The big fight brewing in Washington at the moment is whether or not and for whom to extend the Bush Tax cuts. The Obama plan calls for extending them for everyone except the top two percent. Republican plan include extending them for everyone, extending them for the top two percent only, and extending them for nobody, if the rich don’t get them too. The Obama plan is the best one. This is why.
This week, the Congressional Joint Committee on Taxation released an analysis of what would happen to the tax code if the Republican proposal to extend all of the Bush tax cuts were adopted. The tax cuts are scheduled to expire at the end of the year, and the Obama administration has proposed renewing only those for the lower- and middle-class.
“You will find Republicans resisting very strongly any bill that allows taxes to be raised on any segment of Americans today,” said Sen. Jon Kyl (R-AZ), while Rep. Mike Pence (R-IN) has said the House GOP will throw “everything we’ve got” into preserving the tax cuts for the wealthy. And too many Democrats — like Sens. Evan Bayh (D-IN) and Kent Conrad (D-ND) — have been cowed into expressing a willingness to extend the tax cuts temporarily for a year or two.
According to the JCT analysis, extending the cuts for the wealthy — which affect two percent of the population — for just one year will cost $36 billion. Obama’s plan, meanwhile, really focuses the tax increase at the very top of the income scale:
The biggest burden would fall on the 608,000 taxpayers who make between $500,000 and $1 million and the 315,000 who earn more than $1 million; the first group would pay $6.5 billion more, or an average of almost $10,000, and the second group would owe $31 billion more, or almost $100,000 on average, the analysis said.
That may seem like a lot, but even under Obama’s plan, the very rich will be paying less in taxes than they did in 2001, since they would be paying a lower marginal rate on their first $250,000 in income. As the New York Times noted, “taxpayers with income of more than $1 million for 2011 would still receive on average a tax cut of about $6,300 compared with what they would have paid under rates in effect until 2001.” For those earning between $250,000 and $500,000, meanwhile, the increase is “relatively low,” said Roberton Williams, an economist with the Urban Institute. “It’s less than 1 percent.”
So Obama’s plan has taxpayers still paying less than they were at the beginning of the decade, while adding $36 billion less to the deficit than the GOP’s preferred policy outcome… [emphasis original]
Inserted from <Think Progress>
Graphic Credit: Ezra Klien
Rachel Maddow and economist Austin Goolsby discuss the above chart and the tax cuts.
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From what I understand, tax cuts to the wealthiest Americans only generate fifty cents in economic activity for every tax dollar lost to the government. Those funds would be far more productively invested in infrastructure spending.
Republican claims that ending the tax cuts for the rich will cost US jobs is a lie. The rich aren’t investing their money in US production. They are investing it in Wall Street speculation and production in the Asian wage-slave markets. Republicans want the tax cuts for the rich to continue, because the rich are the only people Republicans truly represent. They are the party of No Millionaire Left Behind!
19 Responses to “The Truth About Those Tax Cuts”
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As much as I do not like paying taxes the cuts should be allowed to expire for all. It will take a few hundred from the poorest workers who can least afford it. But regardless of who dug this damn pit we are in it is going to take everyone s dollars to fill it. It may have made the wealthy wealthier having two unfunded wars, a decades worth of tax cuts also unfunded enriching the richer even more still, but it is America’s hole and last time I looked that top tier of wealth were not the only Americans. There were plenty of middle class fools out there screaming for Iraqi blood. Refund the treasury without printing more money, everyone tighten up the belt some more and I personally think that because most of the middle class has lost ground in the past decade the rates they will pay will still be far less than them who engineered this debacle called the American economy. Though the Demo’s in congress have some pretty wealthy folks among them, the repugs are trying to preserve their own personal fortunes as well as that of their masters.
Either that or let the government declare insolvency and all the foreign governments we have spent billions in defending for the past 100 years and now hold our debt can place that paper certificate showing that debt on the wall alongside the bill we send them for having us defend them while they destroyed our manufacturing base by not allowing their currencies to rise and fall with the FREE market and forcing their slave labor made shit on us because the wealthiest two percent found their profits in selling our jobs.
When goods and services become so devalued in this country that a loaf of bread sells for a nickel and a car for a few thousand then we will be able to afford to compete by making our labor rates cheaper. Until the playing field is evened out we will never again be able to afford to be the worlds consumer half of the economic equation. Put the unemployed, everyone from the engineers to the laborer to work at a reduced wage rebuilding and building a new infrastructure. In other words keep our money here and fund our own debt and let the rest of the nations go eat their oil and lead laden goods with each other.
Mark, I can’t say I disagree with you. Part of me feels great anger over raising taxes on the poor and middle classes to pay for the Republican theft of our standard of living. But I’d rather have my taxes go up than have those of the rich stay down. I’m also all for WPA and CCC like projects to rebuild our infrastructure and favor import taxes on goods subsisized by foreign gonernments, from countries that refuse US imports, and from countries that maintain undervaluesd currencies.
My comment is unnecessary in that I agree with what TMW just wrote. I just like reminding everyone that I have no problem with my taxes being raised so my government can provide the services we need and lift our Nation out of debt.
Truth, please see my reply to Mark.
I happen to like The Administrations proposal. While there might be a feeling of we’re all in this together, we all didn’t suffer together. If anything the rich got richer. Le’s give regular Joe’s a break. Five bucks to someone poor means something. He spends it, thus reinvesting in our economy. The rich just sock it away, or like what was said,invest in Wall street or foreign interest. It’s the middle and less who has to worry about money. The wealthy only worry about how not to pay taxes. Brief story, Back 30 years ago I knew a Man who then was worth around a 100million dollars. He was so worried about not having to pay any tax he hid money in anyway he could. He didn’t want to part with a dime. He would brag, on how he paid less in taxes then his employees.
Employees that got paid .25 more than minimum wage.
Tim, I have no doubt the man was a Republican.
TomCat,
The Jack is back, and he says thanks for this great post. The Bush tax cuts for the rich were only reverse Robin Hoodism, and they did absolutely nothing to create new high-paying jobs here, as we were told they would. Instead, big business sent plants and millions of American jobs overseas to cheap foreign labor markets, while freezing or lowering workers’ wage rates here and vastly increasing CEOs salaries and perks. The Republican plan and its argument for extending those unneeded tax cuts for the rich are insane.
Great minds think alike, TomCat. My latest post (from last night) is titled “Fred Thompson Is Lying To You!” and it slams him and refutes every one of the Republican talking point lies he tells about the Bush tax cuts point by point. TAX THE RICH@ FEED THE POOR! PUT PEOPLE TO WORK AND MODERNIZE OUR INFRASTRUCTURE!
Jack is back is great news!! 😀 YVW!!
I look forward to reading it.!
The ride on free lunch government, is over. We have a 13 trillion dollar debt, because we did not pay as we spent. That was the Republican strategy of “No New Taxes” to win elections and Americans went for it.
We not only need to end tax cuts, we need to raise taxes to pay off the debt we all built. Only 30 years to build that debt. This surely is the resopnsibility of the boomers who voted for “no new taxes” since Reagan.
Who are we to leave this country worse off than it was left to us? And why, because we are spoiled, selfish brats, that were given everything by our parents? The old saying applies to this generation, “You don’t know the value of a dollar, or how to be responsible with your money.”
Tom, I agree idealy, but not in practice. The more money the poor and middle classes have to spend the quicher our economy will recover. Deficit hawking right now virtually guarantees a long term recession or worse.
People, people, let’s get a grip. It’s essentially a tax raise of 4%!!!!!!!!!!!!!!!!!!!!!!! Let’s not get all our undies in a bunch. And the Repubs have no rational explanation that the Bush tax cuts improved the economy – they just say “because” and the sheeple buy it. Well, look around kiddies, this aint fun for anyone.
Right on, Lisa!
So much for Reagonomics. I never much liked the idea of rich folks’ excrement trickling down over my head anyway.
The exrement gushs down, Benji. The money gushes up.
I am one of those strange folk who also think the tax cuts need to expire for everyone. I also think we need to be raising, not lowering taxes. There are no free rides. We want more but are unwilling to pay for it. I would like to be able to walk into an electronics store and buy anything I want but not have to pay for it. How nice would that be?!
Mike, I’d rather see the tax cuts expire for everyone than to keep it for the rich. But it would be far more fair to fund the continuation for the 98% by increasing the taxes for the 2%, given the huge increse in wealth they derived from No Millionaire Left Behind.
The economic elite and their Republican Party want nothing short of neo-feudalism, where they are the lords and the rest of us are serfs.
Good analogy, Dave.