I’ll be posting my thoughts on the tax deal in a moment but first I want to know, what do you think?
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13 thoughts on “Your Feedback on The Tax Deal”
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Tax Deal??? what happened to making the Tax Code simple. All this is the ‘Making more work for Computer Programmers and Tax Accountants Act.’
I know I’m ignorant, but this poll makes no sense to me. How about one with options like: I like it, I don’t like it or I’m not sure?
@ Jim…. It will never happen.
If we were going to extend the cuts, we should’ve made up the lost revenue by getting rid of some major deductions. At this point, we’re not cutting taxes: we’re just shifting them to the future, concentrating them so that they do more damage.
And if we’re going to temporarily cut the payroll tax during time of weak employment, it would’ve been better to cut the other side of it (if wages are flexible, it wouldn’t make a difference, but insofar as they wouldn’t, this cut makes unemployment worse but doing it on the other side would’ve helped).
The only upside is cutting taxes on savings.
The tax deal is a tough pill to swallow, but I’ll do it. I think the President’s comments that the Republicans were holding the government (and the American people hostage) are valid. Remember top earners got the largest tax breaks when the original cuts were enacted (4.6% to others getting 3%), and they were also the one who benefited most from reduced capital gains and dividend rates.
Certainly there was a lot of debate about whether the $250K limit that was originally proposed for extension was “rich”, but when the Republicans blocked a proposal to extend the cuts for all those making less than $1,000,000 per year they went way to far.
First, anyone making more than $1,000,000 a year isn’t hurting because of the economy. Second, if the goal of extending the cuts for higher earners was to encourage investment and job creation a million dollar limit would have been great. If a business owner is taking home more than a $1,000,000 than there is plenty of money to hire workers, but they choose to take it for themselves. Raising rates at that point actually encourages keeping money in the business (investment) and bringing on more workers (jobs), because the cost of pocketing it goes up. Finally, there is a significant cost to the tax deal that needs to be dealt with. The deal gives congress time to have the debate and make hard decisions, but if those hard decisions don’t include both lower spending (even on defense and entitltements) and higher taxes it will end up hurting all of us, and particularly the younger generations in the end.
“Remember top earners got the largest tax breaks when the original cuts were enacted.”
What would be an example (even hypothetical) of a tax cut that doesn’t benefit a high income person more than a low income person (at least in dollar terms)? Isn’t that more or less the definition of an income tax? In order to have higher income people get a smaller cut, you have to raise their taxes
I truly don’t understand why the Democrats try to villify the rich? Why should one economic class have to carry the financial burden of all? If you look at percentages, the rich already do pay far more than the middle and lower income. Hitler villify the jews in the 1930’s and sold the belief that they were at fault for Germany’s economic troubles when, in fact, it was the German government that caused the problems of the country with WWI. The same holds true now. Why are the rich bad? Because they were a little smarter, a little luckier, a little more ambitious and succeed on a large scale? Extending the tax breaks for all is the correct thing to do. Cutting spending is the direction our government needs to look in. Not taking more money out of the American people’s pocket.
I can’t speak for Democrats, Doug, but I will say that I differ from you in economic policy. In our current economic climate, a lot of people are suffering quite severely. The Bush Tax Cuts were supposed to be the government handing us all some money because we had a surplus. The reason I am for the tax cuts expiring is because we no longer have a surplus.
It’s our responsibility to pay more when we can. Otherwise we’re letting the next generation pick up the bill, while not letting the economy improve in the meantime.
I don’t think of that as villifying the rich, though.
Where do you think spending should be cut?
Ryan, a tax cut in the form of a refundable credit benefits all tax payers equally. Other than that, yes, tax cuts benefit you more the higher your income, but I was speaking purely in terms of percentage rate decrease from the original tax cuts.
Doug, your comparison of progressive tax structures to the villification of Jewish people by Hitler is off target, and honestly a little offensive. I don’t think advocates of a progressive income tax structure villify the rich, I certainly don’t. BUT, people get rich in the U.S. not just because of their own abilities, but because of the infrastructure and economic policies put in place by the government. And the rich benefit at a greater rate, and therefore have the responsibility to pay a greater share. Example, everyone benefits from the the interstate highway, but the owner of a national trucking company benefits a great deal more than the guy driving ten miles to work. Another example, the bank executive and large private investors benefit more from responsible regulation of the finacial sector than does the single mom living paycheck to paycheck. A third example, the owners of corporate farming benefit much more from agricultural subsidized than does the subsitance farmer in Idaho.
The rich aren’t bad people (for the most part), but they do have the most resources and benefit the most from the systems the government has put in place. So they should also have greater responsibility when it comes to paying taxes.
Tim,
I’m not sure whether percentage point rate cuts are the best way to look at benefit (as opposed to dollar terms), but let’s recall that the biggest change in marginal rates (in total point or percentage terms) from EGTRRA was the 10% bracket’s creation. I agree that lump sum payments (“refundable tax credits” that aren’t tied to income) doesn’t go to one group more than the other. (Except in the long run, when such credits must come from higher taxes or lower spending elsewhere, so they sort of do. Which is not to say I’m opposed to lump sum payments; they’re clearly much better than any other form of redistribution … which raises the question of why everyone always thinks progressivity is the end all and be all of redistribution.)
As for the matter of how high income people manage to make so much, I’m willing to concede that there’s probably a lot of causal effect from stuff like the market system, culture, the size of the population, etc. But I think it’s a stretch to equate “benefit from society” with “benefit from government.” At the very least, you seem to be asserting that which is up for debate. Furthermore, most of the sort of things you are mentioning as having a large benefit for high income people (e.g., roads, courts) are a pretty trivial percentage of government spending; the big stuff are things that benefit high income people no more than anyone else (defense) or more often, even less (entitlements). You make a good point that farm subsidies & other (let’s call it what it is) corporate welfare is just that, but it’s hard to see why the response should be “let’s tax all high income people more” rather than “let’s abolish farm subsidies and protectionism.”
I think you’re on much firmer ground when you justify higher taxation on high income people on purely utilitarian grounds that you think they’re more able to afford it. That seems much more straightforward and open.
Sorry, long-winded comment. I know, I know, GYOB already
You have no block to check for my opinion on the tax deal. I was for back for the rich, extend for the poor. The cuts never worked anyhow. Go back to what they were and try something else.
I think that the Senate will not muster the 60 votes necessary to pass this legislation. On January 1, 2011, the Bush tax cuts will expire.
Jim, I’m taking you with me to Vegas.