Taxes.. What a wonderfully confusing and contentious subject. When President Bush enacted his tax cuts for the rich in 2001 and 2003, they weren’t paid for, and the way it was set up, they were set to expire in ten years.
A refresher course on “The Bush Tax Cuts” from the New York Times:
Why are the tax cuts set to expire on Dec. 31st?
The bills were written that way because the Republicans had only the slimmest of majorities — in fact, Vice President Dick Cheney had to cast a tie-breaking vote to pass the 2003 bill. To avoid a Democratic filibuster, the cuts were rolled into a so-called budget reconciliation measure, which cannot be filibustered. (It is the mechanism President Obama and the Democrats used to pass health care reform.)
But under Senate rules, reconciliation cannot be used for any bill that would add to the federal deficit after 10 years. The “sunset” provision that called for the measures to expire in 2010 meant that the deficit was calculated as if the higher tax rates were back in place for succeeding years, a step Democrats criticized as camouflaging the bill’s true cost.
In the years that followed, Democrats vowed to let the Bush administration’s tax cuts for the wealthiest taxpayers expire as scheduled after this year. In the 2008 campaign, Mr. Obama called for repealing the tax cuts for the rich in 2010, a year before they would otherwise expire. But once in office, he quietly set aside that promise because of the recession, proposing to let them lapse in 2011 as the original law provided.
Both parties agree on one thing: that the 2001 income tax cuts will be extended for everyone else — that is, for the roughly 98 percent of households in which couples have less than $250,000 in annual income or individuals earn less than $200,000. The fight is over whether to extend the income tax cuts of 2001 for the top 2 percent on income that exceeds that level, and whether to extend the cuts in capital gains and dividend taxes that were the heart of the 2003 bill.
The tax cuts were not paid for and thus added greatly to the current national debt (yes, the debt that everyone is so concerned about, especially [apparently] Republicans). (Oh, and did I already mention the two wars that Bush started that weren’t paid for..?)
If the tax cuts are extended, they will continue to add to the debt, and the numbers are big. If they are allowed to expire (as they rightly should), the Republicans will run in the next election cycle against those pesky “tax and spend” Democrats, as they will blame the Dems for raising everyone’s taxes, though as you can see by the below chart, the tax increases will really only effect the richest 2% of this country who were greatly advantaged under President Bush—the richest people (lovingly referred to by Bush as “his base”) who can afford to pay their fair share, and just don’t want to, and will now do whatever it takes to not have to.
From The Washington Post:
The Republicans’ plan to extend the Bush administration tax cuts for the wealthy would cost $36.6 billion more than the Democrats’ plan, which extends cuts only for families making less than $250,000 a year and individuals making less than $200,000.
Rachel Maddow explains this WAY better than I can..
From The Washington Post:
A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year — and transfer the bulk of that cash into the pockets of the nation’s millionaires, according to a congressional analysis released Wednesday.
New data from the nonpartisan Joint Committee on Taxation show that households earning more than $1 million a year would reap nearly $31 billion in tax breaks under the GOP plan in 2011, for an average tax cut per household of about $100,000. Read on…
Also from The Washington Post:
So, this just seems to me to be a no-brainer..
I am happy to pay my fair share in taxes. I agree that taxes need to be simplified, made more fair, and loopholes closed. Taxes are a responsibility we all have for the privilege of living in this great country. It pays for a lot that we depend on and that makes our lives run more smoothly. It helps to take care of the oldest and weakest among us. Here’s a run-down of some of what our taxes do for us..
So my question to that 2% elite in this country would be “Why don’t you want to do your fair share and give back to this country who has given you so much?”
The Daily Kos did a post, putting in context historically, what the previous tax rates were for the top bracket and under previous Republican presidents.
Only in 1988 and 1989 (Ronald Reagan’s final 13 months in office) was the TOP MARGINAL rate down to 28%. It was 69.13% when he went into office, and went from 69.13%-50% from 1981-1986, then 38.5%, then 28%. Barack Obama has proposed a top marginal tax rate of 39.6%, which was the rate under Bill Clinton. So with the exception of 13 months of Reagan’s time in office, Obama’s rate is lower than Reagan’s.
[..] Low taxes for the TOP RATES are the exception even under Republican presidents, not the norm. [..]
They based it on this chart from the Tax Policy Center.
President Obama is being smart, REASONABLE, honest and fair in what he is proposing (Or should I say, WAS proposing). He should not back down to the pressures put on him by the Republicans who only care about the wants and needs of Corporations and the rich of this country. What the Republicans want to do is fiscally unrealistic and irresponsible. I like to refer to it as “magical thinking”. They simply don’t care about how this affects the rest of us, or how it affects our economy and our national debt. The just don’t care. Their actions NEVER match their words.
I can’t end this post without putting links to a couple of excellent articles by one of my favorite (and smartest) economists in the country—Paul Krugman.
From the NYT September 16, 2010: The Tax-Cut Racket
From the NYT September 19, 2010: The Angry Rich
The Bush Tax Cuts need to be allowed to expire. If you believe in being fiscally responsible, then support doing the responsible thing.