Ben Nelson has come out for extending all the Bush tax cuts “until Nebraska’s and the nation’s economy is in better shape, and perhaps longer, because raising taxes in a weak economy could impair recovery.” It’s funny that he throws Nebraska in there, which is sitting on 5%. It’s also funny that he calls the extension an action “to help the economy” like the stimulus package in 2009, even though this would merely be an extension of current tax rates, which aren’t boosting the economy in any way.
He wants to pay for the tax cuts “as much as possible” but he’s not super-concerned with it, because the tax cuts primarily affect rich people we have to bring certainty to families and businesses. By the way, the only uncertainty I see from families is whether or not they’ll have a job in the next few months.
As for whether keeping tax rates on the rich would help the economy, McClatchy takes a look at the issue, and finds that the benefit to be mild at best. If the money from those taxes were re-channeled in the short term into more stimulative measures to create jobs, that actually WOULD help the economy. And it should always be noted that, if the Obama plan goes through and all the tax cuts get extended except for the top two tax brackets, the rich would get MORE tax relief out of that than anyone, because of the structure of marginal tax rates and the different tax credits involved.
But I think we see the writing on the wall here. A “short-term extension,” where Nelson seems to be going, kicks the can down the road and delays the debate. I could envision discussions about “taking the tax argument off the table” inside Democratic war rooms. You’re already hearing “the Republicans made us do it” coming from the leadership:
Senate Majority Leader Harry Reid (D-Nev.) has signaled that he will move a tax package that aligns with Obama when Congress returns next week, but it is far from clear whether he has the 60 votes necessary to pass it.
“This is a proposal that should enjoy broad support of Democrats on the Hill,” a Reid staffer said. “However, the only way we can get it done is if Republicans agree to support it.”
Incidentally, George Voinovich (R-OH) has already rejected extending all the tax cuts permanently, saying that would be a fiscal disaster. And this temporary extension just moves us in that direction.
One alternative option I could see is a permanent extension of the “middle-class” tax cuts (which in raw dollars affect the rich more) and a sunset of the extension on the top two tax brackets. Or, the tax cuts could be cut off at the $1,000,000 mark, essentially putting a new marginal tax bracket into the tax code.
Either way, it just looks like that’s where we’re headed. And with the President unwilling to make a veto threat, I don’t see a lot of resistance. We’ll apparently see this play out starting next week.
UPDATE: It’s not just Nelson. Several House Democrats in tight races are talking about extending the tax cuts, too.



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Of course Nelson’s not “super-concerned” about paying for the extension of the Bush tax cuts. He knows the money to pay for them will be there when Democratics and Republicans join hands in an historic moment of Bipartisanship and slash Social Security.
Can we stop calling them the Bush Tax Cuts?
Let them expire, as they were intended to do.
Replace them with the OBAMA tax rates.
These are the Obama Tax Cuts.
They will be written into a bill in the House next week and put to a vote before the election.
It cuts taxes beginning Jan 1 for those making less than 150k and couples at less than 250k. Everyone in that “poor cohort” gets the 20% dividend and long-term cap gains cuts, along with marginal rates that match the current rates.
the rich, who arent doing their job by spending, get to pay what they were paying in 1999.
If the goopers want to vote against tax cuts for the middle class, the so-called little people (thank you very much sen. simpson) then let them do it and pay the price.
and let’s stop calling the new tax plan anything to do with Bush.
Orzag sux
The most ominous sign is that Obama is now “fighting” to keep only the middle-class tax cuts. I’ve seen this before.
How is it that the folks in power keep overlooking this?
This government is a sham. You could see this coming back in 2008. Every time it’s the same thing. They claim they “have” to do something or the other side won’t let them do what is necessary. When will people wake and see we are being taken for suckers? It’s all a game with these people and we’re the ones getting played.
The repukes want us to go back to 1955. I say good, lets do it with the 1955 tax rates intact.
Nelson will be joined by Conrad, Baucus and lovely Lincoln. Maybe, even Grassley and Gregg. Let the middle class eat catfood.
Next year we’ll also find out that a filibuster threat is only effective when Rs are in the minority.
Or that there are really 10 to 20 Rs in the “Democratic” Party in the Senate.
Yeppers. Start in the middle, then negotiate everything away. After all, Kumbaya is a nice song, and holding hands is nice. But face it folks, we saw this coming months ago, when the Republicans starting squawking about it. I think we knew that all the “tax cuts” would be extended.
Act 2 will be how much additional tax cutting will be lumped into this steaming pile, and how much of that additional cutting will go to the wealthiest people.
Reminds ya! on the HCR debate anyone ?
Remember when the Prez couldn’t pronounce “Public Option”…..seems like
the cave is on it’s way,Bush tax cuts for the rich will continue.
but . . . but . . . Jon Walker writes mean diaries !
thanks David !
Well said. Some who post here keep scolding that we’re just not being patient enough or understanding enough or something enough, and eventually Pres Hopey-Changey will shift the unicorn on his eleventy dimenionsal chess board and voila: all will be great… except that big old blue meanie Ben Nelson, or Mary Landrieu, or Betty Crocker WalMart or (you fill in the blank) just stopped BHO from doing that wonderful thing he promised he’d do….
next verse, same as the first…
I only believe what I see BHO/Congress does. I believe nothing – zip zero nada – of what they say. I suggest that everyone else do the same.
And what, pray tell, is the definition of “extending the Bush tax cuts”
when it comes to the estate tax? An exemption of ∞ , as it is this year?
Speaking of which, another billionaire bit the dust, avoiding the tax,
and his heirs have won the lottery.
The powerful are just too busy counting their money, talking to their accountants, consulting their lawyers and lobbying Congress to notice a real unemployment rate that stands at 20%, give or take a few points. But why would the center-right barbarians care about the un- and under-employed when they are so overworked solving their own problems. Besides, we know poverty to be a kind of prison just as we know that, in America, no one goes to prison who does not deserve to be in prison.
Are you intentionally minimizing this?? </s>
Now you and I both know that what they say is opposite of their intentions, so we actually can believe. We just have to believe the opposite of what comes out of their mouths and we’ll be fine.
Um, some folks in that tax bracket are soooo relieved that the economy is rebounding. Their indicators are the school auctions at their tony enclaves. Everyone’s portfolio is doing just fine. what’s the problem?
For some reason, I am ROFL reading your comment. It hit my it hurts when I laugh button
If the Democrats extend the Bush tax cuts for the rich, I would take that to mean that the deficit is not a problem. So what do we need the cat food commission for? Gee. It’s almost as if the rich people own the government and are using it to rob us blind.
Tax cuts for the rich are spent on Yachts, Corporate Jets and buying Trophy Wives.
If only the President could DO something about it? Oh woe is me. I bet he lost his veto pen during a rousing session with corporate lobbyists.
The GOP and Rove had this timed perfectly. Make the tax cuts expire just before an election so they can be characterized as a tax increase.
Why don’t we have any wonks on the other side of the aisle? Too busy figuring new ways to fuck over the working class? The first thing I thought when I saw Obama with rolled up sleeves again was : BOHICA.
(Bend over here it comes again).
Tax Cuts for the middle class are spent on a new car to get to work, Daycare for the kids so the mom can go back to work and a college fund for the kids.
If tax cuts for the rich produced new jobs then why did the 8 Bush years see such low numbers of job creation?
If we are going back to deficits don’t mater.
Can we take the SS cuts off the table too?
Why did high taxes under FDR produce jobs and get us out of the Great Depression? Because FDR used the money to create jobs.
For every dollar of tax cuts for the rich how much of it is invested in American jobs and how much of it is spent living a Paris Hilton lifestyle?
Neither, it is invested in Chinese and Indian jobs.
Oh, and in the Wall Street Casino.
$0.00 American jobs! 100% on fun stuff…ya know because They can…
Of course, even with Obama Tax Cuts, the WH would still blow the PR battle, just like the public thought taxes went up when the Recovery Act included tax cuts and people’s taxes went down. It wasn’t big but it was the best kept secret.
A “short-term extension” — which, color me shocked, will last until the GOP regains control of the congress again to make it permanent. the middleclass is the mark in the duopoly’s con job.
Nahant Surtt maybe its invested 50/50 in outsourcing jobs and the fun stuff? :)
That begs a question, which turns out to be irrelevant but which is still required because it leads to the correct question: Why isn’t our message getting through to Congress?
That’s the irrelevant question, but leads to the question I think is more pertinent: How does an elected politician maintain a delusion or rationalization that enables him/her to be on the take even when it brings misery to the people?
totally
Well I’m confused because Robert Gibbs said a veto would not be necessary because Obama’s version will pass.
Read about it here: http://www.cbsnews.com/8301-503544_162-20015994-503544.html
Yes, aren’t these the amazing morphing power ranger tax cuts?
First in 2001, these were because the Feds were in danger of paying off the debt.
Then they were because we’re in a recession.
Now it’s because were in a depression (or the Great Recession).
But we’ve had these wondrous, all purpose, cure all tax rates for ten years now, and in that whole time, the real economy has pretty much sucked.
But the rich have gotten VERY RICH.
Path of least resistance? I’ll tell you the path of least resistance.
Congress gives all it’s power to the exec.
Congress goes home.
Oh, that’s already how they behave!
Another let’s have a bigger deficit and cut Medicare and Medicaid and Unemployment Insurance, so those making over 250k a year don’t have go back to the 2003 tax rate. Vote em out of office.
If Obama continues the Bush tax cuts that is just one more broken promise in my view.
Isn’t this the asshat who said we didn’t need any more stimulus because his state was doing just fine? How much better than 5% unemployment does he think it’s going to get, and why should I in California have to pay for that? To use his logic, such as it is…
What the heck are you talking about? The cap gains tax is NOT for any particular cohort. And, news flash, most people who make cash dividends are NOT middle class. That was an add on, proposed by the Obama administration, that they want to push through with the extension of Bush’s tax cuts for the so-called “middle-class”. Actually, though, the wealthy stand do fair far better under these “middle-class” tax cuts in dollar terms than the actual middle class(and this is without the proposed cap gains cut):
http://www.openleft.com/showQuickHit.do?quickHitId=15792
Did you really think a dividend tax wouldn’t apply to the wealthy? LOL, who do you think makes dividends?
Actually, alot of them are not spent on anything at all. The wealthy spend less expendable income than the rest of us. They basically will just hoard the cuts.
The trouble is that the Republicans are already out campaigning against the “Obama tax hike”. The GOP has a point that raising taxes in this economy is a bad idea. If the White House were a little more proactive, they would have let all of the Bush tax cuts expire only to be replaced with more progressive Obama tax cuts of equal size.
The best place to cut $250 billion in taxes would be reducing FICA payroll tax rates. Or we could take the $35,000/$70,000 income tax exemption from Alan Grayson’s War is Making you Poor Act (costed out at $159 billion, linked below). Then put the $91 billion or so remainder into Medicare Part B– currently funded 75% general revenue, 25% Medicare recipient– to reduce monthly premiums. Since Part B premiums are simply deducted from recipients’ Social Security checks every month, lower premiums would be a de facto SS benefit increase without having to touch the SS trust fund.
Here’s Grayson’s tax proposal:
The bill eliminates all federal income tax in 2011 for everyone making up to $35,000 a year ($70,000 for a married couple), which is approximately one-third of the population. For everyone, the first $35,000 that he or she earns each year ($70,000 for a married couple) is tax-free.
http://grayson.house.gov/News/DocumentSingle.aspx?DocumentID=186961
Path of least resistance?? What kind of complete crap is that?? Obama should VETO ANY BILL – ANY BILL – that extends Bush 2% tax cuts regardless of who says what and how loud they scream….
This is a COMPLETELY false narrative…only one sponsored or supported by rethuglicans only…
you are so cordial.
here is what the heck I am saying:
Of course, there are middle class folks with small stock holdings or small dividends from a stock or mutual fund. You dont have to be rich to have some investments.
Seniors living on social security and a few thousand dollars in dividends from the utility they bought years ago should not have those taxed at the same rate as those with AGIs of 250k+.
that is what the heck I am talking about:
If you make more than 150k or 250k for a couple, you do NOT qualify for any special dividend and cap gains rates.
How is that?
Clear?
Yes, there is a God and He does have a sense of humor.
Here we have what is supposed to be the smartest people on earth and all they know how to do is follow stupid old Bush’s policies on almost every issue.
Guantanamo – evidently the Democrats are so stupid they have to follow along with what President Bush started.
The Obama wars – an extension of the Bush wars only more deadly.
The evil Bush tax cuts now being endorsed by more and more Democrats because their own ideas can never work.
Pollution – Whoowee! Obama set the record in the gulf.
Foreign policy – Mr Kowtow has not accomplished anything and won’t accomplish anything no matter how many times he circles the globe kowtowing and apologizing.
The border is less secure today than ever AND is breeding real contempt for the Federal Government among a growing list of states.
By every measure the Democrats in all three branches of government failed miserably and the American voters are mad. Very mad.
Jobs should have been the NO 1 issue from day one but Obama never cared about jobs, never had one himself and never saw a reason for one, so he did nothing to get the American people working again. Tsk tsk.
Had the Democrats been able to reduce unemployment they could have gotten by with the rest of the issues they flubbed but Americans don’t like being unemployed and won’t forgive those who are in power.
That is the bottom line and the Republicans had better remember it.
Path of Least Resistance”
yep – the only path for our President Obama given his lack of a backbone and low level of courage.
You are so completely wrong. First, dividends taxes are for cash dividends, NOT mutual funds. Second, must senior citizens, I assure you, do not earn cash dividends. Finally, there is NO CAP for the cap gains tax break. Indeed, that would defeat the purpose. Where are you geeting this from?
Also, you are mixing extension of income taxes with cap gains. It is the income taxes that will be extended for the FIRST 250k in income. NO ONE is excluded. That’s not how income taxes are paid. It is the tax breaks targeted at income over and above the first 250k that will not be extended.
Obama in a nutshell: corporate citizenship and the political path of least resistance. The antithesis of change.
Interesting how Ohio’s Sen. George Voinovich has found his fiscal and political guts now that he’s leaving office for good.
Those tax cuts for the Rich created jobs. All of those jobs were created in China but that is beside the point.
Sorry son, but we’re talking about the Clinton tax rates.
I
Guaranteed third world status in a decade if this passes and above Senator speaking can claim honor along with corporate RE-DEMs to get the country to that state.
Any third world country which wants to become part of first world has to implement Progressive Taxation. That is the only way they can come out of the cycle of poverty. They have to realize the debilitating habit of relying on VAT taxes is bad so that they can tax ones who can afford to pay the taxes to renew and also create new shared resources.
What did high-end Progressive Taxation under Pres. Eisenhower get us:
1. Biggest Economic Expansion after a global war never before or after fought in human history. Compare to the tiny war we are fighting now in a tiny country.
2. Trained and college educated all returning soldiers. I am talking millions of soldiers here.
3. Biggest middle class and most egalitarian society of any time with Janitor proudly living next to a Doctor.
4. People with Hope and dreaming of making world and country better. Eg. People dreaming of making highways beautiful and more pleasant to drive through etc. Now people worry of keeping their jobs while driving hoping they are not outsourced to totalitarian regimes in another round of super investments by their leadership.
5. Made sure with financial and material support our former enemies are back on their feet and do not hold any grudges later that we won. Mistake of world war I finally corrected for good now.
6. Vast Highway system to make our economic engine worlds best.
This attempt at tweaks looks like another bait and switch starting with tax cuts for middle class (public option version) in this tax debate.
Congress for the sake of country in my opinion middle class will make the sacrifice as usual. Please get into Gridlock and let those tax cuts expire as it is and lets return taxes to Pres. Clinton levels. Country cannot afford another rounds of lobbyist guided tweaks of the already messed up progressive tax code.
I hope both Republicans and Democrats do not touch social security for their own sake and for their childrens sake besides their constituents. Social Security is the only thing which makes our economy Depression-Proof. There is a reason why it was created by the people who saw the ravages of Depression, did not want their children to go through those horrible times. If these children are stupid not to recognize the value of the gift they received and are willing to trade it away for candy of campaign contributions or corporate positions then we cannot say more and hope God help us all.
During Republican watch Wall Street bluffed the Depression card on the table of Poker to Congress to get Bailout Bonanza and if they touch Social Security in spirit of bipartisanship Wall Street will be holding the Depression card for real. No more bluffing.
Social Security makes our Economy Depression Proof and I hope congress does the best thing possible in this situation till a better congress with less of susceptibility to lobbyist influence comes along which is get into a grid-lock regarding this issue of social security.
Why did high taxes under FDR produce jobs and get us out of the Great Depression? Because FDR used the money to create jobs.
Let me complete the above line to state implied meaning explicitly:
Why did high taxes under FDR produce jobs and get us out of the Great Depression? Because FDR used the money to create American (Not some easy tax free profit bucks totalitarian country) jobs.
Looks like the Cat Food Commission will be asked to cut Social Security more so they can extend the Bush tax cuts for the wealthy.