Posts Tagged ‘expire’

Scared Democrats Admit Bush Was Right On Tax Cutting Policy

September 5, 2010

More and more Democrats are admitting that increasing taxes on the rich people who actually create jobs would be a foolhardy thing to do.

That pours a big giant can of water on the fire Democrats started in the whole blame-Bush-for-the-economic-meltdown thing.  Bush’s tax cuts were the biggest straw man for Democrats.  And now some of the most prominent Democrats are saying we need to keep those same tax cuts that Democrats were universally demonizing only months ago.

More Dems buck plan to let taxes increase for rich
By STEPHEN OHLEMACHER (AP) – 1 day ago

WASHINGTON — Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans.

Worried about the fragile economy and their own upcoming elections, a growing number of Democrats are joining the rock-solid Republican opposition to President Barack Obama’s plans to let some of the Bush administration’s tax cuts expire.

Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party’s majority in the House and Senate.

“In my view this is no time to do anything that could be jarring to a fragile recovery,” said Rep. Gerry Connolly of Virginia, a first-term Democrat. […]

“It’s going to be hard to resist a one-year extension for everybody, given the state of the economy,” said Clint Stretch, a tax expert at the consulting firm Deloitte Tax LLP. “That’s where I think the ball is moving.”

The tax cuts were enacted in 2001 and 2003 under President George W. Bush. They provided help for both rich and poor, reducing the lowest marginal rates as well as the top ones and several in between. They also provided a wide range of income tax breaks for education, families with children and married couples.

Taxes on capital gains and dividends were reduced, while the federal estate tax was gradually repealed, though only through this year. […]

Another freshman Democrat, Rep. Bobby Bright of Alabama, said he would like to see all the tax cuts extended for two or three years, if lawmakers cannot agree on a more permanent plan.

“Party leaders are not my directors or my boss,” Bright said. “My boss is my constituents, and I’ve heard from a vast majority of my constituents that they don’t believe in tax increases on anybody at this point in time.”

Bright is high on the re-election endangered list, one of roughly four dozen Democrats in districts won by Republican presidential nominee John McCain in 2008.

In the Senate, where Democrats need unity and at least one Republican vote to overcome filibusters, at least three Democrats and independent Joe Lieberman of Connecticut have said they want to extend all the tax cuts temporarily.

Several Democratic candidates for Senate have also come out in favor of extending them all, including Robin Carnahan in Missouri and Jack Conway in Kentucky.

“Jack Conway was in favor of the Bush tax cuts when they first passed (in 2001 and 2003), and he’s in favor of extending the Bush tax cuts now,” said spokeswoman Allison Haley.

An article in McClatchey Newspapers points out that if Democrats try to hike taxes on the rich, it will be Democrats who stood in the way:

Democrats unlikely to repeal tax cuts for the rich
By David Lightman | McClatchy Newspapers

WASHINGTON — Democrats in Congress are poised to play a leading role this month in thwarting their party’s effort to raise income tax rates on the wealthy.

Tax cuts enacted in 2001 and 2003 expire at the end of this year. President Barack Obama and Democratic congressional leaders have been eager to extend the breaks for individuals who earn less than $200,000 annually and joint filers who make less than $250,000. Those who earn more would pay higher, pre-2001 rates starting next year.

However, a small but growing number of moderate Democrats are balking at boosting taxes on the rich. Many face electorates that recoil at the mention of any tax increase. Some represent areas that are loaded with wealthier taxpayers. Further, some incumbent senators who don’t face voters this fall are reluctant to increase taxes on anyone while the economy remains sluggish.

Without their support, the push to raise rates on the rich probably will fail. […]

Many Democrats and Republicans are eager for a tax cut battle, seeing it as emblematic of each party’s economic principles.

“Now the administration is calling for a massive tax hike on small businesses in the middle of a recession,” said Senate Republican leader Mitch McConnell of Kentucky, who maintains that higher rates on the wealthy would hit small business hard, a point the Obama administration disputes.

“So it’s no surprise,” McConnell added, “that most Americans think the country is on the wrong track and that Democrat policies have failed to do anything to fix their top concern, the economy.”

Democratic leaders are convinced that voters won’t buy that argument. Not only will the public back higher taxes for the rich, but “we have an opportunity to generate $700 billion that could go to deficit reduction and badly needed programs,” said Rep. Raul Grijalva, D-Ariz., a co-chairman of the House Progressive Caucus.

The middle class-only extension is thought to have strong support in the House, where Democrats have a huge majority, but some Democrats are reluctant.

Rep. Gerald Connolly, D-Va
., represents the northern Virginia suburbs of Washington, one of the nation’s wealthiest districts. Median family income there in 2008 was $117,892, well above the national average of $63,211. He said that repealing the top rates would have political consequences.

“Sometimes we forget how we became the majority. We did it by winning some affluent districts,” he said.

The bigger problem for Democrats looms in the Senate, where Majority Leader Reid’s immediate problem is getting the 60 votes needed to cut off debate on the measure. Democrats control 59 seats, and at least three of them — Bayh, Ben Nelson of Nebraska and Kent Conrad of North Dakota — have signaled that they won’t back a permanent repeal of the tax cuts for the wealthy.

They suggest a way out of a stalemate — temporarily extending all the expiring tax rates — but so far the leadership isn’t going along.

Sean Neary, a spokesman for Senate Budget Committee Chairman Conrad, said the senator backed such an extension “for now.”

“The general rule of thumb is that you do not raise taxes or cut spending during an economic downturn. That would be counterproductive,” Conrad said.

Nelson also offered what’s become the centrist Democratic mantra. He, too, said he’d back extending the tax breaks for the wealthy “for at least a period of time because raising taxes in a weak economy could impair recovery.”

That stand could be even more popular with Democratic candidates for the Senate who aren’t incumbents
. The hottest races are in conservative states, such as Kentucky, where Republican Rand Paul and Democrat Jack Conway are battling for the seat now held by Republican Sen. Jim Bunning.

Of the expiring tax cuts for the wealthy, Conway spokeswoman Allison Haley said that he “believes we should extend them now, especially when so many Kentucky families and small businesses are struggling under this recession.”

In Missouri, Republican U.S. Rep. Roy Blunt and Democrat Robin Carnahan are in a tight race. Despite a welcoming embrace with Obama at a Kansas City fundraiser in July, Carnahan said last week that she wanted to extend the Bush tax cuts for everyone.

“Now is not the time to raise taxes,” she said.

In Indiana, U.S. Rep. Brad Ellsworth, D-Ind., who’s seeking to replace Bayh, told the Evansville Courier & Press this summer that all the Bush-era tax cuts should become permanent
.

That position makes sense, said Brian Vargus, a professor of political science at Indiana University-Purdue University Indianapolis, because Indiana is “an overwhelmingly Republican state … and there is never support for taxes or public goods.”

So from this article we see the term “moderate.”  And the moderates are those Democrats who see a compromise to the looming war over tax cuts: keep them all for now.  Don’t hike taxes on the only economic class of Americans who have the wherewithal to actually create jobs.  Keep the the tax cuts for at least a year, if not 2-3 years.  But the hard-liner Democrats are willing to see the tax cuts end for EVERYONE in order to maintain their Marxist class warfare principle of punishing the rich for being successful.

Democrats offered two reasons in their unrelenting demagoguery of George Bush: 1) they said the tax cuts caused the economic disaster; and 2) they said Bush’s refusal to regulate caused the economic disaster.

But 1) is now blown apart, given DEMOCRATS’ current acknowledgment that the Bush tax cuts – yes, even for the rich – weren’t the bogey man Democrats have been saying.

And 2) suffers from the flaw that Bush DID try to regulate the entity most responsible for the meltdown that befell the economy in 2008, and the ONLY reason that entity was not reformed and regulated was because DEMOCRATS blocked Bush at every turn.

That entity was the Government Sponsored Enterprise, or GSE, commonly known by the brand names of Fannie Mae and Freddie Mac.

It was Fannie and Freddie that expanded and ultimately exploded using dangerous subprime loans (see also here).  It was also Fannie Mae and Freddie Mac who bundled thousands of bad and good mortgages together into instruments called “mortgage backed securities” and sold them to the private sector.  And when no one could separate the good from the bad, uncertainty paralyzed the banking system and led to the crash.

A brief history of the mortgage meltdown reveals how it was the GSEs acting under Democrat policies that created the housing bubble – (and even Obama economic shill Christina Romer admits “the popping of the housing bubble had serious consequences” which “destroyed $13 trillion of wealth in 2008”) – and the corresponding mortgage crisis which imploded our economy:

In 1999, under pressure from the Clinton administration, Fannie Mae, the nation’s largest home mortgage underwriter, relaxed credit requirements on the loans it would purchase from other banks and lenders, hoping that easing these restrictions would result in increased loan availability for minority and low-income buyers. Putting pressure on the GSE’s (Government Sponsored Enterprise) Fannie Mae and Freddie Mac, the Clinton administration looked to increase their sub-prime portfolios, including the Department of Housing and Urban Development expressing its interest in the GSE’s maintaining a 50% portion of their portfolios in loans to low and moderate-income borrowers.[10]

As noted, subprime mortgages sky-rocketed during the initial era of loosening of terms throughout the 1990’s. From a low of 5% of mortgages in 1994, to 14% in 1997, to 23% in 2005, subprime mortgages continued to boom in the early 2000’s. Following the 2004 initiative policy change spearheaded by a U.S. Securities and Exchange Commission (SEC) decision to allow the largest brokerage firms to borrow upwards of 30 times their capital, subprimes became an even greater investment vehicle for investment banks and institutions in the U.S. and around the world. Since 1994, the securitization rate of subprime loans has increased from approximately 32 percent to nearly 78 percent of total subprime originations.[11] This further exposed the financial community to the effects of the coming housing bubble.

Democrat policies created the housing bubble that Christina Romer acknowledges was the cause of the destruction of the US economy.

And the refusal of Democrats to reform and regulate Fannie and Freddie exploded that bubble.

Bush warned SEVENTEEN TIMES that we needed to reform Freddie Mac and Fannie Mae or have an economic disaster on our hands.  John McCain urged action to avert an economic disaster.  And Democrats refused to budge to deal with the monster they created.

Again, Bush was right.  Democrats were profoundly wrong.

The mainstream media propagandists refused to report the truth.  They kept broadcasting a lie, and naive and frankly stupid Americans rewarded the Democrats who created the economic disaster with total power.

And we’ve been paying for that stupidity for the last two years.

As of today, Obama is at a dismal 42% approval, and in danger of plunging into the 30s.  45% of Americans now strongly disapprove of Obama, versus only 24% who still strongly approve of the job he’s doing “fundamentally transforming” our economy into a pre-industrial barter system.

Obama is in full meltdown mode as all of his campaign rhetoric is being revealed for the lies it always was:

And Democrats are deservedly going to meltdown right along with him.

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Obama’s Backdoor Taxation And The Coming Consequences Of Obamanomics

February 2, 2010

Remember Obama’s ubiquitous campaign pledge that 95% of Americans wouldn’t see their taxes go up one single dime? Oops.

Reuters ran a story that they titled, “Backdoor Taxes To Hit Middle Class.”  The Obama administration whined, pleaded, threatened, and intimidated Reuters to the point that Reuters took the story down.

Fortunately, the International Business Times is running pretty much the story under the same title:

Backdoor taxes to hit middle class

By Terri Cullen
01 February 2010 @ 06:16 pm ET
Next Politics & Policy Article

NEW YORK – The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.

The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a “patch” that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.

Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;

* The $250 teacher tax credit for classroom supplies;

* The tax deduction for up to $4,000 of college tuition and expenses;

* Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;

* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.

Notwithstanding that punishing the rich actually punishes the poor by punishing economic growth (the poor get their jobs because the rich create them, rather than vice versa), it was always a lie that Obama was only going to tax the rich.  People like me were pointing that out throughout the 2008 election campaign.

A couple examples:

Obama-Biden Will Come After Middle Class With Taxes

Obama WILL Raise Your Taxes And Your Living Costs

That Obama’s promise to tax only the rich was such a transparent lie that even the biased leftist New York Times reported on it.  The final paragraph in their article entitled, “Obama’s Pledge to Tax Only the Rich Can’t Pay for Everything, Analysts Say” reads as follows:

“There is no way we can pay for health care and the rest of the Obama agenda, plus get our long-term deficits under control, simply by raising taxes on the wealthy,” said Isabel V. Sawhill, a former Clinton administration budget official. “The middle class is going to have to contribute as well.”

The Wall Street Journal expressed the same point better (as usual) in analyzing Obama’s tax and spend demagoguery:

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.

The WSJ goes on to say:

as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

We voted for a liar based on the huge pack of lies he offered us.

If you actually believed Obama’s “hope and change” that you would be able to get a free ride as Someone Else picked up your tab forever, you are a genuine fool.

Joe Biden summed up the Obama populist demagoguery by suggesting that paying excessively high taxes was the “patriotic duty” of the rich – which basically means that the middle classes and the poor either aren’t patriots or that they have no patriotic duties.

Liberals talk about “fairness,” as though its somehow “fair” that nearly half the country pay should pay no federal income taxes at all, while 1% of the American people should be compelled to pay 40% of all federal income tax.  They think it’s “fair” that the top 1% of earners pay more in taxes than the bottom 95% of Americans COMBINED.

This is America, where you have the right to sit on your fat ass while someone else works for the bon bons you stuff in your face while you vegetate in front of the boob tube.  Why SHOULD you work when you can saddle that burden on Someone Else?

Rich people study harder in their formative years.  They postpone prosperity longer to pursue more college education.  They work longer hours.  They save more.  They pursue jobs that are more demanding and more stressful. They invest when others consume, and then consume some more, and then some more.  And when they finally start to achieve, Mr. or Ms. bon bon feels entitled to confiscate their prosperity and redistribute it to the do nots.

And that’s “fair.”

Well, under Obama, your “fairness” is going to come home to roost.

Obama is considered “anti-business” by a whopping 77% of investors. whose investments stimulate economic growth.  Obama has gone to war with the U.S. Chamber of Commerce whose businesses create jobs.  Obama has gone to war with the banks that lend money to businesses.

Many businesses simply afraid to hire new workers because of Obama’s new taxes and rules, and the sheer atmosphere of doubt that he’s created.

We  are descending into a command-and-control economy with the government pulling the strings, according to a study.  And that is going to have severe consequences.

On top of Obama’s approach of punishing and discouraging businesses and investment, Obama took the Democrat Marxist-based economic philosophy of redistributionism and ran with it so far down the field that we could never hope to pay for it by taxing the rich even if we sucked them all dry.

Obama is spending vastly more money as a percentage of GDP than FDR ever did.  All of this spending is doing little to stimulate the economy (and what little it IS doing is both artificial and temporary), and the American people are going to have to pay dearly for all this never-before-seen-in-the-history-of-the-human-race spending very shortly down the road.

Now Mr. Middle Class and even Mr. Minimum Wage is going to have to pay for Obama’s massive government excesses, too.  Or else the whole Ponzi scheme we call our federal government will fall apart.

This hearkens to the words of Michelle Obama:

“Barack Obama will require you to work. He is going to demand that you shed your cynicism. That you put down your divisions. That you come out of your isolation, that you move out of your comfort zones. That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”

I see those words, “Barack Obama will require you to work,” and I see a bunch of communist proletariats in a mandatory labor pool squatting over their forced labor.

I came across an article entitled, “A New Slavery: Forced Labor, the Communist Betrayal of Human Rights.”  Oh oh.  Barack Obama isn’t the first Marxist who ever decided to “require you to work.”

Obama has created such gigantic deficits through his gigantic “government as God” approach that we will have unsustainable trillion dollar deficits through 2020.

Barack Obama will require you to work,” Michelle Obama assured us.  “Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”

That means no more boob tube and bon bons for you, Obama voters.  Get off your fat, lazy, worthless asses and work off your Dear Leader’s deficits.

Don’t wait for Obama to start a forced labor camp in your neighborhood.  “Move out of your comfort zones” and start one of your own.  Maybe you cold begin by collecting your family’s feces to produce Toebee (compost) like the other Dear Leader requires his people to do in North Korea.