Do you supoort extending Bush Tax Cuts

[sgreger1]

Red-district Democrats are pressuring Speaker Nancy Pelosi to extend Bush-era income tax rates for all brackets, revealing a high-stakes rift between the party's vulnerable moderates and its safe liberals as the issue increasingly dominates the national debate.

POLITICO has obtained a draft of a letter from rank-and-file lawmakers to Pelosi and Majority Leader Steny Hoyer urging them not to let tax rates rise for Americans at the highest income levels.



"We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions," the House members wrote in a letter that was being circulated for signatures on Friday and is expected to be delivered on Monday or Tuesday.

Reps. Jim Matheson of Utah, Glenn Nye of Virginia, Melissa Bean of Illinois and Gary Peters of Michigan drafted the letter and are working to gather support, mostly from the moderate Blue Dog and New Democrat coalitions, for at least a temporary extension of the rates for top income earners as well as those in the lower brackets.

Pelosi, who rose to power as a leader of the Congressional Progressive Caucus, is her party's chief advocate for hiking tax rates for folks in the top two income brackets, while freezing them for couples earning $250,000 or less.

The situation may be lose-lose-lose for Democrats. If they raise taxes on higher-income Americans, they risk alienating moderate voters and campaign contributors in closely contested races in Republican-leaning districts. If they freeze the rates for everyone, they risk depressing an already deflated liberal base in districts across the country — including those represented by centrist Democrats. And, if they kick the can down the road with a one- or two-year extension for the top earners, President Barack Obama will have to wrestle with the issue again heading into his 2012 reelection campaign.

But the battle represents a risk for Republicans, too. They can't afford to be pegged as promoting the interests of the wealthy at the cost of the middle class amid a continued economic malaise.

Democratic Congressional Campaign Committee Chairman Chris Van Hollen and Obama have accused Republicans of holding the middle class "hostage" because they want all of the tax rates extended.

On Sunday, House Minority Leader John Boehner sought to counter that thrust by telling CBS's Bob Schieffer that he would not vote against an extension of just the set of rates for the lower and middle classes — even as he works to include the upper incomes in the final version of legislation.

"If the only option I have is to vote for those at 250 and below, of course I'm going to do that. But I'm going to do everything I can to fight to make sure that we extend the current tax rates for all Americans," Boehner said.

His remarks touched off a fierce, campaign-style partisan exchange with the White House.

^^^^

What do you think they should do? I kinda gotta side with the democrats on this one. I'm not opposed to continuing the Bush tax cuts for the middle class but letting the tax cuts for the rich expire. Usually I would say put more money in the hands of the rich so they can grow jobs, but right now the rich are holding onto their money like everyone else, so it wouldn't really help anything to continue giving them a break. Raising it a couple percentage poitns ain't gonna even dent their pockets.

[raptor]

I agree with your assertion, except I never subscribed to any trickle-down theory which I believe is complete BS.

[texastorm]

I am always for tax cuts and binding the hands of officials on government waste and overspending. I want accountability. This tax cut was a patch on a problem, but the problem leaked around the patch anyway. Its like that story of the boy who stuck his finger in the leak in the dike, only to have another leak appear next to it and so on. Talking about these stupid tax cuts only diverts from the real issues.

[sgreger1]

I agree with your assertion, except I never subscribed to any trickle-down theory which I believe is complete BS.

Well, I mean what do you not subscribe to? Are the poor people the ones who set up corporations and open businesses to create jobs? Do poor people spend more money than rich people? And we know that spending money is what keeps the economy circulating, so this is a good thing, no? Not that I think we should cater to them, but I can't deny that rich people do contribute to the economy. My thing is that rich people are rich for a reason, they know how money work and how to get it. They will always have money, therefore we shouldn't be subsidizing their money getting efforts via government.


I still think a flat tax would be more appropriate, our tax structure is too crazy and complicated right now. If we are all equal, we should all be paying an equal amount of tax. And with a flat tax, rich people would not be able to get out of it like they do today.

[texastorm]

Well, I mean what do you not subscribe to? Are the poor people the ones who set up corporations and open businesses to create jobs? Do poor people spend more money than rich people? And we know that spending money is what keeps the economy circulating, so this is a good thing, no? Not that I think we should cater to them, but I can't deny that rich people do contribute to the economy. My thing is that rich people are rich for a reason, they know how money work and how to get it. They will always have money, therefore we shouldn't be subsidizing their money getting efforts via government.


I still think a flat tax would be more appropriate, our tax structure is too crazy and complicated right now. If we are all equal, we should all be paying an equal amount of tax. And with a flat tax, rich people would not be able to get out of it like they do today.

While I see some merits to a flat tax and no deductions, the poor would be hit the hardest. I mean 15% of 10 million isn't really the same as 15% of 12,000. So where do you draw this imaginary poor line? What is fair, do kids count, etc. It still too complex.

I have always been in favor of a national sales tax as long as we abolish the present IRS system. The rich buy more things, so a sales tax on everything makes it fair. If your poor you can apply for rebates etc. Make it easy for the rich to pay, and harder for the poor to game the system. Believe me I am not going to be buying any million dollar yachts or 500k Rolls this year, and if you are wealthy, 10% is not going to stop you from buying those items. But dont just tax luxury items, tax everything, every sale, every service... the more money you have the more you are likely to spend.

Sure businesses would have to bear the brunt of this new filing system, but believe me I cannot imagine that a flat 10% of gross is going to be hard to file compared to our present day taxation strategy.

[ratcheer]

Yes, I support extending the tax cuts, I even believe it is crucial to do so. The economy is in the pits, now. If they eliminate the tax cuts, it may be the death blow.

Tim

[Darwin]

Once you change tax rates and they gradually become structural in the economy then changing them either way will have usually poor results. The problem for the past decade at least is that, with insufficient obstruction from Republicans, Democrats have gone on a wild spending spree that ignored bugetary considerations entirely. Spending increases no matter what the tax situation is. Economy in the toilet--spend money to "stimulate" it. Economy on the ups--more programs spending more money. Rinse and repeat. To paraphrase the old saw, a trillion here, a trillion there and pretty soon you're talking real money.

[lxskllr]

I don't know that I go along with the idea that the rich should be taxed more because they're rich. There's reasonable arguments for that model, but it seems to me it just punishes success. I like the idea of some kind of flat tax, or perhaps a VAT. Flat tax hurts the poor more, but everybody knows what they're dealing with. Everyone can't be rich, and the slack can get taken up by churches and private groups. A VAT would negatively affect the economy by reducing spending. Over the long term, I think we'd be better for it. Unrestrained capitalism is unsustainable, so cutting into spending will have short term negative consequences, but the country will be better as a whole.

[sgreger1]

While I see some merits to a flat tax and no deductions, the poor would be hit the hardest. I mean 15% of 10 million isn't really the same as 15% of 12,000. So where do you draw this imaginary poor line? What is fair, do kids count, etc. It still too complex.

I have always been in favor of a national sales tax as long as we abolish the present IRS system. The rich buy more things, so a sales tax on everything makes it fair. If your poor you can apply for rebates etc. Make it easy for the rich to pay, and harder for the poor to game the system. Believe me I am not going to be buying any million dollar yachts or 500k Rolls this year, and if you are wealthy, 10% is not going to stop you from buying those items. But dont just tax luxury items, tax everything, every sale, every service... the more money you have the more you are likely to spend.

Sure businesses would have to bear the brunt of this new filing system, but believe me I cannot imagine that a flat 10% of gross is going to be hard to file compared to our present day taxation strategy.

Yah, a flat sales tax would work great. The problem with raising taxes on the rich is that they are very good at avoiding taxes. You could raise it to 90% and most of them would still avoid the majority of it by moving their money around. If you collected the tax from sales tax, than there is no way to get around it. If you buy shit (like rich people do), you will be forced to pay the tax. This way, no one can avoid paying the tax or game the system. If we just charged everyone a %15 tax on all items, I bet the revenue would go up. I don't oppose to allowing the poor to have deductions which they can recieve at the end of the year or something.


It just seems kind of unfair to ask that things not be equal, it should be an equal tax rate I think. Why do successfull people by default owe more money? It seems like a tax on our brightest minds.

[sgreger1]

I don't know that I go along with the idea that the rich should be taxed more because they're rich. There's reasonable arguments for that model, but it seems to me it just punishes success. I like the idea of some kind of flat tax, or perhaps a VAT. Flat tax hurts the poor more, but everybody knows what they're dealing with. Everyone can't be rich, and the slack can get taken up by churches and private groups. A VAT would negatively affect the economy by reducing spending. Over the long term, I think we'd be better for it. Unrestrained capitalism is unsustainable, so cutting into spending will have short term negative consequences, but the country will be better as a whole.

Exactly, a REAL recovery strategy will focus on long term success and stability, as opposed to making the baance sheets look good untill the administration changes next election. That's what corporations do, they try to make it look good for their next annual report. We dont' need just short term recovery, we need long term planning and strategy. Even fi it hruts us now, it will be better in the long run. Short term knee-jerk reactions to things is what caused this financial mess. We spend all of our time putting out fires instead of fireproofing things so they don't get set aflame in the future.

[raptor]

A flat tax would be fine if usury was abolished.

[lxskllr]

Yah, a flat sales tax would work great. The problem with raising taxes on the rich is that they are very good at avoiding taxes. You could raise it to 90% and most of them would still avoid the majority of it by moving their money around.

I don't know. I think a flat tax would work well for closing loopholes. You give me(government) 15% of all the money you make. You make $100, you give me $15. No deductions, no rebates, no nothing. 15% all the time, every time.

[Darwin]

If by usury you mean charging interest on loans then that's not going to happen. A bank is not a charity. If you mean bad behavior by lending institutions then there are encyclopedias of laws and regulations that address those situations.

A progressive sales tax seems more politically practical. Food and medical expenses should be exempt- period. For items up to say a thousand dollars a tax of 5% seems palatable. Items costing over a thousand and up to ten thousand bump it to 10%. Items from 10k to 50K, about the limit for a vehicle the middle class buys, bump the rate to 15%. Any item selling for 50-100K, except for housing, should be taxed at say 25 %. Items selling for 100-500k, except for housing, would get a tax rate of 35%. Items over 500k might be taxed at a 45-50% rate. Housing over 500K would be subject to a 10% sales tax rate. This would be a very simple solution and no one could claim that the rich are not paying their "fair share" under such a system. The rich spend a lot of money, otherwise what is the point of being rich, so they would pay more taxes regardless but high sales tax rates would only be on very high ticket items which sell in small volumes and so would affect the employment picture the least. The hardest thing of all to manage this in a legislative setting is that everybody and his dog's cousin and grandmother is going to clamor for exemptions from the tax. The political pressure for a whacking pile of special carve-outs will be tremendous.

There would be a lot of jockeying by retailers to sell product just under one of these limits but that doesn't seem like a deal breaker. The percentages would undoubtedly be needed to be adjusted for revenue neutrality but the progressive nature of such a scheme might defuse some of the objections of those who say it would be hardest on the poor.

[texastorm]

The reason the sales tax angle is a better approach is simply businesses already have a large paperwork burden, but lets say if a business had to file 15% of its gross, but no longer have to pay in the income taxes for the individuals, the paperwork is lessened. Sure they still have to pay SS taxes for you, but no longer fed taxes. So no real change in the amount of paperwork. However you as the employee now do... nothing. You get between 15 and 35% more money each payday, and though the cost of everything just went up, you feel better about spending more money because you feel like your making more.

In a flat tax scenario, I would be mad if I made 10k in a year and had to give up 1500. This is a hardship on the poor and requires a system be put in place to buffer them, leading to more legislation and ultimately cheating. But a sales tax on everything but say rent or mortgage and food/baby items you would barely notice. Would it make much difference if your 40 dollar VCR was now 45 dollars? Would it make a difference if your toaster was now 11.50 instead of 10.00? Plus your getting the benefit of an extra 15% or more on each paycheck. So if you were poor and your weekly takehome was 200, now its 230... So that toaster and VCR are easily covered. I believe that for the really poor (those that cant afford a VCR) we could offer up rebates, similar to earned income has been in the past a big payday for those making lots of new babies that cant afford them. We can still support the stupid.

But the rich who likely have found many ways of paying much less than the 50% we somehow think they should pay, now would actually have to pay. If they want that new Rolls Royce, they pay, new boat, they pay, kitchen remodel.. yep they pay.

Look at your last checkstub and tell me you would not feel a lot better if that portion withheld for federal taxes (not the fica) was in your pocket? I know I sure would, even if the cost of the goods I buy went up 10-20%. I would rather choose when and where I get taxed.

[raptor]

The rich spend a lot of money, otherwise what is the point of being rich

To get more rich, which is the universal goal of everyone in Capitalism.

I did mean usury as charging interest, and by eliminating that a flat tax would be appropriate. Why? Under a flat tax there is no check against exponential growth of those with large sums of money earning interest. More money begets more money, just as the working poor have very little savings that earn inconsequential interest. A flat tax would be a surefire way to quickly widen the disparity between the different classes.

And the whole rich spending more argument is bunk. Sure, some idiots with salaries might spend extravagantly, but there is nothing which makes that a rule for being rich. If I had a 7-digit salary I certainly wouldn't feel pressured to blow all my extra earnings, and a lot of other smart rich people agree. And I wouldn't bitch about the tax brackets because I'd be earning more than enough to live comfortably and save up for my children's college and retirement. But that's just me, lots of people are considerably more greedy than I am.