Tax Cuts For Thee, Tax Cuts For Me
There is an impasse brewing in Washington over the Bush-era, post-9/11 stimulus made up entirely of income tax cuts.
This is the same stimulus plan that has been in effect throughout the current economic uncertainty, and the recent global economic meltdown that took place, and has done little to make sure wealth trickles down, or to create jobs.
It’s becoming part of the NY-27 race, in particular. Republican Chris Collins paints himself as the small business everyman, and called on Representative Kathy Hochul (D) to vote to extend tax cuts even to the wealthiest Americans. Collins claims millions of small businesses, who aren’t hiring now, would be forced to not hire people (what, like even worser?!) if the Bush tax cuts for the wealthy aren’t extended. Essentially all of the $1 million+ earners in the country are not “small business owners”; only about 2.5% of small businesses would be affected. It would also expend the deficit by another trillion dollars, so it’s what we call “fiscally not particularly conservative”.
In fact, since Reaganomics and trickle down/supply-side economics became de rigeur, wages haven’t stagnated for average Americans – they’e “plummeted”. Wealth hasn’t trickled down to anyone, unless maybe you own a Bentley or yacht dealership.
No, we shouldn’t begrudge the rich their wealth. However they got it, they’re quite entitled to it. By the same token, we need to stop the hagiography about them being “job creators” without whom our civilization would crumble. Ayn Rand isn’t the treasury secretary.
President Obama and the Democrats would like to put an end to the tax cuts to the wealthiest Americans. What does that mean?
What it means is that everyone gets to keep the Bush-era tax cut up to the first $250,000 of annual income – even notable job creators like Paris Hilton and Kim Kardashian. Here’s the average annual tax savings if the middle-income cuts are maintained, but the high-income cuts are abolished:
Still a pretty good deal, right? Anyone else getting the idea that Collins’ argument is more about self-interest than policy? The problem is that many genuine small businesses rely on the middle class to buy their goods and services – directly or indirectly. The best way for that to happen is for people to have money in their pockets and the confidence to spend it. Millionaires never, ever have a problem with either of those factors. As we see above, extending the middle-class tax cuts provide a significant benefit across the income spectrum.
“The problem is that many genuine small businesses rely on the middle
class to buy their goods and services – directly or indirectly. The best
way for that to happen is for people to have money in their pockets and
the confidence to spend it.”
That is the crux of the argument the Democrats need to make. This shouldn’t just be about taxes though, we need a sea change in the way in which compensation for all work is considered in this country. A rising tide should raise all boats, not just the 200′ yachts. If everyone was paid a bit more there would be more money in their pockets for movies, or dinners, or dental work. If only a tiny handful of people are getting more they don’t have to capacity to spread it around.
More opinion no substance – what do you want to see changed in the tax code to make these corrections to these inequities? Just letting the Bush Era tax structure expire will not make that great of a change, so what is it you want to change?
If you click on the link in the first paragraph, you’re taken to an AP story about the current impasse in Congress. The Democrats and Obama are pushing for an extension of the Bush tax rate reductions for everyone up to the first $250,000 of income. The Republicans demand an extension of the Bush tax rate reduction for income in excess of $250,000. That.
Peanuts, the real money is in the capital gains tax. Even if the Bush tax rate was to go away you would go back to Clinton’s 20% LTCG, Bush the 1st put it up to 28% where it belongs.
I do not favor taxing earned income higher, after all it is earned, you may not always like how it is earned, but it is earned, verse passive income. Regardless, this just bumbs the surface, you need to look at deductions for certain items like home mortgages, or business loss, etc. it is far more complicated than just letting these rates expire and clearly much more complicated because our lackluster congress waited to address this just because these rates are set to expire, whereas Mr. Obama could have visited these issues over the past 3+ years, but has not.
Class warfare is not the answer, but a failure to address the issues.
This isn’t class warfare, and calling it that doesn’t make it so. This is a reversion of the highest marginal rate to its Clinton-era levels – a time of intense growth, a strong economy, and budget surpluses. Sure, other things are important, capital gains tax among them, but this article is about the topic it’s about – not the one you want it to be about.
Your article is about taxes, rates and what or whom should be taxed, not what I want it to be about. You wrote it and published it as is don’t try to limit it to your needs now. The issue, if you felt the need to look into it a little deeper, is about a failure to look at not just going back to what it was during Clinton, but look at the overall code and what behavior we want to reward or punish.
It is about looking at the entire tax code and determine what is the good bad and ugly.
You suffer from what the majority of the contributors for this paper suffer from, the rich all owe us everything and should pay for everything, forget the entire picture and that we have 50% of the population not paying a dime in “income” tax, but that the only problem lies in the higher earning class, that is class warfare and this paper contributes to it every day.
As I have said before, everything is relative, you make x so everyone below you pays too little, and the guys making more than x are not paying their fair share, right?
What articles like this do is simply tell everyone they are not responsible for their share, but it is the guy above you who is responsible. Get mad at them for not paying it, and that isn’t invoking class warfare?!?!?!? (Kim Kardashian and Paris Hilton references too?) Come one – own what you write.
A little meat on the bone and less snark will make this a more compelling article.
Your reply was about to start making some interesting points about the value of certain deductions and other tax policies (a conversation I would like to have), but then it degenerated into typical right wing strawman bullshit. “You people think the rich should pay for everything”, even though no one ever said that.
If you want to argue that certain policies, such as the home owner deduction or the earned income credit, are useless or counter-productive, I am all ears. But please spare me the fucking crying about how the rich are being somehow victimized or are the target of “class warfare”. Every single statistic in recent history conclusively proves that the a shrinking minority of wealthy people are taking a growing piece of this country’s wealth.
The question you’re avoiding – is this a trend that we wish to continue?
I am not right wing so therefore my bullshit is not from that pile, I am a tax guy though and I would be happy to discuss tax specific issues, my point if you reread my post is that the above AB post is nothing but BS and class warfare mongering. There is no meat on the bone, not one reason to fix any particular tax code social engineering aspect.
Also, if you reread I didn’t say cry for the rich, I said stop thinking they need to carry the burden to alleviate everyone else of their responsibility. It is counterproductive, tax them too but get everyone in on the deal.
Your eye for detail is weak. But as usual anyone who doesn’t talk the Artvoice line or disagrees with a witty post is automatically a right wing nut, right?
The “trickle down” aspect of the Bush tax cut scheme have always been elusive to quantify. The theory is if you take away the tax burden of the upper income taxpayer classes, what will follow is a veritable bonanza of jobs producing investment and everyone goes home happy, including the U.S. Treasury, which enjoys increased revenue arising out of that growth. That groundswell clearly has yet to occur and the defenders now seem to have taken the position, “once giveth, thou shall not taketh away.” Like alcohol and tobacco, it’s hard to quit.
If the intent of those tax cuts are to create jobs, I propose a return to the method employed by the Investment Tax Credit [ITC] which goes back to the Kennedy administration. Companies were granted an outright credit – a net reduction in taxes payable – if they made investments in plant, property and equipment. All that was required was the documentation of those acquisitions, which accompanied their tax filings.
It strikes me patently simple that if the goal is job creation – as those buffoons in Congress claim – all that would be required is the similar documentation to claim the credit, which I’ll call the Employment Tax Credit [ETC.]
I know it would ace out Paris Hilton and the Kardashians but we’re talking about the efficent application of productive capital here.