% of the total taxes. Sounds like a good deal.

Not at all. As Wikipedia helpfully points out:

http://en.wikipedia.org/wiki/U.S._ta...

If the federal taxation rate is compared with the wealth distribution rate, the net wealth (not only income but also including real estate, cars, house, stocks, etc) distribution of the United States does almost coincide with the share of income tax - the top 1% pay 36.9% of federal tax (wealth 32.7%), the top 5% pay 57.1% (wealth 57.2%), top 10% pay 68% (wealth 69.8%), and the bottom 50% pay 3.3% (wealth 2.8%).[11]

In other words, the top 1% are already paying more than their "fair share", even when most wealth is taken into account. The top 1%, who control 33% of the wealth, pay 37% of the taxes. And again for emphasis, at this level the wealth we're talking about is not money or income: the vast majority of it is sunk into capital assets: the land, buildings, machines, computers, stocks, and other things necessary to run our modern economy.

CheezePavilion wrote:

Wait, if the money goes out in an S-corp, it's not taxed, is it? An S-corp isn't taxed on income (i.e. revenue, I guess), it's taxed on the profits, isn't it?

Well, it's complicated, as you might expect, and varies state to state. Typically, the individual is taxed on the salary paid to them by the S corporation, and the profits are taxed or the losses are used as tax writeoffs for the owner(s). And note that there are many other options besides S corporations that have to deal with things differently; I chose the S corporation because I'm the most familiar with that type.

As an example of the kinds of things small business owners are looking at, consider this story. The story is about using an S Corporation to save on taxes, but look at the sample amounts that are being paid by the C Corporation and the differences if the Bush tax cuts expire: $140,000 in one case, or enough to hire one or two new workers.

Aetius wrote:

In other words, the top 1% are already paying more than their "fair share", even when most wealth is taken into account. The top 1%, who control 33% of the wealth, pay 37% of the taxes.

What if you remove even just the cost of necessities like food and shelter? They might be paying 4% more than their 'equal share' but I think a "fair share" is about more than just straight percentages. If we're both paying the same percentage of our income, but more of your income goes to necessities than mine, why is it fair I pay the same amount?

It's interesting we were talking about s-corps, because it's hard to earn an income in the first place if you don't feed yourself at some point. The top 1% may pay more, but a much smaller percentage of their money goes towards the expenses incurred in the business of not dying.

Wait, if the money goes out in an S-corp, it's not taxed, is it? An S-corp isn't taxed on income (i.e. revenue, I guess), it's taxed on the profits, isn't it?

Well, it's complicated, as you might expect, and varies state to state. Typically, the individual is taxed on the salary paid to them by the S corporation, and the profits are taxed or the losses are used as tax writeoffs for the owner(s).

Well isn't their salary considered an expense of doing business? How can someone complain about both their salary and s-corp pass through income being taxed when if not for their salary, the 'profits' of their s-corp would be that same amount higher?

And note that there are many other options besides S corporations that have to deal with things differently; I chose the S corporation because I'm the most familiar with that type.

Well if it's not a pass-through corp, what will income tax rates have to do with anything? Then it'll be about dividend and corporate and other non-income tax rates.

As an example of the kinds of things small business owners are looking at, consider this story.

That example is of C-corps converting to S-corps though. Number one, that's only a one-time issue; two, it only applies to small business owners who used to own a C-corp and converted it to an S-corp, which I don't think most small business owners are.

Robear wrote:
If the Bush tax cuts expired I would lose from $300 to $400 a month in take home pay. Largely because we have 4 children ($2,000 tax increase right there).

If you have four kids under 17, you're getting $4000 a year in tax cuts. This will drop to $2000 in 2011 (thanks to the Republicans, who sunsetted this in the first place, don't forget). $2000 a year is $167 a month, so that's what you'd lose.

Plus, my marginal rates would increase.

goman wrote:

OG - You are conflating S corporations with all taxpayers. It is not 3% of S corporations that will be hit by raising taxes on them but 17% of S corporations.

That is a significant amount. And will be bad for our economy.

I said it was 3% of all taxpayers, not taxpayers filing S corporation returns. I'm not going to get my panties in a bunch because less than a million people have their taxes go up by an amount they will likely never even notice in a significant way, especially when those tax filers have a 50% failure rate. That's right. Half of all small businesses fail. So if your business idea is so crappy that having your taxes increase by 10% will destroy your company, it's pretty danged likely you weren't going to be generating any new jobs.

Aetius wrote:
OG_slinger wrote:

There were about 4.5 million S corporation tax returns filed in 2009. Letting the Bush cuts expire will only affect 750,000 of those filers (a mere 3% of all taxpayers) and the net result is that their taxes will go up 39.6% from 36%, hardly a crippling blow.

No, not a crippling blow. On the other hand, do you think it's likely to help? Do you think a small business facing an uncertain but increasing tax burden is going to go out and hire another worker?

Yes. It will help close the massive deficit we have. Most small businesses aren't going to hire another worker because the economy is in the toilet and demand is down. That their tax burden might go up a smidgen is likely way down the list of things keeping them from hiring.

OG_slinger wrote:
goman wrote:

OG - You are conflating S corporations with all taxpayers. It is not 3% of S corporations that will be hit by raising taxes on them but 17% of S corporations.

That is a significant amount. And will be bad for our economy.

I said it was 3% of all taxpayers, not taxpayers filing S corporation returns. I'm not going to get my panties in a bunch because less than a million people have their taxes go up by an amount they will likely never even notice in a significant way, especially when those tax filers have a 50% failure rate. That's right. Half of all small businesses fail. So if your business idea is so crappy that having your taxes increase by 10% will destroy your company, it's pretty danged likely you weren't going to be generating any new jobs.

I know you said 3% of all taxpayers. I said you are conflating the particular issue of S corporations having higher tax burden. During a time of low inflation and high unemployment this is not a good idea. If on the other hand we had full employment then yes I would agree with you on those companies do not need the tax relief.

That is why I want to focus on raising taxes on the truly wealthy who are rent seeking and not nickel-and-diming architect firms or accountant offices. Tax hikes should not hit these types of companies but should hit the say the financial sector or the oil companies or the media companies. But the problem with that is those types of firms are financing our politicians so they want to lower their tax liabilities by pretending they are upper middle class and not truly the upper rentier class.

The highest tax bracket in the between the 30s and 70s averaged 500k. Of course the highest rate was higher too.

OG_slinger wrote:

Yes. It will help close the massive deficit we have. Most small businesses aren't going to hire another worker because the economy is in the toilet and demand is down. That their tax burden might go up a smidgen is likely way down the list of things keeping them from hiring.

Yeah and Roosevelt tried to close the "massive deficit" in 1937 and what did we get? A recession.

There is no reason to tax demand right now. By doing it we are screwing our ability to buy things.

goman wrote:

I know you said 3% of all taxpayers. I said you are conflating the particular issue of S corporations having higher tax burden. During a time of low inflation and high unemployment this is not a good idea. If on the other hand we had full employment then yes I would agree with you on those companies do not need the tax relief.

That is why I want to focus on raising taxes on the truly wealthy who are rent seeking and not nickel-and-diming architect firms or accountant offices. Tax hikes should not hit these types of companies but should hit the say the financial sector or the oil companies or the media companies. But the problem with that is those types of firms are financing our politicians so they want to lower their tax liabilities by pretending they are upper middle class and not truly the upper rentier class.

The highest tax bracket in the between the 30s and 70s averaged 500k. Of course the highest rate was higher too.

So the entire tax policy of this country should be determined by 750,000 businesses who will be paying a little bit more (half of which won't exist in a few years)? I don't think so. It's a shame they're going to have to pay just a little bit more, but I'm not going to lose any sleep over it, especially when my choice is to give them a break but let 0.1% of taxpayers that *really* make bank laugh their asses off. Personally, I'd love to have tax brackets for the rich, the stinking rich, and the filthy rich, but we don't. So I'd prefer not to let everyone making more than $250,000 off the hook entirely especially when that means the people who have seen their income triple over the past five years (the top 0.1% of taxpayers) get away with paying effectively nothing.

And yes, the rate was higher for the top tax bracket. Try 90%. So please don't try to tell me that taking it from 36% to 39.6% is going to trash the economy for these top earners who--just to be clear--make at least five times the median income. Poor and suffering they ain't.

goman wrote:

Yeah and Roosevelt tried to close the "massive deficit" in 1937 and what did we get? A recession.

There is no reason to tax demand right now. By doing it we are screwing our ability to buy things.

Unless you make more than $250,000 you really don't have any skin in the game, nor is Obama set to raise your taxes. He's proposed keeping the Bush tax cuts for the vast majority of folks who don't make bank.

And Roosevelt's Revenue Act of 1937 just served to cut down on tax avoidance by the rich who were hiding taxable income in trusts, incorporation, and personal holding companies and who were incorporating their yachts, estates, etc. to avoid the top personal tax rate of 79%. The Revenue Act of 1937 actually included no increase in tax rates. (BTW, Hoover raised the top personal rate from 25% to 63% in 1932. Roosevelt just raised that rate to 79% in 1935, which wasn't close to the highest it has been. If you want to see which a-hole's desire to balance the budget helped trigger the Great Depression, just look at Hoover.)

1937 was also four years into an economic expansion, which we certainly aren't suffering from, so the downturn was likely part of a natural economic cycle. 1937 also saw corporate profits drop 80%. Corporate profits today--in the midst of this recession--are just as high as they were during the boom, coming in at a pretax $1.5 trillion last year. That's hardly the same conditions of 1937.

At the end of the day increasing the effective tax rate the richest people in this country pay by 10% isn't going to trigger a recession. At the most it will shave a fraction of a percent off of our anemic growth while helping preventing the government from incurring another several hundred billion in debt.

It's not perfect, but once again, I'm not going to lose sleep over the fact that the people who can afford it the most might pay slightly more taxes then they temporarily got used to.

There's never a good time for tax increases. When you're in a recession, the word is "You're going to kill the recovery." When the economy is expanding, we hear "You're going to cause a recession!" This is the political world we live in.

The original political argument for the tax cuts was that the government had too much money. Well, that turned out to be fantasy. Now we need to return to reality.

OG_slinger wrote:
goman wrote:

I know you said 3% of all taxpayers. I said you are conflating the particular issue of S corporations having higher tax burden. During a time of low inflation and high unemployment this is not a good idea. If on the other hand we had full employment then yes I would agree with you on those companies do not need the tax relief.

That is why I want to focus on raising taxes on the truly wealthy who are rent seeking and not nickel-and-diming architect firms or accountant offices. Tax hikes should not hit these types of companies but should hit the say the financial sector or the oil companies or the media companies. But the problem with that is those types of firms are financing our politicians so they want to lower their tax liabilities by pretending they are upper middle class and not truly the upper rentier class.

The highest tax bracket in the between the 30s and 70s averaged 500k. Of course the highest rate was higher too.

So the entire tax policy of this country should be determined by 750,000 businesses who will be paying a little bit more (half of which won't exist in a few years)? I don't think so. It's a shame they're going to have to pay just a little bit more, but I'm not going to lose any sleep over it, especially when my choice is to give them a break but let 0.1% of taxpayers that *really* make bank laugh their asses off. Personally, I'd love to have tax brackets for the rich, the stinking rich, and the filthy rich, but we don't. So I'd prefer not to let everyone making more than $250,000 off the hook entirely especially when that means the people who have seen their income triple over the past five years (the top 0.1% of taxpayers) get away with paying effectively nothing.

And yes, the rate was higher for the top tax bracket. Try 90%. So please don't try to tell me that taking it from 36% to 39.6% is going to trash the economy for these top earners who--just to be clear--make at least five times the median income. Poor and suffering they ain't.

goman wrote:

Yeah and Roosevelt tried to close the "massive deficit" in 1937 and what did we get? A recession.

There is no reason to tax demand right now. By doing it we are screwing our ability to buy things.

Unless you make more than $250,000 you really don't have any skin in the game, nor is Obama set to raise your taxes. He's proposed keeping the Bush tax cuts for the vast majority of folks who don't make bank.

And Roosevelt's Revenue Act of 1937 just served to cut down on tax avoidance by the rich who were hiding taxable income in trusts, incorporation, and personal holding companies and who were incorporating their yachts, estates, etc. to avoid the top personal tax rate of 79%. The Revenue Act of 1937 actually included no increase in tax rates. (BTW, Hoover raised the top personal rate from 25% to 63% in 1932. Roosevelt just raised that rate to 79% in 1935, which wasn't close to the highest it has been. If you want to see which a-hole's desire to balance the budget helped trigger the Great Depression, just look at Hoover.)

1937 was also four years into an economic expansion, which we certainly aren't suffering from, so the downturn was likely part of a natural economic cycle. 1937 also saw corporate profits drop 80%. Corporate profits today--in the midst of this recession--are just as high as they were during the boom, coming in at a pretax $1.5 trillion last year. That's hardly the same conditions of 1937.

At the end of the day increasing the effective tax rate the richest people in this country pay by 10% isn't going to trigger a recession. At the most it will shave a fraction of a percent off of our anemic growth while helping preventing the government from incurring another several hundred billion in debt.

It's not perfect, but once again, I'm not going to lose sleep over the fact that the people who can afford it the most might pay slightly more taxes then they temporarily got used to.

OG - By saying this you are not helping the recovery. 1936-1937 was not even close to a full recovery but Roosevelt listened to the deficit hawks. It was not until the WWII that we really ran up deficits and guess what. A full recovery.

It is better to extend all tax breaks than to not extend them at all. If you have been reading my proposals they are even more progressive than yours in just keeping the taxes we have had for taxpayers less than $200,000.

My proposals have been - payroll tax holiday, extend unemployment benefits, subsidize green technologies, capital gains taxes same as income taxes, $1 Trillion in new stimulus, not a measly $250B in 5 years or whatever Obama is proposing.

STOP Worrying about the deficit. Once we have full employment (More Taxpayers) it will take care of itself. That is how Clinton got a surplus (which meant that we were taxing too much).

Also we are paying less in interest payments now than we were in Clinton's years. YES interest rates matter.

goman wrote:

My proposals have been - payroll tax holiday, extend unemployment benefits, subsidize green technologies, capital gains taxes same as income taxes, $1 Trillion in new stimulus, not a measly $250B in 5 years or whatever Obama is proposing.

None of these have any chance of passing any time soon. Extending unemployment benefits would have the best chance, but even that looks like a non-starter. The choice is basically allow the tax cuts to expire, or don't let them expire. The republicans are probably thinking that if they hold firm on lower taxes for the wealthy, eventually Obama will push to extend all the cuts because he's promised that middle class folks won't have a tax increase. I figure eventually Obama and the democrats will crack.

Deficits as percentages of GNP during WWII

1942 - 14.5%
1943 - 31.1%
1944 - 23.6%
1945 - 22.4%

Unemployment Rate

1940 - 14.6%
1941 - 9.9%
1942 - 4.7%
1943 - 1.9%
1944 - 1.2%
1945 - 1.9%

This is the lowest unemployment rate during the last 70 years.

Funkenpants wrote:
goman wrote:

My proposals have been - payroll tax holiday, extend unemployment benefits, subsidize green technologies, capital gains taxes same as income taxes, $1 Trillion in new stimulus, not a measly $250B in 5 years or whatever Obama is proposing.

None of these have any chance of passing any time soon. Extending unemployment benefits would have the best chance, but even that looks like a non-starter. The choice is basically allow the tax cuts to expire, or don't let them expire. The republicans are probably thinking that if they hold firm on lower taxes for the wealthy, eventually Obama will push to extend all the cuts because he's promised that middle class folks won't have a tax increase. I figure eventually Obama and the democrats will crack.

I think this is a political ploy for the Democrats. This is why they waited until right before the November elections to deal with it. This was a long term strategy for them.

It is good for Democrats and their base. They can now show the people that Republicans do not care about the deficit, all they care about is tax cuts for the rich. This will energize their base to vote for them.

However I think the Democrats should even be more bold in proposing lower taxes for the middle class but since they didn't they lost that opportunity. Perhaps to placate some of their financiers and to placate the misguided deficit hawk Democrats.

From the what I have read.

Tax increase on upper income people is $678B through 10 years. This is averages as 68B a year.

Bush Tax rates extended for those less than $200,000 (97% of taxpayers). This is not a tax cut. It is the same as we paid the last 10 years.

Stimulus and one time tax credits - $250B

Sorry Obama's plan is not good enough. It will stifle the economy. Just because we want to balance the budget.

goman wrote:

However I think the Democrats should even be more bold in proposing lower taxes for the middle class but since they didn't they lost that opportunity.

I don't think democrats can push the "tax cuts stimulate growth" idea because it would fundamentally admit what republicans have been saying for the past 30 years. And what would they get out of it? The republicans aren't going along with a middle class tax cut. They aren't even going along with a middle class tax stay-the-same. The politics of this aren't going to work.