Well, this is a bit unexpected. OMB Director Jack Lew strolled into the White House briefing room and laid out the plan to pay for the American Jobs Act, and it’s entirely from ending tax breaks for rich people and corporations.
Among the offsets suggested by Lew:
• New limits on deductions for income over $250,000. This would raise $400b over ten years.
• New formulas for taxing the income of hedge fund managers’ could raise $18 billion.
• Oil and gas measures, Lew said, would raise $40 billion.
• Limiting tax deductions for corporate jets would raise $3 billion.
These steps have all been suggested before by the White House: the limit on deductions was initially part of their plan to pay for the health care bill. And ending carried interest nearly happened last year. This adds up to $461 billion, more than the estimated $447 billion price tag of the American Jobs Act. Most of it is from that deduction limit – the corporate jet inclusion just makes for a nice talking point.
These kinds of pay-fors would be the least harmful to the economy, since they would come at the expense of wealthy people and corporations who would be unlikely to alter their purchasing behavior as a result. If you’re going to pay for the spending over time – and while the AJA has a 1 to 2-year window, the tax offsets are all in a 10-year window, so you’re talking about higher near-term deficits smoothed out over a decade – this would be how you’d do it.
But the vast majority of these pay-fors, including the limit on itemized deductions and ending the carried interest loophole, failed in the last Congress, when Democrats held the House. The proposals are a populist rallying cry, but they’re not the kind of offsets you would propose if you expected the bill to pass.
What this signals is that the American Jobs Act is an aggressively political document: spending money to create jobs, paid for by ending tax breaks for those who can most afford it. It also happens to be the correct move for the economy, but obviously House Republicans are not going to remove themselves as human shields from the rich or corporations. So the bill offers a choice – we can help people get back to work and raise GDP growth, or we can do nothing and allow millions to suffer at the expense of the rich and corporations. That’s certainly an improvement over the fears that safety net cuts would be the price for this improvement in the near-term jobs picture.




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This is great news.
Tell me why this is not on the homepage?”
What great news.
What is Boehner going to say to the OMB director now?
This is a pleasant development. But the MSM is going to have fits because this doesn’t fit their shared sacrifice narrative. Don’t be surprised if the WH walk this back.
Agree, a “walk back” is a huge concern.
My wild-a$$ guess is that the liberal progressive blogs are understandably invested in blocking the WH’s attempt to run against Perry.
Applause to Jack Lew for trying, anyway. I guess it’s too much to expect the WH to push this by taking it directly to the American people with full fanfare, urging their vigorous support.
As a negotiation strategy, this is, for once, the right place for the administration to start.
“My wild-a$$ guess is that the liberal progressive blogs are understandably invested in blocking the WH’s attempt to run against Perry.”
Given that the post time is less than 30 minutes before this response, I would submit it’s much more likely that nobody with the power to front page it has seen it yet.
Boxturtle (Don’t think Jane would kill one of Dday’s posts just because it was pro-Obama)
Just saw this clip of Obama’s press conference on this. He did urge the American people to demand passage of the bill. Wow.
Here, here!
I hate to be cynical, but I am. Unless he brings in the governors and all Dem legislators and sends them out on a mission to sell this thing or come back on their shields, I’m not buying it.
Otherwise, it is going to be slashed to pieces but he will be able to say to the progressives, “See, I tried”.
I’ll believe what I SEE and nothing else. Measures like this have been “suggested” before, and then: poof! Up in smoke. We can all *rely* on the corp-owned rightwing propoganda machine to pump up the nonsense that measures like this will result in US richie-rich folks not creating jobs for US serfs, yadda yadda. And Tea Partiers will go ballistic at the mere mention of raising anyone’s taxes, much less the precious taxes of the vaunted rich folks.
So, wake me when it’s a reality. Move over Rip Van Winkle…
I think that is EXACTLY ObamaLLP’s plan.
Boxturtle (Perhaps if I say something mean about Obama, this’ll get frontpaged. :-) )
And it IS on the front page now. Right after I said something mean about Obama.
Boxturtle (Hmmmmm…..)
Me too, but the urge to get out in front of these things is so…
Why do I suspect that the biggest component of those lowered tax deductions for folks making over $200K comes in the form of eliminating the home mortgage tax deduction.?
Remember, in a lot of areas with high costs of living, $200K in gross income isn’t all that much. (Sure, it’s not like folks scraping by on $30-$50K) but it makes you a long way from rich. But more importantly, once that mortgage interest deduction goes away, a lot more people are going to find themselves tripping over the threshold into that $200K taxable bracket. And whattya bet, this isn’t indexed either, so over time it becomes the AMT all over again?
So many ways to capture so much more money, and this — which probably won’t pass anyway — is what we get?
Raise $467 bil, huh? Eliminating the Bush/Obama tax cuts would raise $4 trillion over the same period.
I’m unimpressed.
Yep. Wait and see how it plays out……..
It’s front-paged now, klynn. Yay!
You’re being realistic, not cynical, when there’s a factual record of Obama’s actions. Don’t forget that he’s in “campaign mode” again.
Yes, but your $30k to $50k taxpayers would get hit with 15% to 20% higher taxes too.
WelshTerrier2 had an interesting diary: http://my.firedoglake.com/welshterrier2/2011/09/11/robert-reich-a-healthy-dose-of-truth-telling/
H/she wrote about something I had never considered before, (on EDIT, in the comments) seizing the excess wealth of the very richest. “The problem is that there is too much wealth and power in the hands of a very few; the only way to change that is to take away their excessive wealth until they can wield no more power than the rest of us. It doesn’t seem that complicated… or that extreme.”
EDIT in the comments
When I thought about it, it didn’t seem that extreme to me, either.
Very good point.
We can’t wait and see. Whatever the reservations- these are minimum changes required to begin.
It seems that Obama’s jobs proposal includes accelerated depreciation (a tax break) for the purchase of corporate jets. Well, those aircraft mechanics need jobs too.
Show of hands, who believes 0bama won’t be all about the ponies now knowing they’ll never have to be delivered?
0bama is attempting to Short Sell the public’s confidence in government.
When the Congress can’t deliver and there really never was a plan to deliver those fine equines, Congress takes the hit. 0bama’s investors know it was just pillow talk, how that game is played, so never a worry their ill gotten gains were in jeopardy.
I’d argue next to no one here is more cynical about average Americans and our futures then this President.
Maybe this time he means it? ;)
Be worth it. The little folks would pay a little teeny bit more, and the rich would pay gazillions.
#22
What if China, India and all the countries in Africa had that idea about US.
The average yearly wage worldwide is about $9000. This makes most Americans “the very richest”.
“The problem is that there is too much wealth and power in the hands of a very few [Americans]; the only way to change that is to take away their excessive wealth until they can wield no more power than the rest of us [the world].”
Let’s say someone forced you to live on $9,000 a year. Does it seem that complicated… or that extreme now?
Chump change you can’t believe in!
Election season must truly be upon us.
“To know what people really think, pay regard to what they do, rather than what they say.”-Rene Descartes
Dubito ergo cogito; cogito ergo sum.
We have much use for their skills in the new National High-Speed-Rail System Initiative.
We’re all living on the reservation now.
-average americans anyway
I have diaried here about a wealth tax – kicking in at 5 million (1%) and going to 20% annual on accumulated wealth above a billion bucks. Surprisingly little interest.
I still support it however, and will probably diary it again, but if it doesn’t sell here, it’s gonna be a tough go.
So, the Republicans will drop all the tax cuts for the million-billionaires and what will be left to enact?
Why the Medicare cuts, and whatever else will suck the marrow out of the bones of the little people.
That will be the “compromise,” as Obama well knows.
#28
Once we have achieved a truly representative government here, which will never be possible with the obscenely lopsided wealth distribution, perhaps we will be able to begin to address that very issue.
This isn’t going to happen. There is no cause for celebration, as it does nothing to help the 12+ million who are looking for work and the other 10+ million who have stopped looking.
This is nothing but political theater, style over substance.
I hope you will indeed diary that again, and I look forward to reading it. Thank you for your efforts.
Yes, it is a political document – for show. Watch Obama make some “Grand Bargain” where he raises the Medicare age instead in order to pay for it because the Republicans aren’t going to break their own promise on “raising taxes” (I don’t consider returning to Clinton-era taxation to be a tax increase since the current tax rate is supposedly just temporary). Afterall Obama is leaving this up to the Catfood Commission to pay for, so this is merely a suggestion on his part.
Fair enough.
The nice thing about these payfors is that they wouldn’t (if enacted) do anything to reduce demand, which is the problem our economy is facing
Of course, the problem with the entire program is that at best it will only knock 1 or (the wildly optimistic) 2% off the unemployment rate.
At best, 7.1% unemployment is still too damned high. And this is the best Obama can even propose?
Whoopee.
:-)
Seems as though you and Warren Buffett have something in common. You both think you have the right answer, if only you could get someone to force you to do the right thing.
Your favorite hobby-horse. The less wealthy would get hit with a small tax increase, but the nation would “enjoy” more revenue from the super-wealthy. It’s a small price to pay, and speaking as a “small person,” I’m quite willing to pony up my “fair share.” Are you??????
The mighty defender of the Bushobama government defunding scheme is back to the future.
It’s just not true, again with the deception, cherry picking imprecision.
http://www.npr.org/templates/story/story.php?storyId=129605962
0bama despite all his voodoo economics intended the tax collections not change on that bracket of people. While we are borrowing to keep the government functioning, we are enacting policies that actually create more real inflation. So at the cost of a supposed tax break, we find out you really can’t have a free lunch and the wealthy would steal it anyway.
Now, where is the full court press from the Congressional Democrats as well as the President?
Ooooh, I see that Mark Warner has already been talking it down. And some nitwit “senior Democratic aide” has said it is DOA. I want to know whose aide his is. Because his boss is committing political suicide.
#41
Actually, no. No one has ever had to force us to do the right thing as far as supporting the commonweal. We have always voted and encouraged others to vote for local tax increases for schools and infrastructure.
Our experiences living in Sweden and Canada confirmed our belief in the value of a progressive tax system.
I broke my rule about playing with trawls. Done now.
How about if the rest of the world lived on the median US family income? That surely could help US exports.
And maybe this time Lucy won’t pull the football away when Charlie Brown tries to kick it.
I’m starting a pool to see how long it takes The Compromise Kid to back down from the tough rhetoric and hand the Republicans another victory.
Anybody take next Thursday, the 22nd?????
I’ve got $10 on Lucy.
This particular “pay-for” proposal does not exist in a vacuum. It exists in the context of the Super Committee.
Now, Obama asks the Super Committee to pare $1.5 trillion from spending and also pay for the cost of AJA. So the Super Committee needs to come up with $2 trillion.
Obama is engaged in mis-direction here. He’s saying “let’s pay for my jobs plan with new revenues,” while you guys over at the Super Committee still have to cut everything else to the bone.
So if you’re happy that Obama hasn’t said he doesn’t want to cut SS & Medicare in order to pay for his jobs plan, don’t be. He’s just made it that much more likely that the Super Committee will do the job for him.
This truly is the best solution to pay for the jobs Act. If it had been aggressively pushed in 2009 by the president, the same way TARP, health insurance reform to appease the insurance companies and war spending was pushed, we might have been on a better path of economic recovery. Now, it just appears to be a “political” maneuver during an election cycle. This type of rhetoric has been there on numerous occasions over the past almost 3 years now only to find out that back door deals with the opposite results were made. Let’s see how many “blue dog” Democrats arms he twists to get this accomplished.
Wouldn’t “The Great Capitulator” be more accurate than “The Compromise Kid”?
If Obama had pushed against the three programs you mentioned rather than promoting them, we probably wouldn’t need this weak proposal now.
If the citizens in this country realized how much the tax code has been changed to the advantage of the rich and especially the super rich in the past 30 years by aggressive lobbying, all under the guise and rhetoric of “everyone benefits”, they would truly put our economic problems where they belong…on the very wealthy, the political donor class and the politicians who enable them completely.
The super rich have so corrupted our tax code with loopholes or outright changes in the code to favor them whether it is the change to estate taxes, personal use of corporate jets, or the thousands of other examples… they have pushed the tax bill onto the working and middle classes.
Just reading how simple and logical that is, I am absolutely certain it would never happen.
Jack Lew, sweet kid, must be new in town.
The filthy rich did not get that way by accident, and anyone that thinks they will pay more for anything will be more than a little disappointed.
What kind of President and Congress could screw up something so simple and fair?…..Hmmmm.
Right, he doesn’t actually achieve any compromises unless giving the Republicans 90% of what they want is considered a compromise.
Can it be? Can it BE? PBO is starting the negotiating position from the left of the 50 yard line? Put the football down Lucy, I’m ready to kick….
Sure. I only bring up this because most people who want to repeal the “Bush Tax Cuts For The Rich” don’t think it will affect them. If everyone making $30,000 per year is expected to pay 26% more, then I don’t think it’s too much to ask everyone making $200,000 per year to pay 4% more.
That’d be great. To follow your analogy, if everyone in the US made 5x the average salary ($250,000), things would probably be real good around here too.
Not the negotiation, that’s just the sticker price for the rubes.
“repeal”?
Not only are your numbers cherry picked and wrong but your use of the word repeal is also toolish.
The President and Congress needed to do nothing for them to expire.
Got that? I’ll say it slower, e-x-p-i-r-e.
Anyone here single? How about making 30k/yr? Check that number, 26%. Anyone know any deductions that would eliminate the increase even if it were true and I contest it?
0bama has shown one thing he cuts taxes. Yes, indeedy. Don’t pay attention to the mandate thing til later. Back to my point. 0bama embraces cutting taxes and his plan was for 30k/yr was zero change in the taxes. It was an easy lift though and I always thought he would renew the Bush government defunding program, you know, that one that defunds the government when the country is at war and occupations.
This ain’t sh*+ compared to the grand change we were sold in 2008. So imagine how badly backwards were are going to be thrown in 2013 under the same scenario? Sorry, screw me once … after Le Grand Betrayal? How long is that list?
How long do you think it will be before Lew mysteriously resigns “to spend more time with his family.” I don’t see how someone this rational can be allowed to exist in our government. Clearly he’s a member of the professional left and Obama cannot afford to be seen making nice with “those people” or else the Republicans might be mean to him.
Wrt the propaganda about bushoBama payday loans, aka tax cuts.
It’s downright unpatriotic, yes un-American, yeah I said it, to not pay your taxes or scream about your tax bill when we’re at war – continuing the crusades/misadventures, really a bailout for the weapons industries and their employees including politicians. It’s ok to object to how it is spent and exercise whatever power one has, but that is different than objecting to taxes in a time of war, something the politicians don’t even like to mention because people might put 1 and 1 together and not accept the eroding new normal.
Pass the check to the next generation is not a rallying cry anyone should be proud of, but the divine rite of selfishness enables it and all manner of vileness goes about as folksy common sense.
0bama has been mining the blogoshere and listening to what passes for leftwing talk so he can keep up with sounding just enough like THE ONE true liberal when he speaks to us. Like Bush had his coded language and dogwhistles for the right embedded in his speeches, 0bama is doing the very same thing this campaign. I can’t remember the phrase at the moment but after the speech, Thom Hartmann was gushing about a phrase 0bama used.
I wouldn’t make much of anyone sounding more like us as the campaign progresses.
Yes, great opening salvo in a negotiation. But since Obama’s team knows they have no hope whatsoever of even getting a vote on this in Boehner’s house, why not include a bunch of stuff that appeals to your base of supporters who you’ve screwed over for 2+ years. Where were these strong opening policy positions when Obama had a Dem congress and an actual chance for passage of a strong, progressive policy ? He’s a Ronnie Reagan wannabe until proven otherwise.
Sorry for the cynicism, I didn’t used to be like this.
Ding.
Exactly. O is in campaign mode.
He’s misdirecting so he can tell everyone he’s betrayed that he ‘tried’.
Go to the link and plug in any numbers you wish. Not cherry picked. In fact if it were, you could prove me wrong with my own link. From NPR, not some right wing site. Disclosure, I was working from memory – numbers are closer to 23% incr. for 30k and 9% for 250k.
http://www.npr.org/templates/story/story.php?storyId=129605962
So you’re wrong about the cherry picking.
Next, I agree completely about your repeal vs. expire. Except Obama can’t do it himself. Congress makes the law, Obama could veto it. As far as expire goes, if Congress makes a new law, Obama can’t let it expire, he has to sign it, or veto it, so Obama can’t let anything expire on his own.
Then you ask about deductions? I’m sure there are plenty of deductions and loopholes. Is that what you want for both the 30K earner and the rich?
Finally,
This is where you jump the track, maybe not your fault. The original comment at #17 was “Eliminating the Bush/Obama tax cuts would raise $4 trillion”, not a new Obama plan. Obama’s plan wouldn’t raise that kind of money and a new plan wasn’t what we were talking about. Also, Obama’s plan would be just that, a plan, it would have to be put into law.