Tax Cut "Compromise", who cares about the deficit...

[Fergasun]

We all know there is going to be an extension of the tax cuts, and most likely there will be some "compromise" involving unemployment? "Compromise"? Are you kidding me? More like, both parties will spend money on the folks they want to benefit.

So, given that the GOP has enough votes to block the extension of *only* the middle class tax cuts, what do the Democrats do? They say, they will only vote for that extension if they can extend unemployment benefits.

So let's look at this. I found these numbers from Google, and don't have time to 100% fact-check them.

Cost of extending the tax cuts for families making under $250k. $135 Billion over 10 years.

Cost of extending tax cuts for over $250k. $600 Billion over 10 years.

Cost of 1 year extension of unemployment benefits. $150 Billion.

Do any politicians care that we have a deficit problem in this country? This makes me so insane. Especially since I saw so many others in a thread talk about how they vote on "fiscal responsibility".

I just saw something and was reminded that this extension would be a 2 year extension of the tax cuts... so it would be.

$26B over 2 years.

$120B over 2 years.

$150B over 1 year.

Of course I have no illusions that the tax cuts wouldn't be extended in the next 2 years as well, or that the UE extension wouldn't be extended either. Can I be the first to call this all "socialism"? Corporate welfare for the rich, and traditional welfare for the poor.

[PeterMP]

Yeah, I actually got to sit down and watch the Sunday talk shows for a little bit.

I didn't know whether to laugh or cry.

Both sides get what they want and the deficiet goes up some more.

[DjTj]

Both sides get what they want and the deficiet goes up some more.

Which is weird, because voters on both sides seem to want the deficit to go down. :whoknows:

[Larry]

Ferg,

I think it's a foregone conclusion that the tax cut extension will have yet another expiration date on it. It's the tried and true formula they've been using ever since they invented them.

That way, they can pretend it's a smaller tax cut. Because the rule is "cost over the next 10 years". So if they once again pretend that they'll go away in two years, then they can pretend that it only costs 1/5 as much. (And never mind that all of that cost will come in two years. Those big increases in the deficit? Those are the Democrat's fault.)

And, that way, two years from now, they'll be able to once again hold the middle class hostage until they get their special interest tax cut, just like they've done every other time.

I even predict that the date they pick will be two years from now. That way, they can hold the middle class hostage, and claim tha anybody who doesn't vote in favor of it is "voting for a tax hike". (Just like they've done all the other times, including this one.)

[Duckus]

Yup. Its a big joke.

Let all the tax cut expire. Cut spending across the board. Raise the age of Social Security. Huge cuts in military spending.

Do it yesterday.

[JMS]

I don't know if their will be a compromise. I don't see how a compromise benifits the Democrats.... It's basically moronic to raise taxes during an economic down turn. But the democrats have made their pitch. leave the bush tax cuts in place for low and middle income people. Let them expire for the wealthy.

The republicans are saying.. NOPE.... So hang that around their necks as they and they alone are responsible for hiking taxes on everybody. Allowing the GOP to govern with a minority of seats in both houses is just painfully wussy.... The democrats need to grow a set and get their tukuses into the frey..

Here is the deal... If the Democrats "comprimise" and excend the tax cuts across the board. The GOP is going to be in a much stronger position to make these idiotic cuts permenent after the next election. That's really going to suck.... Cause if they are made permenent they will cost us 3 times what Social Security shortfalls are scheduled to cost the government over the next 75 years....

It would require deap deap cuts in ssn, medicare and medicare to compensate....

The dems have to grow a backbone and actually stupe to engage politically because so far the gop is mopping up the floor with them.

[Ellis]

If you want change, you have only 2 choices...

1) run for public office.

2) vote for anyone other than the duopoly Dem-Republican monster.

[Larry]

I don't know if their will be a compromise. I don't see how a compromise benifits the Democrats.... It's basically moronic to raise taxes during an economic down turn. But the democrats have made their pitch. leave the bush tax cuts in place for low and middle income people. Let them expire for the wealthy.

The republicans are saying.. NOPE.... So hang that around their necks as they and they alone are responsible for hiking taxes on everybody. Allowing the GOP to govern with a minority of seats in both houses is just painfully wussy.... The democrats need to grow a set and get their tukuses into the frey..

Been saying for months, that if the D's want to do political mud wrestling, they should introduce legislation to permanently extend the tax cuts on the middle class.

And make the GOP filibuster it.

Not one of those "put your name in the secret book, and it magically never comes up for a vote" things. Make them stand on the floor of the Senate and read the phone book. Make them do it every day from now until new years.

And then, when everybody in the country sees their paycheck get smaller, first paycheck in January. Sit back, and say nothing.

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But, as to the "why should the Democrats compromise?"

Because if the Republicans succeed in preventing a middle class tax cut from being voted on (and so far, they're succeeding), then the R's will claim that it's the D's fault that taxes went up. And nobody will pay attention to the fact that the D's tried to prevent it, and the R's prevented them from doing it. They'll swallow the spin.

Because they already have.

[PeterMP]

They're (the Dems) are going to get an extension of the unemployment benefits.

[Stadium-Armory]

I'm a married middle class father of four with a home mortgage whose household budget is defined in some degree by my current tax burden, and yet I am willing to suck it up and pay higher taxes for the sake of our future. Of course it will be painful, but its time to man up and take our medicine. I can drive the beater for another few years, fore go a fancy vacation, eat out less, and consume less. Most people can.

[Hubbs]

I wonder if, after two years of a Tea Party Congress not reducing the deficit below $1 trillion because they won't make any real spending cuts, the right will have lost enough of its fervor that Obama will feel like he can risk drawing a line in the sand and saying, "We have to start paying the piper. No compromise this time. Cuts for the middle class, not for the wealthy. That's what I'll sign and maintain if re-elected. If you want taxes on teachers and firefighters to go up, go ahead. Be stubborn."

(Now, he obviously could have said that same thing today, but the political timing would have been so disastrous that I don't think he could have risked it.)

[Larry]

I guarantee you that two years from now, there will have been no spending cuts other than token ones, and the Republican campaign motto will be "but that's because we didn't have enough power. Vote Republican, even more!"

(The Democrats will probably make a feeble attempt at making the same claim. But their attempt won't work.)

The deficit will be somewhat smaller, because the economy will be somewhat better.

(Both Parties will attempt to take credit for this. The Republican attempt will work.)

[techboy]

Another victory for President Obushma.

[DCsportsfan53]

Which is weird, because voters on both sides seem to want the deficit to go down. :whoknows:

I'm assuming you're being half sarcastic but it basically goes to show you that, at the end of the day, we pretty much have one party, never more than 2 ideas on one given subject and the same result benefiting the same people no matter who's in power. I'm done with both of them, my voting days are pretty much over, Obama has killed any hope I had of actually making a difference with a vote and believing that the vote matters one bit. Not so sure it was him more as me getting older and recognizing the script. How can it matter when both parties will wind up doing the same **** anyways? The only thing I can be sure of is the gov't will spend more, keep chipping away at our rights and continue to serve the multinational corporate dollars that put them in Washington in the first place. I've simply given up, at this point I keep my head down, go to work everyday and hope for the best while expecting the worst. The American public needs a wake up call and this country is probably in for a rather drastic standard of living change in the coming decades that no one wants to talk about or face. Every month there are good economic indicators followed by bad ones, they keep talking like we're on the verge of a recovery. It ain't happening, our economy has been built on smoke and mirrors for decades, everyone else is catching up and the smoke machine is on the fritz.

[isle-hawg]

These spineless politicians are going to bankrupt the nation. Now is the time to make some tough choices, instead they agree to add to the debt and kick the ball down the field until there are no choices left to be made as the interest on the debt alone will at some point absorb the entire national revenue and our creditors will quit lending us money. Great job by our electied officials who apparently have their re-election interests foremost in mind!!!!!

Obama - Bush WTF is the difference when it comes to their fiscal irresponsibility???

[Larry]

Hey, this way they both get what they want more than anything else in the world.

An excuse to blame each other.

[isle-hawg]

I blame both parties - neither is willing to provide leadership - only pandering - sigh.

Only ****ing idiots can look to this as a good thing as they must of failed history class.......

[Larry]

Hypothetical:

Congress passes the tax cuts. And the unemployment extension.

Obama vetoes both of them.

How does this come off? Is that leadership? Making tough decisions?

Does Obama's approval ratings go up, or down?

Does Obama get credit for making big cuts to the deficit?

[December90]

Ferg,

I think it's a foregone conclusion that the tax cut extension will have yet another expiration date on it. It's the tried and true formula they've been using ever since they invented them.

That way, they can pretend it's a smaller tax cut. Because the rule is "cost over the next 10 years". So if they once again pretend that they'll go away in two years, then they can pretend that it only costs 1/5 as much. (And never mind that all of that cost will come in two years. Those big increases in the deficit? Those are the Democrat's fault.)

And, that way, two years from now, they'll be able to once again hold the middle class hostage until they get their special interest tax cut, just like they've done every other time.

I even predict that the date they pick will be two years from now. That way, they can hold the middle class hostage, and claim tha anybody who doesn't vote in favor of it is "voting for a tax hike". (Just like they've done all the other times, including this one.)

This language is part of the problem. The tax cuts don't "Cost" the government anything. Raise the rates and constrict the economy and see if receipts go up or down... (The answer might surprise those capable of only static analysis)

Even if you make the false assumption that the static analysis is correct; when the company I work for loses a revenue source, they do not incur a "cost", they do however have something that needs to be accounted for with how the company spends its money (less money for disposable spending)

I wonder if, after two years of a Tea Party Congress not reducing the deficit below $1 trillion because they won't make any real spending cuts, the right will have lost enough of its fervor that Obama will feel like he can risk drawing a line in the sand and saying, "We have to start paying the piper. No compromise this time. Cuts for the middle class, not for the wealthy. That's what I'll sign and maintain if re-elected. If you want taxes on teachers and firefighters to go up, go ahead. Be stubborn."

(Now, he obviously could have said that same thing today, but the political timing would have been so disastrous that I don't think he could have risked it.)

umm, we don't have a tea party congress. We have a few tea party members (far from anything resembling a majority). Not to even mention that the Senate is (power wise) 1/2 of congress and they are still run by the Democrats

[Larry]

This language is part of the problem. The tax cuts don't "Cost" the government anything.

Yes, they do.

And yes, I'm quite aware of the oft-repeated talking point that "when you cut taxes, revenues (eventually) go up (sooner or later)." Problem with the talking point is that revenues almost always go up, whether rates are cut or not. It's like claiming that every time the Redskins win the Super Bowl, gravity works, therefore the Redskins cause gravity.

Even if you make the false assumption that the static analysis is correct; when the company I work for loses a revenue source, they do not incur a "cost", they do however have something that needs to be accounted for with how the company spends its money (less money for disposable spending)

Now there's a more valid line of reasoning. It's pure semantics, but it's logical.

Here's the counter:

The formula for calculating the deficit is . . . ? (Hint: It has two, and only two, numbers.)

----------

Or you can consider this one:

Your analogy of a company assumes that your company has no control over revenue.

In this case, it's different.

Your company sells widgets. It sells them at a loss. It's been selling them at a loss for as long as the company's been in existence. In fact, lately, you've been losing 20% on every widget you sell.

Half of the members of the board think it would be a great idea to cut the price of widgets by another 5%. This will not cause the company to sell more widgets. It will not result in any efficiencies of scale. It will not increase your company's market share. (You're a monopoly.)

In fact, these board members assert that it's morally wrong for anyone to even ask them where the extra 5% money is going to come from, because they point at their dictionary and say that reduced revenues are not a cost and no explanation is needed for why you're deliberately causing them.

These board members instead insist that they can cut the price of widgets as much as they want, and the only thing that can be done about it is for somebody else to cut the company's costs. They, themselves, don't have any plan to cut these costs. (Well, actually, they do. But they know that if they actually say what their plan is, they'll get voted off the board. So instead, their plan is to intentionally make the company go further into debt, until eventually somebody else does what they want, but won't say.) Instead, they simply continue to loudly assert that they don't need to come up with any way to offset the loss of revenue which they're intentionally causing. Their job is to cut the price of widgets. It's somebody else's job to fix it (but not by raising the price.)

In fact, their stated purpose in cutting the price of widgets, is to intentionally force the company to borrow more and more money, until eventually the crushing debt of the company forces the other board members to do something about it. They are intentionally causing the company to go bankrupt, so that they can force somebody else to save it.

You're a stockholder in the company. Your opinion of these board members is . . . ?

[PeterMP]

This language is part of the problem. The tax cuts don't "Cost" the government anything. Raise the rates and constrict the economy and see if receipts go up or down... (The answer might surprise those capable of only static analysis)

So if we cut taxes to 0, what happens to receipts?

[December90]

Yes, they do.

And yes, I'm quite aware of the oft-repeated talking point that "when you cut taxes, revenues (eventually) go up (sooner or later)." Problem with the talking point is that revenues almost always go up, whether rates are cut or not. It's like claiming that every time the Redskins win the Super Bowl, gravity works, therefore the Redskins cause gravity.

Now there's a more valid line of reasoning. It's pure semantics, but it's logical.

Here's the counter:

The formula for calculating the deficit is . . . ? (Hint: It has two, and only two, numbers.)

I think the main point that you and I dis agree about is: I think the government has enough revenue for what they should be doing, they just try to do more than they should and they don't do it well or efficiently. You think the government needs more revenue to continue to do what it has been doing (and maybe do more of it???)

My (very simplistic) take of how I read you, feel free to correct my errors on your views.

What the government is doing is similar to the former NFL Players who earned Millions and yet still end up filing for bankruptcy. It is not an income problem, it is a spending problem.

So if we cut taxes to 0, what happens to receipts?

clearly tax receipts would go to 0.

What would happen if we raised the rates to 100%?

[PeterMP]

clearly tax receipts would go to 0.

What would happen if we raised the rates to 100%?

So somewhere in the middle there must be place that would give the maximum return, how do you know that we aren't below that point?

[isle-hawg]

Did not Obama run on change? What is the change other than he will show up Bush and really run up a debt? If he stuck to his beliefs there would be not more tax cut for the rich. But I'll play along

Hypothetical:

Congress passes the tax cuts. And the unemployment extension.

Obama vetoes both of them.

How does this come off? Is that leadership? Making tough decisions?

A: Dems still in power in Congress. Push through the middle class tax cut (which I oppose BTW) and force the Rep party to block these tax cuts and all legislation until there are tax cuts for "the rich". Show some ****ing balls on principle how about? He did campaign against tax cuts for the rich did he not?

Does Obama's approval ratings go up, or down?

I think if he did they would be a "wash". If taxes went up for everyone he could say it was because the Reps refused to approve the tax cuts for the middle class.

Does Obama get credit for making big cuts to the deficit?

Are you kidding???: We/He and our other elected officials keep adding to the national debt!

[Larry]

I think the main point that you and I dis agree about is: I think the government has enough revenue for what they should be doing, they just try to do more than they should and they don't do it well or efficiently

That's the federal budget for 2010, in graphic form.

Note that the revenue projection, on the left, assumes that none of the Bush tax cuts are extended. If they are, then that revenue forecast goes from 2.2T, to 2T.

Please, feel free to let us know all of the things you think the government should stop doing, to bring it's expenditures down below it's revenues.