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TAX POLICY: Time’s up for tax cuts

Letter by Carol Dedrick, Tacoma on Aug. 23, 2010 at 3:02 pm with 57 Comments »
August 25, 2010 2:29 pm

On “Meet the Press” last Sunday, Senate Minority Leader Mitch McConnell refused to discuss paying for extensions of the Bush tax cuts, saying that they are current tax policy.

I’d like to remind McConnell that their expiration is also current tax policy.

Leave a comment Comments → 57
  1. And it is the best tax policy with a later adjustment to give relief to lower income taxpayers. You know the republicans will try to stop that too.
    Thanks for the letter Carol.
    Now watch the wingnuts, who know nothing about how tax cuts add to the deficit, criticize.

  2. Even Greenspan said that the tax cuts should expire.

  3. iamjimbo says:

    Let the LWN fest begin….

  4. tomwa007 says:

    George Bush Sr. called it Voodoo economics and later used it to get elected. His son used it and we are all paying for the “trickle down” fallacy. The only people who believe in it are either illiterate or wealthy enough to find benefit in it.

  5. nokoolaide says:

    Obviously it is you people who do not understand this tax cut. When it expires exemptions go from $1000.00 back to $500.00. Also, your tax rate will increase. Try reading sometime. It affects all of us, even lemurs.

  6. nokoolaide says:

    Greenspan……………..seriously?

  7. What would Milton Friedman say? He would say that if the cuts expire, the Obomba jobless recovery will continue for longer and could get even worse.

  8. 2 pts for ij. Wasn’t sure anyone understood the initialism.

  9. nokoolaide says:

    So we should remain quiet because you think your cute?

  10. pen_mightier_than_sword says:

    [Milton Friedman has revealed his quintessential pro-income tax and egalitarian position in numerous ways. As in many other spheres, he has functioned not as an opponent of statism and advocate of the free market, but as a technician advising the State on how to be more efficient in going about its evil work. (From the viewpoint of a genuine libertarian, the more inefficient the State’s operations, the better!5) He has opposed tax exemptions and "loopholes" and worked to make the income tax more uniform.]

    From http://www.lewrockwell.com/rothbard/rothbard43.html

  11. pen_mightier_than_sword says:

    [One of Friedman’s most disastrous deeds was the important role he proudly played, during World War II in the Treasury Department, in foisting upon the suffering American public the system of the withholding tax. Before World War II, when income tax rates were far lower than now, there was no withholding system; everyone paid his annual bill in one lump sum, on March 15. It is obvious that under this system, the Internal Revenue Service could never hope to extract the entire annual sum, at current confiscatory rates, from the mass of the working population. The whole ghastly system would have happily broken down long before this. Only the Friedmanite withholding tax has permitted the government to use every employer as an unpaid tax collector, extracting the tax quietly and silently from each paycheck. In many ways, we have Milton Friedman to thank for the present monster Leviathan State in America.]

    From http://www.lewrockwell.com/rothbard/rothbard43.html

  12. pen_mightier_than_sword says:

    What does it take to educate a conservative/tea partier?!

    It’s like trying to convince the Taliban should allow girls to attend school. Or like Barney Frank said, “it’s like talking to the kitchen table”.

    Only a Tea Partier would liken a (half) black man (Obama) and a gay Jew (Barney Frank) to Hitler!

    Milton Friedman promoted an income tax, was against loopholes, was against the Gold standard and favored the Fed controlling monetary policy. Glad to know Tea Partiers now support these things as well.

  13. pen_mightier_than_sword says:

    I just have to say it again, the Tea Partiers a bunch of numbskulls. William F. Buckley, Jr. (the last true intellectual conservative) is rolling over in his grave.

  14. pen_mightier_than_sword says:

    “What’s at stake here? According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years. For the sake of comparison, it took months of hard negotiations to get Congressional approval for a mere $26 billion in desperately needed aid to state and local governments.

    And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade.”
    Paul Krugman in today’s NYT

  15. nokoolaide says:

    Wow………..

  16. Only in America can one party say that the deficit is out of control, but we need to keep borrowing money so the rich can keep their tax cut.

  17. Novelist3 says:

    Afret’s way of thinking is the reason why we’re in this mess in the first place. Blaming “the rich” for the problems of our country, when in reality- “the rich” are the ones who run our buisnesses that sign our paychecks, “the rich” are the ones that fund our startups, “the rich” are the ones that get our economy moving in the first place.
    It’s the GOVERNMENT- that wasteful, disgusting, bloated heaving mass, that does the damage to our nation. It can inhale billions of dollars, only to have them completely evaporate, never moving our economy, never providing a true “job”- only that which can keep its massive bulk afloat. When “the rich” get money, that money is invested or goes back into our economy. When the government gets money, it gets eaten.
    And yet we continually get that disgusting, arrogant canard that those darn “rich” folk just aren’t giving the government enough money- where, if they were squeezed and choked out of just a little bit more of the money they earned, well, everything would just be peachy.

  18. The Republicans voted to limit the tax cut to 10 years because, otherwise, they would have to had found a way to pay for them.

    Now McConnell claims that you don’t have to pay for them because they are pre-existent.

  19. Novelist3 way of thinking is what is really going to bankrupt this county. Lets be clear we are talking about adding 3 trillion dollars more to the deficit to keep this tax cut. If you wanted to try and pay for it by cutting spending then you would have to eliminate ALL domestic spending and most of the pentagon if you wanted to reduce the deficit and keep this tax cut. So do we want to live without a food and drug administration, an EPA much of our defense. That is what it will take to pay for this tax cut and bring down the deficit.

    So folks like Novelist3 love to howl that Obama wants to redistribute wealth but the ironic thing is the Bush tax cut does just that. Only this tax cut redistributes wealth up to those who are already rich. I don’t mind rich people having money and being well off I just don’t think they should have it all.

  20. Sumner401 says:

    What does it take to educate a conservative/tea partier?!

    That is one of the great mysteries of the universe.

    30 years of trickle down failure and people like novelist still think it’s valid and it will someday work, if we just give the top 2% a little bit more, and kiss them where they sit with a bit more meaning, and lose a few more middle class jobs, then, then they will rain down upon us their manna from heaven!
    Bow down to the super rich! Give them what they desire and it will be returned to you 10 fold!

    How does anyone still fall for that?

  21. I wonder how many of the pro-tax commenters here will realize an increase in their taxes if this increase goes through. Judging by the comments I’ve read, none of them will see an increase. But it’s o.k. if the “rich” have their taxes increased. No wonder all of the businesses are moving off shore and so many Ameicans are jobless. The thing about liberals (socialists, commies et.al) is that they see no correlation between high taxes and loss of jobs. I’m still looking for that person who has ever been hired by a poor person to speak up. As for the $26 billion that was given to teachers and other local governments, that was used primarily to bankroll their retirement funds, as if they don’t get more than they deserve already.

  22. Sumner401 says:

    Gee frosty, tell us where all these jobs the tax cuts you want to keep are now?
    10 years we have been waiting for the jobs to appear, where are they?

    This is republican tax policy, they wrote the sunset provision, not the Democrats.
    They did it because they knew it would add over a trillion to the deficit, remember the deficit, it’s that evil scary thing you’ve been told you hate and fear.

    So which is it, you going to have your cake or are you going to eat it?

  23. Sumner, name the poor person who has ever given you a job. Talking about mysteries, the real mystery here is how so many people can drink from the same jug of koolaid. As far as “kissing them where they sit”, that’s exactly what the demokrats have been doing to the unions and minorities in this country and that’s why we’re broke. Sub-prime mortgages to people who can’t even sign their own name? Extending unemploymant beyond 99 weeks to eternity? I have news for the likes of Sumner, Obama’s “stash” is gone. Don’t call 911 when you can’t get chicken McNuggets at 9 A.M. Too much reliance on big brother makes you brain dead, (or liberal).

  24. Gee Sumner, where’s all those jobs that Obama spent over 800 billion for?

  25. After 10 years you would think that those jobs being created by Bush tax cuts would start being created.

    Reality frosty…..try it some time.

  26. For our economy to thrive, money has to flow. As the uber-wealthy accumulate more and more wealth, less and less money circulates, creating recession. That, coupled with our imbalance of trade (we export money) creates further economic stagnation.

    To correct this immediate problem, we need to become less dependent on imported manufactured goods and regain our manufacturing strength. We need to put ourselves back to work, manufacturing those things we’ve lost to outsourcing.

    We, also need to allow the Bush tax cuts expire. Even if it does cost me a bit more in taxes, taxing those who can most afford it will be a stimulant to our economy and be well worth it.

  27. FreeAmerica says:

    The “rich” and “corporations” do NOT pay taxes…. what kind of left wing fool thinks the “tax cuts?” will not be paid for by the common taxpayer?

    It doesn’t take a rocket scientist to figure out how to pay for tax burden?
    A company just raises its prices….as in GAS…the stations price goes up and they don’t eat the raise… they pass the raise.

    The problem is the size of government that requires this money to sustain…. no amount of money will keep up with current spending.

    Tax the rich all you want….see who pays.

  28. FreeAmerica says:

    The great Obama scam….
    I won’t raise taxes on the low income (which don’t pay anyway)
    I’ll raise taxes on the rich so they are the villains and raise your prices.

    Keep taxing corporations and there will be no corporations left to tax.
    A business can only pass so much before they become UN-competitive in the market (free trade..remember) and they will move operations to slave labor, cheap tax countries.

  29. brymarbuch says:

    An interesting article on the trends American incomes of can be found on the Center on Budget and Policy Priorities website based on data from the Congressional Budget Office:
    http://www.cbpp.org/cms/index.cfm?fa=view&id=3220

    The article is titled “Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show”

    Some facts to note:
    The richest 1% of American’s after-tax income has almost quadrupled (a 281% increase) between 1979 and 2007 while the lowest income group saw only a 16% increase in the same period.

    Overall, the nation’s after-tax income has grown 55% since 1979 but the growth has not been shared broadly among the income groups. The top 1% increased their share of the total from 7.5% to 17.1%. In 1979 the bottom 4/5s decreased their share from 57.9% to 48.4%.

  30. FreeAmerica says:

    Palago….. Your entire statement contradicts itself…

    “we need to become less dependent on imported manufactured goods and regain our manufacturing strength”
    “taxing those who can most afford it will be a stimulant to our economy and be well worth it.”

    FA:
    Explain how taxes stimulate our economy?
    And how taxes help us regain our Manufacturing strength?

  31. “we need to become less dependent on imported manufactured goods and regain our manufacturing strength”

    Tariffs.

    “taxing those who can most afford it will be a stimulant to our economy and be well worth it.”

    Government has the ability to put people to work; those who would otherwise have no income during this recession, allowing them purchasing power. Now if we can get back to regulating the influx of imported goods through tariffs, small and large business can compete for this American stimulus. If Americans bought American made products, We wouldn’t have these economic issues.

    “no amount of money will keep up with current spending.” There is an amount, FreeAmerica. If our government stopped spending the whole economy would tank.

    One thing about spending, unless the money leaves our shores, it doesn’t disappear. Money needs to circulate. The more the better.

  32. Based on the expertise shown so far, I think I’ll take the Krugman analysis. Go to any private airport or any marina and tell me that the owners represented by the machines seen there cannot afford a bit more tax and nobody will lose a job over it.

  33. FreeAmerica says:

    Polago,

    Tariffs go two ways and trade wars are started with tariffs… I will agree we need some equality based on the fictitious china currency rating.

    “Government has the ability to put people to work”

    This is the difference between liberal and conservative…
    Government doesn’t create a product to add to the Gross Domestic Product, Government workers are a burden to taxpayers and companies.
    If government cost is what puts America in an uncompetitive market then reducing government cost would be a stimulus for jobs and economy.
    The return rate for reducing taxes far outweighs increasing government burden by “creating work” or spending…however you want to call it.

    You see government as an employer and I see it as a cost.

  34. If tax increases are a good thing, then let’s allow the entire set of tax rate reductions lapse and everyone who got a tax decrease will get a tax increase. Think this is a good idea?

    Everyone who supports tax increases do so on the mistaken belief that someone else’s taxes are going up, but not mine.

    But, the facts are that tax increases will increase unemployment, reduce the amount of taxes collected by the US and extend the recession.

    The economy will not get better until Obama and the other liberal democrats, including Patty Murray, are voted out of office.

    It is time for real change; vote them out.

  35. FreeAmerica says:

    Oh I get it…. you see a man with toys and instantly you think he should pay you more. never thinking for a minute that you paid for the toys when you buy his product.
    Tax him..or yourself.. some more and he will still have toys that you paid for.

  36. FreeAmerica says:

    BigSwingingRichard says:
    Everyone who supports tax increases do so on the mistaken belief that someone else’s taxes are going up, but not mine.

    FA:
    Sums it up very well…..

  37. dewilson says:

    I love how the Conservo-Republicans get all asweat over the notion of “wealth distribution”. This may be news, but every economic system redistributes wealth in some form. Historically, a power elite has controlled the vast majority of wealth while the general population struggles to maintain survival under an oppressive economic/governmental system. Our democracy did a wonderful job of providing an economic system that gave opportunity to all and, under a regulated capitalistic system, distributed wealth in a manner than accrued to almost everyone. During the industrial, robber-baron era, and more recently, under Reaganomics, the corporations gained ascendency in controlling not just the economy but controlling public policy through huge ‘investments’ in the political process. Clearly, the weatlh structure has shifted again to a power elite while the vast majority of Americans struggle to meet basic needs and lack the means to make the kind of descretionary expdentitures that fuel a healthy economy.

    The great hypocrisy is that Conservo-Republicans claim that tax cuts make jobs, yet the Bush tax cuts over the last decade also came with huge declines in jobs. Of course, the Conservo-Republicans also supported policies that encouraged corporations to move jobs overseas and even their headquarters to avoid paying taxes, increasing the deficit even more. Hence we see Wal-Mart with 20 companies in China, reduced benefits to employees, and elimination of competing business that provide living wages.

    Now the Conservo-Republicans rage about “Obama’s deficit” but happily support the extension of tax cuts that would add trillions to the deficit in the coming years.
    Notice that not one of the Republican leaders is able to explain that ‘little’ dichotomy.

  38. It’s called discretionary income and it is over and above what is necessary to live comfortably even by outrageous standards. Nobody’s costs of goods will be affected by tax increases that take away some of that discretionary income. I like the idea of a 50% bracket for incomes above, say, 750K.

  39. aislander says:

    The progressive “economics” expressed in this thread (leaving aside the outright lies, such as Friedman’s having invented income tax withholding…) make sense only if there is a law of nature called The Conservation of Wealth, in which wealth can neither be created or destroyed. Their nostrums ensure that there WILL be plenty of the latter but none of the former…

  40. FreeAmerica says:

    Wealth redistribution by government policy creating jobs for China…
    Sound policy for American citizen?

    Dewilson…
    Are you trying to convince someone that if we send more money to the government in a form of taxes that they should be trusted to reduce deficits or debt?
    Trusting a government to spend wisely is like letting the inmates run the jail…. the only way to control government is to cut off the funding.

    Your idea of cutting deficits is by taxation…no mention of bloated government spending.

  41. FreeAmerica, trying to explain basic economic theory to a liberal is like trying to teach a monkey how to build an airplane. They (the liberals) have never tried to meet a payroll and pay all of the subsidies that go along with creating a job. Most libs have been on the receiving end of someone else’s ingenuity and enterprise.

  42. All of the knashing of teeth and whining about jobs going overseas is laughable. I want any lib to explain how the unions demanding more benefits and salary for their brain-dead members is going to keep jobs here? I want them to explain how increasing taxation on the job creators will result in more jobs? Publico is wringing his hands over some people owning airplanes and boats. Tell me Polago, who built those things? Was it a government employee? You should thank the rich for buying things that employ people instead of complaining about it.

  43. Believe it or not frosty, economic theory includes more than repeating the mantra “taxes bad”.

  44. Perhaps FA and frosty – you should try to explain your economic theories to Alan Greenspan – seeing how he has come out in favor of letting the tax cuts die.

  45. FreeAmerica says:

    BBoy….

    Personally I don’t care if the tax cuts expire… you don’t get it…. my company will make the same amount of money with the burden passed to the consumer.

    The burden is or should be the subject.
    If companies pass the tax burden to the consumer shouldn’t taxpaying citizens demand smaller less intrusive government?
    Or do you want to pay for government bureaucracy and corporate profits?

    Like talking to a wall sometimes… profit is POST tax.

  46. FreeAmerica says:

    BBoy… Maybe you should ask Greenspan about mark to market accounting.

    Bazillions in funny money and we sit here and debate taxes on the rich?

  47. Sumner401 says:

    If tax cuts are so great and so good for the economy, then why did the economy fail as soon as they were passed by reconciliation?

    The failed tax cuts by the failure bush has only added to the deficit and made the rich, richer.
    What does it take for some to see that? It’s right in front of them.
    Instead of grown up discussion we get nothing but the same set of talking points that we have been hearing for years now.
    At least they could come up with something new.

  48. Sumner401 says:

    free, you ‘company’ didn’t get a tax cut and neither did you.

  49. Tariffs- A little late seeing that the Chinese own an increasing level of U.S. debt.
    Rich paying their “fair share”- The costs are either passed down line, the profits would be sheltered or the business moves offshore. When will liberals ever learn that a “fair” solution never guarantees that business remains ( duh, ok I guess) static. The “rich” and / or business owners anticipate contingencies resulting from legislation whether they are multi-national or 250 K / year local employers. Remember; when the U.S. imposed a hefty new tariff on Japanese cycles over 750 cc’s to protect the large displacement domestic cycle industry, the Japanese immediately made fancier cycles at 739 cc’s. DUH…

  50. It’s time for the Bush tax cuts to expire. The damage they did will take years to fix.

  51. FreeAmerica says:

    Obama can’t let them expire without a new law….that would be another promise broken for not raising taxes on those who make less than $250k.

  52. The Bush tax cuts have to expire. That’s the way it was written by Republicans and signed by Bush. But I’m sure that conservatives will spin this into an Obama tax increase.

  53. FreeAmerica says:

    No spin about Polago….
    cept Obama promising no tax increase for those under 250k…
    Blaming Bush for the tax increase could be a spin??

    2% of 70k is $1400 increase to income taxes…. looks like an increase to people making less than 250k to me.

  54. Here is something to think about…kind of off the topic. Obama’s stimulus package is around 750 billion dollars right? Well, how many people live in the US? Around 300 million…so why didn’t he just give everyone 1 million dollars to do whatever we’d like with it? It would have been a lot cheaper, it wouldn’t have put us further in debt…just kind of interesting th think about!

  55. Given that China and other third world countries have taken over our manufacturing, it wouldn’t be a stretch to see most of that wealth end up in these countries, qwert.

    Stimulus in the form of improving our infrastructure, whether it be roads, power, or information, creates opportunities for businesses, small and large, and jobs.

    But, we need to regulate imports. We need to regain control of our economy.

  56. aislander says:

    Polago wrote: “The Bush tax cuts have to expire. That’s the way it was written by Republicans and signed by Bush.”

    No, that’s what was necessary to get Dems to give up their opposition, and allow the cuts to pass. The Republicans weren’t clever enough to bundle the tax cuts into a totally unrelated bill ala the Dems. Wait ’til you see all the tax stuff hidden in health care and financial reform, and it ain’t cuts!

  57. aislander says:

    By the way Polago, have you never heard of Smoot-Hawley and its role in prolonging the great depression? And just how are we going to control imports if the Chinese can crash what remains of our economy at the slightest provocation? We need to reduce our debt, and we can do that only slashing spending and unshackling the actual producers of wealth…

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