Bill Kristol tells GOP to come back to the table.

Greg wrote:

Income tax is owed the moment that income is realized.

If the tax withholding tables are not adjusted, you will be required by law to make quarterly estimated tax payments. At the end of the year, you may be responsible for penalties and interest if you pay too little throughout the year.

Families are going to get crushed. My taxes will go up $2,000 just for having 4 dependents. This does not include my increased payroll or income taxes. It has been a long time since the Bush tax cuts were enacted, people forget how much their taxes went down.

$76 per paycheck (assuming bi-weekly pay - plus a bit more for the payroll taxes and such, so let's say an even $100)? The really poor will feel the pain associated with the increased taxes, but anyone middle-class and up won't notice a thing.

billt721 wrote:

$76 per paycheck (assuming bi-weekly pay - plus a bit more for the payroll taxes and such, so let's say an even $100)? The really poor will feel the pain associated with the increased taxes, but anyone middle-class and up won't notice a thing.

Anecdotally, that extra 200 bucks a month for someone in the middle class range would still be pretty painful. That's a car payment.

Although I had heard on NPR that the Jan 1st deadline was arbitrary,(that they actually had another month or more in reality) it would really be a depressing start to the new year if these clowns don't come to some agreement today. The media is lapping this drama up which makes me feel as if it's all just a game and I have grown numb towards caring about it. If I were more prone to conspiracy theories I would think they are purposefully working towards making the public more apathetic than they already are with stunts like this. Ugh.

Regardless, Happy New Years to everyone.

The Two Sides Are Now Absurdly Close On A Fiscal Cliff Deal — Here's The Latest Offer

The Democrats made several key concessions yesterday in the Fiscal Cliff negotiations.

As a result, the two sides are absurdly close together. If we don't get a deal at this point, the entire country will be justified in being outraged.

Here's the Democrats' latest offer, as reported by Lori Montgomery and Paul Kane of the Washington Post:

* The Democrats agreed to raise the income threshold for tax increases to $450,000 a year (couples) from the prior $250,000. The Republicans are insisting on $550,000 threshold. This is a massive tax cut for almost the entire country relative to the rates that will otherwise take effect on January 1. (So agree on $500,000 already and call it a day.)

* However, to the Republicans' chagrin, the Democrats insist on raise capital gains and dividend taxes to 20% on households over $250,000 and reducing some of the allowable deductions. Importantly, this, too, is a massive tax cut relative to the scheduled changes, which would boost dividend taxes to 40% on incomes over $250,000.

* The Democrats conceded on the estate tax: They'll keep the threshold for taxable estates at $5 million, with a 35% rate over that level. This, again, is a massive tax cut over current law, in which the threshold will drop to $1 million with a much higher rate.

* The Democrats' offer would permanently protect middle-class households from the Alternative Minimum Tax. No details on how this would work.

* On the spending side, the Democrats' offer would delay the "sequester" (automatic spending cuts) until 2015. This would cost an estimated $200 billion. But it would avoid the cuts to the military budget that the Republicans are so desperate to avoid.

* The Democrats would also extend unemployment benefits for a year, extend farm subsidies for a year, and avoid a 27% cut in Medicare payments to doctors. The Republicans say they want offsets to these spending cuts.

When you boil all that down, the two sides are absurdly close.

The Republicans say they want spending cuts to offset the postponement of the sequester spending cuts, but the Republicans do not appear to have proposed anything in particular. Also, the postponement will only cost $200 billion over two years, which is not much on a government budget of $4 trillion a year. And the postponement of the cuts will avoid a shock to the weak economy, which will likely help on the tax revenue side.

On the tax side, the country will be getting a massive tax cut over the new taxes that will take effect on January 1. The current low income and investment tax rates for 98% of the country would be extended, and the income tax rates would be extended on even more households. The fact that the two sides are still haggling over whether the threshold for a modest income tax increase should be $450,000 or $550,000 is almost comical.

(At some point, taxes are going to have to rise modestly for everyone. If it's this hard to raise taxes even on the richest 1% of the country, imagine what the fight will be like when this increase will hit all Americans).

It's worth noting that this proposed deal would be good for the economy, especially relative to the Fiscal Cliff. The postponement of most of the tax hikes and spending increases would preserve the status quo, avoiding the austerity shock that will otherwise hit growth. The deal would likely boost the deficit over the next two years, but, again, neither side is arguing that the Fiscal Cliff would be preferable to a deal.

It's truly sad to the the Democrats roll on the Estate Tax. It was finally going to get back up to where it was under Clinton, 55%, next year. Keeping it at 35% is a massive, massive tax break and one that will only benefit the ultra wealthy. Allowing wealth to be concentrated and then passed down to heirs is a dangerous thing for a democracy...

Greg wrote:

Right now, the public believes that taxing the rich will fix the problem.

I'm sure you can find some that believe this, but anyone who believes this has not been listening. Obama has been crystal clear that more taxes on the rich is PART of the solution - and cuts are also needed. The GOP is saying cuts only.

Both current fiscial cliff offers don't address the massive deficit, but we have to be realisitc - to get the cuts necessary for the deficit the money has to come from Social Security, Medicare, or Defense. You can complain about crazy government funded studies and pointless departments, but if you want to actual take a bite out of the deficit it needs to come from those three slices of the pie. Medicare and Social Security are needed far more by middle and lower incomes than the rich, so it is frustrating to see the GOP pusing on cuts on these "entitlements". To me the answer is cuts to our outrageous defense budget (which apparently is un-American to suggest) and increase taxes on everyone - with a larger burden on higher income people. Try 45% above $500k and 50% over 1 million.

EDIT: Also, I support increasing the capital gains tax, especially at a certain income threshold.

OG_slinger wrote:

It's truly sad to the the Democrats roll on the Estate Tax. It was finally going to get back up to where it was under Clinton, 55%, next year. Keeping it at 35% is a massive, massive tax break and one that will only benefit the ultra wealthy. Allowing wealth to be concentrated and then passed down to heirs is a dangerous thing for a democracy...

I'm really of two minds on this. On one hand, I have a reflexive aversion to anything that boils down to the government having a right to come take part of your money. We can argue up and down about if the heirs really deserve it, or how much someone has benefitted from the current national setup (and thus owes the country in the form of paying something back). But at the end of the day, it's difficult not to see this as a fundamentally problematic thing: allowing the IRS to just come take a slice because the money has changed hands. I mean, that's what taxes are, sure, but it just seems overmuch.

On the other hands, though, I do basically agree with the above (both OG's comment and my sentiment from the previous paragraph): Allowing wealth to be concentrated in that manner is extremely damaging to a functioning free society. And people who prosper a great deal obviously owe something to the society that has set up a place for them to flourish.

At the end of the day, I am somewhat paralyzed with indecision on this one.

The Republicans say they want spending cuts to offset the postponement of the sequester spending cuts, but the Republicans do not appear to have proposed anything in particular.

This right here is the problem. Don't say you want something, but not tell us what you want. That's ridiculous at best. If you want more cuts, propose cuts (preferably proposing cuts that have a chance of being agreed with rather than something outlandish), don't try to make the other side play a guessing game on the day of.

PoderOmega wrote:
Greg wrote:

Right now, the public believes that taxing the rich will fix the problem.

I'm sure you can find some that believe this, but anyone who believes this has not been listening. Obama has been crystal clear that more taxes on the rich is PART of the solution - and cuts are also needed. The GOP is saying cuts only.

Both current fiscial cliff offers don't address the massive deficit, but we have to be realisitc - to get the cuts necessary for the deficit the money has to come from Social Security, Medicare, or Defense. You can complain about crazy government funded studies and pointless departments, but if you want to actual take a bite out of the deficit it needs to come from those three slices of the pie. Medicare and Social Security are needed far more by middle and lower incomes than the rich, so it is frustrating to see the GOP pusing on cuts on these "entitlements". To me the answer is cuts to our outrageous defense budget (which apparently is un-American to suggest) and increase taxes on everyone - with a larger burden on higher income people. Try 45% above $500k and 50% over 1 million.

EDIT: Also, I support increasing the capital gains tax, especially at a certain income threshold.

Agreed on all points. However, the income threshold on capital gains tax wouldn't do much. Remember Steve Jobs having a salary of $1/year? He just got a sh*tload of stock, which he only had to pay 15% on as he drew money out of his investments.

Bonus_Eruptus wrote:

Agreed on all points. However, the income threshold on capital gains tax wouldn't do much. Remember Steve Jobs having a salary of $1/year? He just got a sh*tload of stock, which he only had to pay 15% on as he drew money out of his investments.

Sorry, I didn't mean income. I meant a total gains. So anything over $100k in capital gains has a higher tax (for example).

Bloo Driver wrote:
OG_slinger wrote:

It's truly sad to the the Democrats roll on the Estate Tax. It was finally going to get back up to where it was under Clinton, 55%, next year. Keeping it at 35% is a massive, massive tax break and one that will only benefit the ultra wealthy. Allowing wealth to be concentrated and then passed down to heirs is a dangerous thing for a democracy...

I'm really of two minds on this. On one hand, I have a reflexive aversion to anything that boils down to the government having a right to come take part of your money. We can argue up and down about if the heirs really deserve it, or how much someone has benefitted from the current national setup (and thus owes the country in the form of paying something back). But at the end of the day, it's difficult not to see this as a fundamentally problematic thing: allowing the IRS to just come take a slice because the money has changed hands. I mean, that's what taxes are, sure, but it just seems overmuch.

On the other hands, though, I do basically agree with the above (both OG's comment and my sentiment from the previous paragraph): Allowing wealth to be concentrated in that manner is extremely damaging to a functioning free society. And people who prosper a great deal obviously owe something to the society that has set up a place for them to flourish.

At the end of the day, I am somewhat paralyzed with indecision on this one.

Preventing the rise/growth of an aristocratic class is a good thing, and an estate tax is a great way to work towards that goal. That ship has pretty much sailed in the US, granted, but the principle is sound. I'm curious, why do you think it is overmuch in the case of the estate tax? It is below income tax levels, and has been for most of the time it has existed(post-Reagan rate slashing, it was higher, though the threshold makes that irritating to directly compare).

Kraint wrote:

Preventing the rise/growth of an aristocratic class is a good thing, and an estate tax is a great way to work towards that goal. That ship has pretty much sailed in the US, granted, but the principle is sound. I'm curious, why do you think it is overmuch in the case of the estate tax? It is below income tax levels, and has been for most of the time it has existed(post-Reagan rate slashing, it was higher, though the threshold makes that irritating to directly compare).

Not to mention that, if the compromise goes through, the Estate Tax would only apply to about 1 million Americans. They're the only ones that have assets worth more than $5 million. This is a massive giveaway to the ultra wealthy and something that Obama should have held fast on.

You just have to look at the Koch Brothers or folks like Sheldon Adelson to see that concentrated, inheritable wealth coupled with Citizens United is absolutely terrible for the country. It allows a handful of extremely rich people to essentially take over the political discourse of the nation.

Adelson single handedly financed Gingrich's campaign, writing checks for tens of millions of dollars, and kept him in the GOP primary far longer than he should have been based on the preferences of primary voters.

Even if the bought candidate doesn't win they can influence the direction and tone of the election and even shape the field of candidates from which voters ultimately have to choose. That's simply far too much power for one person--or one family--to have.

OG_slinger wrote:

You just have to look at the Koch Brothers or folks like Sheldon Adelson to see that concentrated, inheritable wealth coupled with Citizens United is absolutely terrible for the country. It allows a handful of extremely rich people to essentially take over the political discourse of the nation.

While I agree that it would be nice for Obama to get the estate tax applied at a lower bar I also feel that this is definitely a point he could budge on. Guys like the Koch Brother and Adelson, as well as most of the other societal manipulators are billionaires so those kinds of assets would still be affected. While I would live out my days comfortably with 5 milliion dollars in assets I doubt I would be building my own fiefdom and starting a family dynasty which is really what the estate tax was designed to prevent.

Every thing on that list of Democrat concessions I really don't want to see happen. The only thing there that I particularly like is extending Unemployment Benefits, but I certainly don't want to trade everything else on that list for it.

Just enjoy New Years Eve Democrats, spend time with your family, watch the ball drop, sleep in. Then on the second propose the tax cuts you actually want.

Looks like it will be a bad day for deficit reduction.

Kehama wrote:
OG_slinger wrote:

You just have to look at the Koch Brothers or folks like Sheldon Adelson to see that concentrated, inheritable wealth coupled with Citizens United is absolutely terrible for the country. It allows a handful of extremely rich people to essentially take over the political discourse of the nation.

While I agree that it would be nice for Obama to get the estate tax applied at a lower bar I also feel that this is definitely a point he could budge on. Guys like the Koch Brother and Adelson, as well as most of the other societal manipulators are billionaires so those kinds of assets would still be affected. While I would live out my days comfortably with 5 milliion dollars in assets I doubt I would be building my own fiefdom and starting a family dynasty which is really what the estate tax was designed to prevent.

It's not really about the $5 million as it is about the lower rate. Then again anyone that is a billionaire probably has their money offshore or a shell company money or some other accounting trick to get out of taxes anyway.

Well the news is saying there will NOT be a house vote today.

Way to go morons.

JC wrote:

Well the news is saying there will NOT be a house vote today.

Way to go morons.

Sooooo, the ball was in the Democrats court, they put out a new plan for approval... and the House closes their eyes for a nap. I'm guessing the ball will be back in their court, immediately followed by said ball being passed to them and hitting them right in the face.

Kraint wrote:

Preventing the rise/growth of an aristocratic class is a good thing, and an estate tax is a great way to work towards that goal. That ship has pretty much sailed in the US, granted, but the principle is sound. I'm curious, why do you think it is overmuch in the case of the estate tax? It is below income tax levels, and has been for most of the time it has existed(post-Reagan rate slashing, it was higher, though the threshold makes that irritating to directly compare).

It's not the % itself that bothers me, just its existence. I "get" most taxes and their purpose. They help the government machine to function on the levels that it should function (ideally), and the taxes are usually tied to things that seem relevant to government oversight, regulation, or involvement. The estate tax feels like simply penalizing the money from moving to an heir - what did the government do to protect that transaction? What is the government's role and right to take some? There are some decent answers to those questions, but to me they've always been subjective in their relevance. I never really agreed much with the justification.

If the point is strictly to avoid too much money ending up in the hands of a tiny minority, I feel there are more direct and less pussyfooted ways to go about that.

I know it is a bit dramatic because nothing is stopping a vote on tax cuts and defense budget increases next week, but really, tax increases for $450k families was just something that couldn't be stomached? Did they really need to make the lie about Obama raising taxes come true?

Dollars to donuts, the Republicans will call their adoption of the president's plan a tax cut, since they'll enact it after 1159pm Dec 31st.

Bloo Driver wrote:

The estate tax feels like simply penalizing the money from moving to an heir - what did the government do to protect that transaction? What is the government's role and right to take some?

Bill Gates Sr.[/url]]
A common, and misguided, criticism of the estate tax is that individuals who work hard and save their money should be entitled to pass on the fruits of that labor to their family. I am not against working hard, saving money, or taking care of your family.

However we must acknowledge that the person who accumulates wealth in this country was not able to do that independently. The simple fact of living in America, a country with stable markets and unparalleled opportunity fueled in part by government investment in technology and research (something my family has plenty of firsthand experience of), provide an irreplaceable foundation for success and have created a society which makes it possible for some men, women and their children to live an elegant life.

I attended the University of Washington under the G.I. Bill, and then became a lawyer enjoying a successful career that allowed me to provide well for my family so that they in turn were able to create their own wealth. So I believe that those of us who have benefited so greatly from our country's investment in our lives should be asked to give a portion of our wealth back to invest in opportunities for the future.

Society has a just claim on our fortunes and that claim goes by the name estate tax.

edit

PoderOmega wrote:

I know it is a bit dramatic because nothing is stopping a vote on tax cuts and defense budget increases next week, but really, tax increases for $450k families was just something that couldn't be stomached? Did they really need to make the lie about Obama raising taxes come true?

No, they are haggling over when spending cuts will actually go into effect.

Greg wrote:
PoderOmega wrote:

I know it is a bit dramatic because nothing is stopping a vote on tax cuts and defense budget increases next week, but really, tax increases for $450k families was just something that couldn't be stomached? Did they really need to make the lie about Obama raising taxes come true?

No, they are haggling over when spending cuts will actually go into effect.

And yet, when part of their counter proposals are always a higher number for yearly income, it's valid. Is more of their concern something else? Maybe. I really don't know that you can even say they are haggling when they keep saying cut something... but then not saying what cuts they want. That's not debating or compromising in good faith, it's playing a guessing game or hoping the other side is psychic and is willing to cut something that would make them unpopular so you don't have to be the one labeled as cutting this super important program.

Bloo Driver wrote:

It's not the % itself that bothers me, just its existence. I "get" most taxes and their purpose. They help the government machine to function on the levels that it should function (ideally), and the taxes are usually tied to things that seem relevant to government oversight, regulation, or involvement. The estate tax feels like simply penalizing the money from moving to an heir - what did the government do to protect that transaction? What is the government's role and right to take some? There are some decent answers to those questions, but to me they've always been subjective in their relevance. I never really agreed much with the justification.

If the point is strictly to avoid too much money ending up in the hands of a tiny minority, I feel there are more direct and less pussyfooted ways to go about that.

My position is based on me not seeing that transfer as something sacrosanct. If I choose my child or a talented stranger who has endeared themselves to me, the transaction is the same. If I transfer my wealth on my 70th birthday or after my death, the transaction is the same. It is, to me, simply another business transaction with less-tangible deliverables than the average. I can see with your interpretation of the government's right to tax on a tariff level, rather than a more basic transaction level though.

The inheritance tax as a wealth-limiting device is, to me, a fairly elegant solution since it specifically targets the accumulation of generational wealth. It is less about capping any one person's wealth, and is closer in principle(in my mind) to anti-monopoly laws.

From the USAToday

At his White House event earlier in the day, Obama told an audience of cheering supporters that a proposal would help reduce the nation's $16 trillion-plus debt through higher taxes on the wealthy. He also said it would also extend unemployment insurance and preserve tax credits for such middle class items as child care and education.

The messaging has been that taxing the rich will take care of the problem. The full package of tax hikes will not reduce the $16 trillion debt by 1 cent. Plus it looks like a tax deal has been reached which will preserve our $1 trillion deficit for the next year.

A pox on all of their houses for mismanaging the government's finances.

I agree with that sentiment, Greg.

Where has it been said that these taxes will absolutely solve the problem of the national debt? Help solve the deficit? Definitely. Eradicate it AND pay off the debt? I don't think I have heard that from anyone.

Greg, that's not a quote from Obama. Here's one from the same article.

The president said he would have preferred a bigger debt reduction deal, but congressional Republicans balked and now it will have to be done "in stages." Down the line, Obama said he will continue to insist that debt reduction be balanced with revenues as well as spending cuts, foreshadowing a second term defined by budgetary clashes with Republicans.

"It's going to have to be a matter of shared sacrifice, at least as long as I'm president," Obama said. "And I'm going to be president for the next four years, I hope."