taxes

On the tax cuts deal

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I’ve been complaining about those Bush tax cuts for a few months. Now the deal is (almost) done. I’ll just like to some more articulate people’s thoughts on why lots of Democrats will be looking around for a new leader over the next 20 months.

This “deal” Obama just made with Rep.s:$900 billion UNpaid for! Where r Teabaggers to protest? Ben Franklin costume in the wash?

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Ok I’m starting to scream at Obama on tv the way I used to with Bush – not a good sign

– @billmaher

My conversations with various progressives over the past 24 hours have convinced me that the problem is less the specifics of the deal — though liberals legitimately dislike the tax cuts for the rich, and rightly point out that Obama swore to let them expire — than the way in which it was reached. Put simply, Obama and the Democrats didn’t fight for them. There were no veto threats or serious effort to take the case to the public.

Instead, the White House disappeared into a closed room with the Republicans and cut a deal that they’d made no effort to sell to progressives. When the deal was cut, the president took an oblique shot at their preferences, saying “the American people didn’t send us here to wage symbolic battles or win symbolic victories.” And this came a mere week or two after the White House announced a federal pay freeze. The pattern, for progressives, seems clear: The White House uses them during elections, but doesn’t listen to, or consult them, while governing. In fact, it insults them, and then tells them to quiet down, they got the best bargain possible, even if it wasn’t the one they’d asked for, or been promised.

– Ezra Klein

…if Democrats give in to the blackmailers now, they’ll just face more demands in the future. As long as Republicans believe that Mr. Obama will do anything to avoid short-term pain, they’ll have every incentive to keep taking hostages. If the president will endanger America’s fiscal future to avoid a tax increase, what will he give to avoid a government shutdown?

– Paul Krugman

Mr. President, for these meager crumbs, you have given up costly, insulting, divisive, destructive tax cuts for the rich and you have given in to Republican blackmail which will be followed by more Republican blackmail.

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This President negotiates down from a position of strength better than any politician in our recent history. It is too late now to go back and ask why the President, why the wobbly Democratic leadership, whiffed on its chance to force John Boehner to put his money where his mouth was. In September Boehner said if he had no other option, of course he would vote to extend tax breaks only for the middle class.

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We have enabled this President, and his compromises-spinning-within-compromises. And now there are, finally, those within his own party who have said “enough.” In the Senate, the Independent, Mr. Sanders has threatened to filibuster this deal. He deserves the support of every American in doing so, as does Mr. Conyers and Mr. McDermott and the others in the house. It is not disloyalty to the Democratic party to tell a Democratic president he is wrong; it is not disloyalty to tell him he is goddamned wrong.
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It is not disloyalty to remind him that we are not bound to an individual. We are bound to principles. If the individual changes, or fails often and needlessly, then we get a new man. Or woman. None of that is disloyalty. It is self-defense.

– Keith Olbermann

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Bush tax cuts (cont’d)

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I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief.
– John McCain, May 2001

Obama wants to let the Bush tax cuts on the wealthiest expire at the end of the year, while extending the cuts for the middle-class. Of course, the GOP labels what the Democrats want to do as “the largest tax cut in history”. Given that the after-tax income of the top 1% has gone up 281% over the past 30 years, I think they can afford it.

Spending way too much time looking into the Bush tax cuts

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Inspired from one of those things I starred in Google Reader:

There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue because of the vibrancy of these tax cuts in the economy.
– Senate Minority Leader Mitch McDonnell (R-KY)

(TPM via Ezra Klein)

It’s legitimate to praise the Bush tax cuts if your goal as a conservative is to enhance the wealth of the wealthy. If you are wealthy or you aspire to be wealthy and like to think that your hypothetical wealth would grow unbounded, the tax cuts look pretty vibrant. If you’re not in the top 10% of earners, not so vibrant:

As for that deficit that Tea Partiers are so upset about, that they’re so certain mostly composed of Obama’s socialist agenda:

Here’s another fancy chart (click to see it in all of its full fanciness):

Technically, McConnell is correct, in that IRS receipts went up over the past decade. This chart is from a right-wing website, which, like McConnell, touts how revenue increases followed the tax cuts.

I am obviously no economist, but tax revenues would’ve gone up anyway. All raw economic numbers are always going up. So this is a pretty silly argument, right? I’m inviting a conservative to chime in and tell me why it’s not a silly argument. And if it’s not a silly argument, the CBO numbers on the impact of the tax cuts on the deficit are still pretty damning. Conclusions on the numbers on their effect on income-inequality are subjected to one’s political philosophy, I suppose.

Geez, this amateurish in-depth analysis took up a lot of my time tonight. No wonder I usually stick to Sarah Palin sound-bytes.

Changing the subject

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Sometimes I just have to write about anything just to take the focus off of the previous entry. What a horrible post….

Um…so I’ve been going to the Durham Neighborhood College for the past six or so weeks now. We’ve got a class project. My group is supposed to come up with something (a proposal? a Powerpoint presentation? I don’t really know) related to Durham’s revenue-generating options, specifically the state-legislature-recently-allowed 4/10 percent land transfer tax and 0.25 sales tax increase (each of which voters would have to approve, and neither in scheduled to be on the ballot in the 2008 at this point in time). I went to a forum on these about a year ago and even took some notes. I think Kevin covered it pretty extensively as did other local bloggers, so I really just need to go back to April (?) and read up. Since then, I know 16 counties have voted down the transfer tax. 6 counties voted down the sales tax increase and just two voted for the increase. Then again, most counties in N.C. are probably conservative. If Durham County put these on the ballot, they’d have a better chance of passing then in just about any other county in the state, although I doubt it would be much more than a 50% chance.

My viewpoint, which seems overly simplistic, is that I can’t see how a 0.004 additional transfer tax is going to cause anyone much pain, contrary to what most real estate professionals seem to imply in their well-funded campaigns statewide to squash these referendums. Again, maybe this is just very naive, but this is what I’m thinking…
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The sexy, sexy topic of Durham taxes

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Durham County needs to raise some revenues. The two options are a sales tax increase of a quarter-percent or a land-transfer tax of 0.4%. The N&O covers the topic in depth here.

So here’s my two cents… Maybe I’m wholly impractical and naive, but having the county manager Mike Ruffin advocate the regressive tax over the progressive tax simply because he’s scared of realtors gives me 0% confidence in my government to do the work of the people.

A sales tax is easy because everyone expects it and few people notice the difference between 6.75% and 7.00% and 7.25%. Unfortunately, sales tax really dicks over poor people. I’m talking out of my rear right now, but, for what’s it’s worth, I’m trying to do it skillfully. Say the household of I.M. Poor earns $24,000 a year, or $2,000 a month. They spend $500 (or 25%) on consumable, taxable goods. Say the sales tax is 6%. They’ve just paid $30 in sales tax for the month.

The household of Ima Doctor earns $240,000 a year, or $20,000 a month. They don’t need to spend every penny every month to live comfortably. They live on $10,000 a month, and say 30% of it is on consumable, taxable goods. They’ve just paid $180 in sales tax for the month.

I.M. Poor’s household sees 1.5% of its income go towards paying sales tax.
Ima Doctor’s household sees just 0.9% of its income go towards paying sales tax.

(If an economist or more-learned persons wants to fine-tune the figures in this example, go right ahead).

Ima Doctor: Why should I be penalized for making a lot of money?

Ima, congratulations on the success you’ve achieved, regardless of whether it was achieved through hard work or through Dad paying for medical school and the downpayment on your house. You’ve done well, and your government simply asks that you carry a little bit more of the burden for those among us who don’t do so well–your nurses, your gardeners, your kids’ teachers, your 911 operators, your local IT professionals…

Anyway, it comes back to your basic philosophies about the roles of government and its citizens. I feel the same way about our North Carolina “Education” Lottery, by the way. It’s just a tax on poor people, an insulting, manipulative tax on those who have the most trouble making ends meet. Or if you’re gonna have a gambling tax, at least let us legally play poker and tax that!

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Kevin describes the issue in depth at Bull City Rising

Barry at Dependable Erection on how the mighty Realtors don’t even want the transfer-tax option on the ballot