So, how do you plan to pay for it..?

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.

Remember this?

From The Washington Post:

Comparing Democratic and Republican tax plans

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.

SOURCE: Joint Committee on Taxation | The Washington Post - August 12, 2010

Rachel Maddow explains this WAY better than I can..

From The Washington Post:

GOP plan to extend tax cuts for rich adds $36 billion to deficit, panel finds

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:

Five myths about the Bush tax cuts

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.

7 thoughts on “So, how do you plan to pay for it..?

  1. When asked how they will pay for it, the Republicans will NOT answer because what they propose to do will affect everyone in this country BUT the rich. The rich will of course benefit greatly. Again. Cutting Medicare, Medicaid, Social Security, our social safety nets will affect all those who need and depend on those programs—all those who paid into these programs all their working lives in order to be able to depend on them when they get to old or too sick to work any more. To the rich, it doesn’t matter. They wouldn’t miss a beat if these programs were all scrapped. The Republicans don’t dare say out loud their real intent. If people only knew.. Why people believe the conservative lies and continue to vote against their own best interest is beyond me…
    They won’t cut the military budget. The military budget went up like crazy after 9/11 (opportunity, as stated by a number of Neocons), and then went up a whole lot more after Bush took us to two wars on a credit card. Gotta love the military industrial complex.. War is big business, with big profits.

  2. You’re missing the point ~ it’s the rich who produce the jobs and therefore need the big breaks/s

    (or so the repiggs keep yammering)

    [if that is the truth, then where the hell are all of these jobs? – there’s been plenty of time for implementation]

  3. Great post, ‘Muse!
    Any talk of tax cuts and balancing the budget can’t slip by without including Social Security, can it?

    This story was in an article in my local paper, the Huntsville Times, dated August 2, 2001. I kept the article, and cut and pasted it onto an 8 1/2 by 11 sheet of printer paper, so I could make copies of it. I happened across one the other day looking for something else, of course. This Seattle Times version is the most complete version available I could find on the net, using an identical text search. The exact wording is slightly different from my copy, but it’s essentially the same. Since this is over nine years ago, some of the numbers, based on projections, are inaccurate, but the original plan the Bush Administration had in mind is the same. Pre-9/11, this was to be the big issue early in Bush’s first term, while he was sure he had the House and Senate to back him in passing these changes.

    Social Security’s Catch-22

    As President Bush’s Social Security Commission seeks to modernize the nation’s retirement program, its members are reaching an inescapable conclusion: They must find a way to let the government wriggle out of repaying $1.1 trillion the U.S. Treasury has borrowed from the Social Security trust fund over the past 17 years.
    That money, about $8,000 per worker, was used to pay for other federal programs, thereby reducing the federal deficit.

    Lately, with federal budgets in the black, Social Security funds have been borrowed to take the next step, paying down the national debt. In return, the government has issued bonds, essentially IOUs to the trust fund.

    While it was assumed the loan someday would be repaid, mostly with income-tax revenue, it now appears the debt will be absorbed mostly by Social Security payroll taxpayers, 53 percent of whom earn less than $20,000 a year.

    A lot of people suggest raising or eliminating the cap on Social Security deductions, as a way to keep the system funded. Almost all payments to Social Security are from people whose withholding is reported via a W-2, plus self-employed people who pay both the employee’s and employer’s share in quarterly estimates. How many people do you know who exceed the $106,000 cap with such earnings? Most people earning more than that have at least some of their income from investments or capital gains, or maybe rental income, none of which is subject to any Social Security deduction. Raising the cap won’t get at that kind of income, but it should be included in any new laws, and paid in as self-employment earnings, regardless or origin. Of course, this won’t be easy to pass, but it would be a lot more fair, to make everyone pay into the program whether they work or sit around the pool waiting for direct deposit of their dividend checks. Then, if raising the cap is needed, it could be done incrementally, over time. People used to say the wealthy don’t benefit from Social Security because their benefit is too small a percentage of their retirement to matter, but that is pre-Bernie Madoff thinking. Everyone needs to be in the program, regardless of income, because the future is uncertain, even for the well-off.

    The part about investing the Social Security surplus in the stock market is hilarious. Conservatives always have a fit at the idea of the government competing with private business for profits. Why would investment profits be any different? Any money made by government fund managers would have to be at the expense of private investors. They just wanted to reinflate the bubble (remember, this was 2001), by getting all that money into the Wall Street ponzi scheme so they could lose it all to the private sector, then shut down Social Security because it was broke.

  4. The true measure of the cost of extending the Bush Tax Cuts is in lives.

    When services are cut, people die.

    When industries are deregulated (or when there is lax regulation due to not enough inspectors) people die.

    Take $36 billion out of the federal budget each year to allow the rich to keep that money in their trust accounds, and balance that with $36 billion in spending cuts – people will die.

    • BnF, I totally agree with you.

      It did make me think of this though.. “If a tree falls in a forest and no one is around to hear it, does it make a sound?” Will people pay attention to the consequences of these decisions the Republicans hope to make? Notice that more people are dying through cuts in services? Will there be reporting? If that part is never reported on, is it actually happening? Do you think the Right Wing media will ever report those statistics or facts once it starts happening, or look the other way..

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