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It’s amazing that Republicans are about to get away with calling the extension of the entire Bush tax cuts a “compromise.” But that’s what’s going to happen. Here’s incoming House Budget Committee Chair (shudder) Paul Ryan.
Rep. Paul Ryan (R-Wis.) said that some sort of compromise is in order, such as a temporary extension of one or two years.
“They control this in the lame duck. It’s much better if you do this in the lame duck. If you go after the first of the year, after tax laws and tax forms have been changed and printed, it’s really ugly. It’s bad for the economy. It’s bad for jobs,” Ryan told MSNBC. “Get it done now. I understand it’s not going to be permanent like we would like it. But get it done in the lame duck. It’s better for the entire economy.”
Let’s be clear: Republicans don’t want a permanent tax cut extension. This is working out just fine for them. In another year or two, they’ll join this debate again, talk about nonsense like uncertainty and small business costs, and bend Democrats to their will again, making their supporters pleased and dampening the spirits of the other side. If they finished with the issue with a permanent tax cut, they wouldn’t have anything to demagogue down the road.
So this temporary extension, which essentially operates like a permanent extension, will come to be seen as a “deal.” But it’s the direct opposite of what Democrats all over the country have been running on for the past seven-plus years, since the passage of the 2003 tax cuts. Democrats are now bargaining off that, looking to add a bracket and raise rates over $1 million dollars of income, or to use the tax cut for the rich on business tax cuts, or even to extend the Making Work Pay tax cuts that have been in place the past two years, through small decreases in weekly withholding. But none of these compromises get around the facts that Democrats are about to fail to deliver on a signature campaign theme over four straight cycles. They may not even get anything back in the “deal.”
Incidentally, with all the hubbub about the budget deficit, it’s important to point out that most of the savings from the Bowles-Simpson cat food commission report could also come simply from all the Bush tax cuts expire. It would be a one-page recommendation. If you just want to confine it to allowing the tax cuts on the rich to expire, you’d get more than half the way there. Yet that’s not how anyone who thinks themself qualified to opine on the budget deficit sees it.
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I have been wondering why this debate has not been framed in terms of how much money we are talking about for typical individuals according to income brackets. It seems to me that the “wealthy versus the middle class” argument plays into republican style sound bites. Are we talking about percentage of income changes, like $300 to a family of four making say $60k a year versus a guy making $400 million keeping an additional $400k? If we framed the conversation like this I think it would get a very different reaction from the working class. Do you know typical dollar amounts by income?
This is almost too painful to watch. Like a slow motion train wreck. Dems defeating themselves while they still hold the majority in both houses of Congress and the White House.
I had an analogy to a sports horror in the back of my mind (like watching your team give up 59 points on Monday Night Football), but this is so much worse. This is the final showdown for the Dems for the 2010 season. They could at least go out with a significant win to show they did know after all how to use their majority control to benefit the middle class. (No, not by continuing low tax rates for the middle class, but by taxing the wealthy motherf**#@&s to protect the middle class safety nets of unemployment ins., Social Security, Medicare, Medicaid ….)
If the Dems negotiate against themselves and manage to lose this issue, while loading another trillion onto the national debt to pay off the billionaires and millionaires, there is no purpose to the Democratic Party. They have no social utility. They are obsolete. They are defunct. They have gone to meet their maker …..
Moving this forward from “The Roundup”. Timmy has spoken.
You are very close on your figures. Best expressed by this chart: http://www.washingtonpost.com/wp-dyn/content/graphic/2010/08/11/GR2010081106717.html
In response to bittersweet and David Dayen, bittersweet was quite off.
Someone making $400 million a year would be getting a $16 million tax break, not $400k (off by a factor of 40). (Top bracket under Clinton for income was taxed at 39%, now its taxed at 35%. Neglecting this first 0.35 million, the $400 million is taxed at 39% would be $156 million; while taxed at 35% it is only $140 mil.) That said, no one really makes $400 million in a year (especially as income; capital gains are only taxed at 15% (under Bush tax cut; 20% under Clinton) to partially compensate for the risk inherent in investment). But a CEO or Wall St type making $20-$100 million a year would be saving $0.8 to $4 million a year, while the typical family would save $1000-2000 a year.
Also remember that the rich don’t pay SS on income over 106.8k, so the rich already have a 6.8% tax discount over what the progressively increasing marginal tax rate says they are paying.
Thank you David and, ah no name? Thank you both for your responses. This is exactly what I was talking about. To the average listener, a tax cut for all seems somewhat fairs fair. But hearing the actual numbers involved creates a a totally different response. Hearing a Republican state that he wants to save millionaires millions, is different than buying into the MSM framing that it is simply tax fairness across the board. It certainly shows whose pocket they are in.
I wish we could hear more framing of the question in this manner.