WP: Bush, Hill Republicans Agree To Extend Expiring Tax Cuts

[SkinsHokieFan]

Finally a good move in term 2. After the failure of pushing through SSI reform, which I personally may never forgive the GOP or Bush for, this is a step in the right direction

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/02/AR2006050201290.html

Bush, Hill Republicans Agree To Extend Expiring Tax Cuts

Democrats Point to Deficit and Benefits for the Rich

By Jonathan Weisman

Washington Post Staff Writer

Wednesday, May 3, 2006; A05

President Bush and congressional Republicans agreed yesterday on a $70 billion package of tax-cut extensions that they hope will help halt the deterioration of their political fortunes.

The package would extend the 2003 cuts to the tax rates on dividends and capital gains, continue tax breaks for small-business investment and the overseas operations of financial service companies, and slow the expansion of the alternative minimum tax, a parallel income tax system that was enacted to target the rich but is increasingly snaring the middle class.

But the agreement cannot come to a vote until House and Senate negotiators agree on a second piece of legislation containing many of the proposed tax breaks left out of the compromise, according to legislative aides. And the compromise is sure to spark a new round of recriminations from Democrats, who say the Republican Party continues to favor wealthy investors over lower- and middle-income workers, without regard to a budget deficit that is expected to reach $370 billion this year.

For the Republicans, the tax cuts may have to substitute for other measures proposed last week to help consumers cope with gasoline prices. Proposals including a federal gas tax holiday and a $100 rebate have run into a buzz saw of opposition from businesses and oil interests as well as consumers. House Majority Leader John A. Boehner (R-Ohio) dismissed the Senate Republicans' proposed $100 rebate as "insulting," adding that his own constituents considered it "stupid."

With little progress on the energy front, Bush summoned Republican leaders and tax writers to the Oval Office yesterday to force an agreement on a tax bill that has languished since late last year. The president is scheduled to speak today on the economy and taxes, and he implored lawmakers to deliver an agreement he could tout.

"The tax relief that the president advocated and passed is working to do exactly what it was intended to do: get the economy growing and help create jobs. To keep our economy strong and growing, the tax relief needs to be made permanent," White House spokesman Scott McClellan said yesterday. "Particularly at a time when Americans are paying more at the pump, the president believes the last thing they need is for Washington to take more of their hard-earned dollars out of their pockets......."

...... cut, click on link

[Ignatius J.]

tax cuts without spending decreases are just pushing around monopoly money. Given that the tax cuts are going primarily to the rich and will be payed for by future generations, I find this hard to swallow. How come the republican party loves wealth redistribution when it moves money from the future into the hands of the present rich?

[HOF44]

I have to say the capital gains rates are a joke nowadays.

[SkinsHokieFan]

tax cuts without spending decreases are just pushing around monopoly money. Given that the tax cuts are going primarily to the rich and will be payed for by future generations, I find this hard to swallow. How come the republican party loves wealth redistribution when it moves money from the future into the hands of the present rich?

Definitley agree. I do hope to see some more spending cuts, or else we simply are pushing off a tax increase

The Deficit Reduction Act, signed in February made some critical changes to Medicaid and Medicare which will save the federal government billions over the next few years

I hope to see another bill like that signed this winter

[The 12th Commandment]

How come our generation is the first that get's tax cuts during a war. My grandmother was telling me the other day about the hardships that they endured during the WW's to help the country. I wouldn't mind doing the same. Particularly if the war against terror were being waged a little more intelligently. :2cents:

[Larry]

Definitley agree. I do hope to see some more spending cuts, or else we simply are pushing off a tax increase

The Deficit Reduction Act, signed in February made some critical changes to Medicaid and Medicare which will save the federal government billions over the next few years

I hope to see another bill like that signed this winter

And there was much rejoicing.

In the Democratic party.

So, if this bill comess to pass, then what the GOP will have accomplished, in an election year, will be:

• "made some critical changes to Medicaid and Medicare" (which just happen to have the "side effect" of reducing both programs.
  
• Prevent the expiration of a large tax cut, (which was originally passed based on claims that the tax cuts would be fully "paid for" with future, projected, budget surplusses), despite a reality dominated by rapidly increasing defecits, rising interest rates, and inflationary pressure from other, non-government, directions. (Folks, our defecit was pushing us towards inflation before the price of oil went through the roof.)
  
• Extend those same tax cuts into new areas, targeted on:
  
  1. People who's primary income isn't from a job.
     
  2. Helping the financial services industry move their operations overseas.
     
  3. And people with above-average incomes who also have a lot of deductions to help them avoid paying taxes on all of it.
     

(I do think some of those summaries are rather cliche or over-simplified. But you know that the way they'll be portrayed will be even more sensationalistic.)

[Cdowwe]

Finally a good move in term 2. After the failure of pushing through SSI reform, which I personally may never forgive the GOP or Bush for, this is a step in the right direction

SSI reform...are you talking about Social Security?

[NoCalMike]

Not suprising.

[Duncan]

tax cuts without spending decreases are just pushing around monopoly money. Given that the tax cuts are going primarily to the rich and will be payed for by future generations, I find this hard to swallow. How come the republican party loves wealth redistribution when it moves money from the future into the hands of the present rich?

Wealth redistribution can only occur when it is transferred from people that earn it to people that don't.

[Duncan]

I wouldn't mind doing the same.

Are you currently prevented from paying more in taxes to the federal government?

[Fergasun]

Bah.

Congress has been spending like drunken sailors for the past 10 years or so.

Waiting for a group of Conservative Republicans to break away from mainstream-line and form a 3rd party. That would be interesting. Hasn't it been awhile since we underwent some political party changes in this country?

[jbooma]

Finally a good move in term 2. After the failure of pushing through SSI reform, which I personally may never forgive the GOP or Bush for, this is a step in the right direction

http://www.washingtonpost.com/wp-dyn/content/article/2006/05/02/AR2006050201290.html

...... cut, click on link

I agree with you but why are you hating on SSI reform, it needs to be done and soon. Bush's plan was a little different but it is the same principle as creating and IRA or 401K type account. It makes sense and may save SS.

[jbooma]

Definitley agree. I do hope to see some more spending cuts, or else we simply are pushing off a tax increase

The Deficit Reduction Act, signed in February made some critical changes to Medicaid and Medicare which will save the federal government billions over the next few years

I hope to see another bill like that signed this winter

Yes but do you realize where people are going to pay for that? It is great they slashed medicaid and medicare, but now how they did it. A lot of people are going to be put in a very bad situations because of this.

Medicare and Medicaid are great for those that need it. Many are against it because they do not understand what they get from it, you would be surprised.

[The 12th Commandment]

Are you currently prevented from paying more in taxes to the federal government?

Naw, but my whole salary from the county wouldn't be enough to foot the bill for a seconds interest. And since you ask why wouldn't you want to help your country in a time of war? Or do you think the fact that were in up to our ears in debt to foreign governments is going to be a good thing for future generations. Deficit is bad. For me personally or for a government.

[autographcollector]

Bah.

Congress has been spending like drunken sailors for the past 10 years or so.

Waiting for a group of Conservative Republicans to break away from mainstream-line and form a 3rd party. That would be interesting. Hasn't it been awhile since we underwent some political party changes in this country?

Yeah Ross Perot and the Green Party :laugh:

[autographcollector]

Naw, but my whole salary from the county wouldn't be enough to foot the bill for a seconds interest. And since you ask why wouldn't you want to help your country in a time of war? Or do you think the fact that were in up to our ears in debt to foreign governments is going to be a good thing for future generations. Deficit is bad. For me personally or for a government.

Raising taxes is not the solution to the problem. If it were only that simple. Raising taxes:

a) Doesn't necessarily increase what the federal government takes in.

Doesn't correct the problems in spending.

Focus on the problem....

[The 12th Commandment]

Raising taxes is not the solution to the problem. If it were only that simple. Raising taxes:

a) Doesn't necessarily increase what the federal government takes in.

Doesn't correct the problems in spending.

Focus on the problem....

I never once suggested we raise them. And I don't want to. I pointed out that we shouldn't cut them while spending more than we take in. Focus on the reality...

[autographcollector]

I never once suggested we raise them. And I don't want to. I pointed out that we shouldn't cut them while spending more than we take in. Focus on the reality...

Reducing taxes doesn't necessarily mean the fed government takes in less.

I wasn't insulting you.

I am just saying people on this board tend to oversimplify matters.

Reduction or increasing taxes affects lots of things in the economy which affect what the government brings in. More disposable income in some economic theory leads to more spending, which leads to more jobs, which leads to increased production .... so on and so on.

So simply reducing taxes has a number of effects on the economy.

[Winslowalrob]

Reducing taxes doesn't necessarily mean the fed government takes in less.

I wasn't insulting you.

I am just saying people on this board tend to oversimplify matters.

Reduction or increasing taxes affects lots of things in the economy which affect what the government brings in. More disposable income in some economic theory leads to more spending, which leads to more jobs, which leads to increased production .... so on and so on.

So simply reducing taxes has a number of effects on the economy.

Its big, complicated, and some economic theories refute that simply having disposable income leads to increased produciton. There is no silver bullet, simply reducing taxes may not have the desired effect, and one should be very wary of any rule in economics beyond question, because there ain't a whole lot of them.

[The 12th Commandment]

Reducing taxes doesn't necessarily mean the fed government takes in less.

I wasn't insulting you.

I am just saying people on this board tend to oversimplify matters.

Reduction or increasing taxes affects lots of things in the economy which affect what the government brings in. More disposable income in some economic theory leads to more spending, which leads to more jobs, which leads to increased production .... so on and so on.

So simply reducing taxes has a number of effects on the economy.

The intricacies of internet communication.

But to respond I would suggest that while it's true that tax cuts have an impact on the economy it's kind of contradictory to suggest that it leads to increased revenue for the feds. More likely, it leads to increases in gross receipts taxes at the local and state level. And I know that leads to....

It seems to have helped our economy when we were faced with recession, but it didn't lower the deficit any. And the threat of recession has long since passed. Really if it were so effective a policy for deficit reduction then the question would be - Why is the deficit continuing to increase? I suggest that we as Americans should tighten our belts (and not me by myself ) and pony up so as not impact future generations to severly. I think that's reasonable.

[autographcollector]

Its big, complicated, and some economic theories refute that simply having disposable income leads to increased produciton. There is no silver bullet, simply reducing taxes may not have the desired effect, and one should be very wary of any rule in economics beyond question, because there ain't a whole lot of them.

:applause:

Agreed. That is basically all I am saying.

Simply focusing on tax increase or decrease misses the problem as a whole.

I am not promoting economic theory just everyone needs to understand it is very complex problem.

[Winslowalrob]

The intricacies of internet communication.

But to respond I would suggest that while it's true that tax cuts have an impact on the economy it's kind of contradictory to suggest that it leads to increased revenue for the feds. More likely, it leads to increases in gross receipts taxes at the local and state level. And I know that leads to....

It seems to have helped our economy when we were faced with recession, but it didn't lower the deficit any. And the threat of recession has long since passed. Really if it were so effective a policy for deficit reduction then the question would be - Why is the deficit continuing to increase? I suggest that we as Americans should tighten our belts (and not me by myself ) and pony up so as not impact future generations to severly. I think that's reasonable.

Also keep in mind that the tax cuts were planned PRIOR to the recession, 18 months before they went into effect as part of the campaign promises, it was never designed to end a recession because there was no visible recession during the campaign.

In saying that I am not sure the tax cuts are a good idea, but we will see. Perhaps our recovery is weaker than we think and the oil price shocks necessitate a tax cut, or perhaps not. Just keep an open mind guys.

[autographcollector]

It seems to have helped our economy when we were faced with recession, but it didn't lower the deficit any. And the threat of recession has long since passed. Really if it were so effective a policy for deficit reduction then the question would be - Why is the deficit continuing to increase? I suggest that we as Americans should tighten our belts (and not me by myself ) and pony up so as not impact future generations to severly. I think that's reasonable.

I agree! Something needs to be done as in tightening our belts. Deficit reduction is something we should all be concerned with.

[Winslowalrob]

:applause:

Agreed. That is basically all I am saying.

Simply focusing on tax increase or decrease misses the problem as a whole.

I am not promoting economic theory just everyone needs to understand it is very complex problem.

Haha tru dat playa.

[The 12th Commandment]

Well then, we're all in agreement. :laugh: If only it were this easy up on the hill.