by Tina Grazier
The President has done the right thing in agreeing with Republicans in the House of Representatives to continue Bush tax policy for a year. His agreement represents putting his foot on the correct path toward empowering the American people. The agreement contains several proposals in addition to the tax policy extensions:
1. Extends unemployment insurance for 13 months. Two million workers in December, and 7 million over the next year, would have lost benefits otherwise.
2. Provides a one-year, 2 percentage point reduction in employees’ Social Security payroll taxes, lowering the rate from 6.2% to 4.2%, at a cost of $120 billion.
3. Keeps the Earned Income Tax Credit and American Opportunity Tax Credit increases from last year’s economic stimulus law, for another $40 billion in tax cuts for families and students.
4. Allows business to write off 100% of their capital purchases next year.
5. Sets the estate tax at 35% for two years, with a $5 million exemption on assets that’s higher than last year’s $3.5 million. The rate came down under Bush’s policy from 55% before 2001 to 45% in 2009 before expiring this year. It was set to return at 55% next year.
6. Protects millions of taxpayers from seeing their taxes raised in 2010 and 2011 under the Alternative Minimum Tax.
Response to the deal varies up and down across political lines. Some Republicans are balking. Many Democrats are angry and some in the Senate vow to scuttle the deal. The President wasn’t smiling when he made his remarks and there’s good reason for him to be unhappy. During the election he indicated his intentions to make the wealthy pay more: “I’m not bashful about it, the wealthy will pay more.” In fact Obama has spent years criticizing the Bush tax policy as, “tax cuts for millionaires and billionaires” insisting that the Bush tax cuts did nothing for the middle and lower classes. That was a lie, of course, but it did follow the class envy line used by Democrats to win votes.
The effectiveness of this Lame Duck deal, if it makes it through the Senate, will be decided in the future. Creating a robust economy, getting Americans back to work, and paying down the massive debt will require much, much more from the new legislature.
The American people will continue to trust but varify…pitch forks at the ready!
New Wrinkle: The Washington Examiner explains why the President was forced to make the deal instead of raising taxes on the wealthy through “reconciliation” in the Senate:
To pass a measure by reconciliation, the Senate must pass a budget that contains what are called reconciliation instructions. But this year, as they faced an angry electorate and grim prospects in the midterm elections, the Democratic leadership made the specific decision not to pass a budget. Revealing their spending priorities to voters already unhappy with out-of-control federal expenditures was just too risky, so Sen. Harry Reid and party leaders punted, even though passing a budget is one of Congress’ core constitutional responsibilities.
With no budget, there could be no reconciliation. And no possibility of using reconciliation to extend the Bush tax cuts — which were originally passed with bipartisan support — on the Democrats’ terms. Shirking your constitutional responsibilities can have consequences.
Playing politics came back to BITE!
Not for comments, just a tip for a possible post
National Review NROcorner
So Obama Actually Thinks He’s Done a Good Job of Keeping His Promises.: Obama, today: Take a tally, look… http://bit.ly/dHStvZ
You are all, still, so extravagantly clueless !!!
What, wherefrom, exactly it the cash to come for these continued unemployment bensfits?
Come on! From where? You irredeemable morons!
Libby, you ask where’s the cash to come from then? Well from an irredeemable moron’s perspective it comes from us and that means in order to protect it and use it wisely we should be reeling in government and curtailing extravagant expenditures for all but the most essential purposes. And they better be only for those things authorized by the Constitution. You see Libby, government has a very large budget, it’s almost beyond comprehension its so large. Do you have any idea what it is? I do, in 2009 it was $2,105bn and unfortunately we spent $3,518bn. The more we give the monster the more it spends. THIS MUST STOP!
Now a smart girl like yerself must be able to noodle this one:
Much of our tax money was spent unwisely for bailouts for Wall Street and even on foreign banks that didn’t deserve it.
The waste, fraud and abuse by the feds during this global recession has been rampant. It has provided too many easy opportunities for looting the US treasury in the name of crisis. In truth the looters only exacerbated the crisis and prolonged our recovery and WE’RE MAD!!!
The examples of such looting are almost endless, we’ve seen a parade of looters names in the news for the last two years. We must starve the beast and that means we quit feeding it too much of our tax money. We need to shrink this fat monstert by working off the excess poundage.
Speaking of work, (here’s another gimmee that isn’t working) if you pay people not to work that’s what they’re going to do. They’ve had two years to get a job and now we’re giving them yet another year? Who’s the moron Libby? Me who wants to put an end to the waste, fraud and abuse encountered by government overspending or you who wants to raises taxes to feed the beast even more? I hate to be so blunt with you Libby, but you had it comin…yes, you did.
Libs: “What, wherefrom, exactly it the cash to come for these continued unemployment bensfits?”
Gee, I dunno, Obamas stash? Tree behind the WH? Printing press in the basement? Since when have you cared about where the money comes from?
As we have stated on many occassions…it all comes from the same place! It comes from the place that funded those loans to people who couldn’t afford a house. It comes from the place that the money for welfare comes from…the same place that money for student loans and food stamps and education and defense of the nation comes from…the same place that cash for the behemoth bureaucracy in DC comes from…we working shlubs. (When we have jobs and when our businesses are thriving!)
ALL OF THE MONEY comes from those who risk, save, invest and work! If you punish them the MONEY stops flowing…if you strangle them, it DRIES UP!!! (along with the jobs)
YOU are the type that thinks you can crap all over those who produce the wealth and still have plenty of cash flow for all of the programs and give aways…YOU ARE WRONG! The philosophy you stand behind is an utter failure for just that reason! Big government is an inefficient sink hole. It isd unresponsive except when used to further and enlarge itself.
The party’s over, babe! Do you get it now? The dawn has come and it’s time to face the music in the harsh reality of the bright morning light. We need to nurture savings, investment, and confidence in the people so that the cash will flow again…and we need to STRANGLE THE BEAST, BIG GOVERNMENT, and learn to once again RELY ON OURSELVES and EACH OTHER…protected by the Constitutiona and supported by our ownefforts, private property rights, and the rule of law!
Jack: “Speaking of work, (here’s another gimmee that isn’t working) if you pay people not to work that’s what they’re going to do. They’ve had two years to get a job and now we’re giving them yet another year?”
Jack, maybe you haven’t noticed, but there is a slight unemployment crisis going on in our country right now. Last I checked it was about 9% in the U.S. and 12% in California, which I think is the worst in the country if I’m not mistaken. This is one of the worst symptoms of our current economic recession, and it isn’t caused by people being lazy enough that they expect to be “paid not to work.” These people are looking for jobs, the problem is they’re just not out there. Americans are hard-working people; yes, even the ones collecting unemployment checks. These checks aren’t that much and the people who get them have plenty of incentive to go back to work. They’re trying. But they need more help. Maybe you’ve never been in such a situation, but hopefully you can try to imagine it.
Besides, it’s not just about helping individual people, it’s about helping the economy. The Congressional Budget Office strongly advocates extending unemployment benefits because they are stimulative to the economy, and many leading economists agree. They also have urged against continuing the tax cuts for the top 1% of earners, arguing that this will only increase the deficit, but unfortunately the Republicans in Congress didn’t listen because it contradicts the sanctity of the “trickle-down” narrative. Now I believe “trickle down” can work sometimes, but Republicans have become ideologues who take Reaganomics as some kind of holy writ that means the rich should always get breaks and the poor should always get a kick in the pants. (Some Democrats provide a similarly flawed counterpart in thinking that big spending is always the answer, but it’s a notion that isn’t considered as popular or as unambiguous as Reaganomics is among conservatives.) Notice how much of the debate about extending the tax cuts hasn’t been whether or not it will help the economy, but whether or not it’s “fair” to “punish” the rich. The Republicans have framed this a moral issue, rather than an economic one, and as always the “liberal” MSM have let the conservative narrative dominate.
As a non-ideologue, I’m fairly optimistic about Obama’s compromise. If we have to let the top 1% keep the tax cuts that neither they nor the economy need, in order to give the unemployed but job-seeking everyman a helping hand in this punishing economic climate, then so be it.
Chris: “The Congressional Budget Office strongly advocates extending unemployment benefits because they are stimulative to the economy, and many leading economists agree. They also have urged against continuing the tax cuts for the top 1% of earners, arguing that this will only increase the deficit…”
I don’t know within what context the CBO made these comments. People spending money for rent or house/car/ insurance payments and food (unemployment covers little else) is only slightly stimulative to the economy. Also those economists that are against continuing the tax cuts mistakenly assume that people don’t alter their plans when taxes are raised. It has been proven time and again that taxing at lower rates encourages activity which enlarges the tax base and therefore results in more revenue flowing to government.
“…but Republicans have become ideologues who take Reaganomics as some kind of holy writ that means the rich should always get breaks and the poor should always get a kick in the pants.”
Sorry Chris, but this is liberal rhetoric. Reaganomics embraced a policy that was also used by John F. Kennedy…a Democrat in case you were unaware. In fact Reagan was a Democrat when JFK was president…he said he didn’t leave the Dem Party…it left him. Socialists have hijacked the party and their rhetoric reflects that change.
“Some Democrats provide a similarly flawed counterpart in thinking that big spending is always the answer, but it’s a notion that isn’t considered as popular or as unambiguous as Reaganomics is among conservatives.”
Unambiguous? How about it just does not work and is, in reality, anti-constitution:
The federal government has been overstepping for decades and the redistribution policies have led to the current mess!
“Notice how much of the debate about extending the tax cuts hasn’t been whether or not it will help the economy, but whether or not it’s “fair” to “punish” the rich.
Punishing the rich IS ALSO punishing anyone who wants to work since the money that is used to make business work and grow comes from the reinvestment of profits and dividends that fund business! There is also the cost of doing business…when our competitors have both a tax advantage and an employment cost advantage it all slogs to a halt!
“…If we have to let the top 1% keep the tax cuts that neither they nor the economy need…”
And you think you’re not an ideologue? Chris…that’s redistribution speak.
The money people have is their property! Property rights is a foundational principle for our nation. Without that right we are no more than serfs or slaves working to support the king or state.
What do you think supplies the wealth to the economy if not people doing business? Think!!!
It is amazing that no one has been talking about the 2 percentage point reduction in employees’ Social Security payroll taxes. Even if it is only two percent it will help the lower income checks more than you can imagine. Just watch next year when you see the gdp rise. That will be a huge morale lifter at the bottom that will start the rising tide. Merry Christmas all!
Chris, sadly for the sake of a creative exchange… your opinion on unemplyment is the typical democrat response. We MUST care for them…we MUST extend the unemployment benefits-there is NO OTHER OPTION – People will DIE IF WE don’t! No…they wont.
The fact there is a crisis in unemployment and jobs points right back at the democrats for idiotic policies that killed jobs and employment. We’ve given people TWO FREAKING YEARS of unemployment already, enough is enough! We’re spending ourselves and the entire nation into a debt we won’t recover from. Suppose this recession lasted five years or ten years… are you going to destroy the nation by paying benefits for all that time?
For gosh sakes Chris, there comes a time when the party is over. When faced with a cut off on unemplyment you would be surprised as how FLEXIBLE and EMPLOYABLE people become. I know people who are drawing unemployment who could have found work, but unemplyment isn’t too bad, so they don’t work. I bet if you tried you could find such people too. But, that is a side anyway, the real issue is saving the nation, reducing the defict and to do that we shouldn’t be doling out 3 years of unemployment benefits, thats off the charts wrong. Our supply of money is NOT limitless.
Are food manufacturers putting heavy pressure on the Federal Government? Is it all about following the money?
Tina: “And you think you’re not an ideologue? Chris…that’s redistribution speak.”
It’s a fact. Letting the tax cuts on the rich expire would have helped the economy and reduced the deficit. Keeping them is going to increase the deficit.
“The money people have is their property! Property rights is a foundational principle for our nation. Without that right we are no more than serfs or slaves working to support the king or state.”
What is your point? And as long as you have representation, your property rights are not being violated by taxation!
Jack: “your opinion on unemplyment is the typical democrat response.”
Yes, that’s because the typical democrat response is based on facts provided by leading economists. Thank you.
“We MUST care for them…we MUST extend the unemployment benefits-there is NO OTHER OPTION – People will DIE IF WE don’t! No…they wont.”
I didn’t say that. What I said was that extending unemployment benefits is what’s best for the economy, based on the most reliable and impartial projections.
“But, that is a side anyway, the real issue is saving the nation, reducing the defict”
If that were the real issue for you, you would be paying more attention to the experts when they claim that extending the tax cuts is only going to grow the deficit. But you haven’t, because the real issue for you is making sure that you adhere to Reaganomics and don’t support anything that Sarah Palin might construe as socialism.
Chris: “It’s a fact.”
What you said, Chris, is that the rich “don’t need” the money (so we should raise their taxes). That is an ideological point of view that you apparently share. It is used to support or justify redistribution policy. This is why I exclaimed, “And you think you’re not an ideologue?”
“Letting the tax cuts on the rich expire would have helped the economy and reduced the deficit. Keeping them is going to increase the deficit.”
Taking money from people who invest in or grow business will not “help” the economy! And how do you know taxing the rich at higher rates would help reduce the deficit? What evidence is there that either raising or lowering taxes ever “reduced” the deficit? You don’t have any evidence because there is NONE! Here is the truth. Spending causes deficits and legislators have created them by spending MORE. That is why we have deficits…because they spend more than they have budgeted. And that is why they are constantly trying to squeeze MORE from the private sector! The crime is that we have let them get away with this for way too many years.
“And as long as you have representation, your property rights are not being violated by taxation!”
The point is to say that legislators should not consider our earnings as their personal piggy bank to be tapped at whatever rate they please for any reason at any time. We the people have an obligation to complain when we think they are overstepping the authority we have granted them. The complaint was about attitude more than the law.
Chris where does the government get it’s money? How do policies that discourage investment and business expansion help the government collect more revenue?
Would you rather take more from a few rich people and continue to have high unemployment or would you rather see everybody employed, business thriving, and revenues flow to the government from the people as they work and provide for their families themselves? That is the real difference we are talking about. YOUR so-called experts don’t seem to care if we have 10% unemployment forever. In fact they have even said that percentage may be the new “normal”. Well sorry but I reject that idea…if you were wise you would too. It’s amazing to me that a smart person, like you, cannot seem to get even the basics.
Keeping these tax rates in place is not enough to spur the economy or help the unemployed. We need to see a more business friendly attitude and policy coming from the WH before you will see much difference. Holding my breath and wondering how important this presidents legacy is to him compared with his own ideology. We’ll see.