There was a bit of a pissing match (what's new) on CNBC between Allyson Schwartz a democrat from Pennsylvania and Jeb Hensarling a republican from Texas.
The democrat says no tax hikes and the republican says letting the dividend and capital gains expire (we are not there yet BTW) is the biggest tax hike ever, he said they (the dems) will not vote to extend the cuts from earlier this decade.
He then said the average American family will get an average tax increase of $2500 per month.
Putting off for a moment my thought on extending the tax cuts doesn't the average family have less than $50,000 saved and make something like $45,000 per year. Even if these numbers are wrong they are not that far off so I am not sure where the extra $30,000 a year in taxes comes from.
The republicans view letting the tax cuts expire as a tax hike and the democrats do not. From a word games stand point I suppose both are correct. If the tax breaks expire people would pay more taxes so it is a hike. The tax breaks were temporary so letting them expire is simply reverting back to the way it was before and not a true hike.
I can't argue with the wording but of course the wording is totally irrelevant. If they expire the market will get smacked, IMO, regardless of the wording. I for one do not think they will expire. I cannot explain why they are not yet permanent I also do not know why the were not made permanent when the republicans were running the show.
At this point there might be logic in waiting until closer to the election to make them permanent.
The entire exchange between these two is why I dislike all politicians. The $2500 per month makes no sense whatsoever. I had never heard of that guy before but like most of them; zero credibility.
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22 comments:
I'm not convinced the tax cuts should be permanent, but I don't have a strong opinion against either.
I do believe that the tax cuts were impermanent originally b/c the Repubs didn't want to fully own the budgetary implications.
A Washington Post article calls that out as well:
"To keep the economy on track, Bush said Congress should make permanent all of the $1.85 trillion in tax cuts enacted during his first term, including tax breaks for parents, married couples, investors and many businesses. Bush and Republicans originally allowed for many of the tax breaks to expire in 2010 as a way to hold down budgetary costs."
http://www.washingtonpost.com/wp-dyn/content/article/2005/08/09/AR2005080900123.html
sorry I was not clear, i know why they were originally temporary but I'm not sure why the GOP did not make the permanent last year or the year b4.
I literally picked up my tax return yesterday. I cant believe they even think about taxing us more. I agree 100% that ALL politicians should be given zero credibility. I so believe he meant to say $2,500 year. REAGAN"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
i am no democrat. in fact, i used to vote republican before the neo-cons hijacked the government.
I am also not for extra taxes. This year i am subject to the AMT for the first time, and i do not like it. i want lower taxes and smaller government.
However, I remember when Bush asked for the tax cuts. I remember him distinctly saying these are TEMPORARY cuts to kick-start the economy. Nobody in the administration at the time said that they would want to extend the cuts when they expire. Nobody wanted them permanent.
The congressman on CNBC also said that the dems enacted the largest tax increase in history 12 years ago.
That may be the case. But I for one would much rather have the 90s back than what we have now. My Federal taxes may be lower, but i am paying much more at the pump, much more to heat my home, much-much more for my insurance and getting much less return on my investments.
Also since the States' funds from the Federal Government got slashed my sales tax is up, my parking tickets are up, my real-estate taxes are up, my toll-both fees are up,... and now ComEd jacked up my electrical rates 40%.
All things being equal -- and they are not, i understand that -- my total cost of living is a lot higher now than in the 90s. even though i am paying less in Federal taxes... though, thanks to the AMT, even that perk is more or less gone this year.
Roger..if you're still overweight energy and have some good rep in australia and northern europe, you're probably doing well. You mentioned a quarterly report coming up. When you do, for the purpose of comparing, clarify if you're including cash,dividends, etc...kind of a client's bottom line. Personally, knock on wood, I'm up 2.99%. That's with 50% cash most of the time. With age, fear is wrestling with greed. If I could just get them to go on a cruise together.
I have made a killing in GRZ the past 2 days
I was given "The FairTax Book" by
Neal Boortz and Congressman John Linder (R-Georgia) as a gift. I was
skeptical of their plan at first, but by mid-way through the book, I became a true-believer in their plan.
The tax code is the gravy train for too many politicians, lobbyists, accountants and lawyers, and the sooner it's scrapped the better. Maybe the pending crisis in 2011 will get people focused on real tax reform.
I've paid more than my fair share of taxes over the years, I just wish I could say the same for my former employer. With the right accountants, lawyers and bankers, BILLIONS in capital gains were permanently buried, never to be taxed like your or my sales would be !
A CrumpyAMTpayer 2 years running
some great and funny comments thank you.
Amen to that Roger, tax policy is a sufficiently thorny issue w/o having to wade through errors, ideological pablum and bile first (although the logic connecting a false statement by one politician to a pox on all parties in a debate is not immediately obvious to me).
In any case now that the 'Tax Freedom Day' report (http://tinyurl.com/y4qh3t) has, once again, been inflicted upon an unsuspecting American public it is probably necessary to, once again, list a couple authoritative resources debunking this perennially misleading document: Kash Mansori at The Street Light http://tinyurl.com/2x7c5a debunks the logic of the report and the Center for Budget Policy and Priorities at http://tinyurl.com/24zh9z focuses on errors in method and computation.
I'm not particularly happy about my tax burden this year either but since a lot of it came from investments all I have to do is imagine what it cost in infrastructure, laws and lives to assure I could do that with reasonable confidence and I tend to calm down. OTOH the tax code really has become ridiculously complex.
I suspect that the $2500 came from dividing (re-distributing) the tax cuts for the rich by all American families and this is the amount of tax burden that would be shifted.
Yeah, it's a shameless post! Apologies to all!
With the level of the deficit--forget about the causality, the level is incontrovertible, there is no question that there needs to be more taxes--and corporate tax burden has been moderate.
"I cannot explain why they are not yet permanent I also do not know why the were not made permanent when the republicans were running the show."
Nor, why they didn't make the Inheritance tax susnet provision permannet.
Nor, why they haven't adjusted the AMT income qualifications according to today's income levels....
Because, as one of your earlier comments claimed, they have hijacked our governemnt preventing them from doing the people's business.
Sunset clauses like this could make sense as a way of getting a tax hike in the future if neccessary without having it vetoed by the President... Theoretically, I'm in favor of getting rid of taxes on capital... and the budget deficit is coming down again.... If a democrat wins the presidential election I don't think the tax cuts will be extended as is, but likely we won't go back up to (Bill) Clinton era taxes either.
If these tax breaks for the rich were capped at a reasonable level, I wouldn't mind all of them being made permanent.
The Republicans started as a party for racial equality. Then they became the party of Willie Horton. They started as an ecologically aware party and founded the National Parks. Now they want all-extraction all the time.
The one thing Republicans have been consistent about for their 140+ years, is lower taxes on the super-rich. And they're still at it.
Wow, a lot of posts here.
The reason the tax cuts weren't made permanent is because no politician, even Rebublicans, want to take a hit for cutting spending. Period. The balance has permanently shifted from voters who pay taxes to those who receive benefits, and if you want to be re-elected, you're not going to PO folks who receive benefits. Good luck on seeing a ground swell to roll back the AMT.
Too many folks (especially the MSM) focus on tax rates and equate changes in rates with changes in revenues. How often has the CBO and OMB totally missed revenue projections because they've never been able to figure this out? Higher tax rates don't necessarily equal higher tax revenues. I don't know why this lesson never sinks in, but economic growth drives tax revenue. If the economy is growing, tax revenues will also grow.
If you look at all income groups, a big chunk of Americans pay little or no income tax. Not to say they're not getting soaked on SS, FICA, and sales taxes, but it's not like they're paying too much income tax letting the wealthy are get off scot free.
Leisa, companies don't pay taxes, they collect them. Most corporate taxes are in regressive - they're past along to the consumer.
Spending: Isn't it funny how no one wants to talk about that?
Our tax system is a horror. It will never get any better. The Rs had 6 years of one-party rule and their political capital is circling the drain in Iraq. The US reminds me of Brezhnev-era 1970s Soviet Union. A sclerotic, rickety rustbucket slouching into the future.
You can be sure that when Democrats are in charge you will have inefficient government loaded with pork and largesse.
You can be sure that when Republicans are in charge you will have inefficient government loaded with pork and largesse.
Pick your economic poison.
Roger: No need to crucify Hensarling for his comment about a $2500 tax increase per month. He obviously meant $2500 per year, still no small sum for the average taxpayer. Joseph
Hensarling obviously meant per year - and that is exactly what the Democrat budget will do.
If you spent any time researching Hensarling, you would know that he is a longtime supporter of comprehensive budget reform, reforming the taxcode, and cutting spending.
You can read about him here.
http://www.house.gov/hensarling/rsc/
THE SMARTEST POLITICIAN EVER> whoever forced employers to withold taxes from employee paychecks was a genius. I have clients that will get back $500 after filing and they make comments like.. "I did not have to pay taxes this year, I even got $500 back". Idiots, and I tell them that. Should each taxpayer be foreced to write their own quarterly checks and then another whopper come april 15, you would see a revolution. McdWealth
The reason the R's couldn't make the tax cuts permanent was "Because Senate rules require a 60-vote majority to end debate under most circumstances, a minority of 41 senators can prevent a final vote on most proposals, effectively defeating them." They didn't have a 60 vote majority. Helloooooo.
The D's effectively blocked passage that would have made that permanent. The compromise was to make sunset the bill, and was sweetened by more pork for all. I agree that there is plenty of pork and corruption in both parties, but, as a general rule, D=more taxes, R=less taxes.
Finally, anyone who believes our taxes should be raised needs to move to France and see higher taxes=bigger bureaucracy=higher unemployment. Please feel free to prove disagree. Scoot
D = more taxes, more spending
R = lower taxes, more spending
The current Republican leadership is no longer for smaller government and smaller deficits, just lower taxes.
The MSM wants everyone to believe the Republicans took a drubbing in '06 because of Iraq and their "culture of corruption", but in reality, conservatives gave the GOP the middle finger and said "enough!".
http://www.conservativeusa.org/gop-btry.htm
THE SMARTEST POLITICIAN EVER> actually economist Milton Friedman during WWII was one of the authors - to help fund the war. Obviously he was smart although I have read that he proposed it out of necessaty as oppose to preference.
CA
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