Why I really hate this deal

[hfojvt]

I am being told the deal is not that bad because it is not that different from where Obama started.

But what if Obama did NOT start at a very good point?

In discussing the deal, Krugman writes this "Obama wasn’t going to let all the Bush tax cuts go away in any case; only the high-end cuts were on the table."

and leaves out the word "very". Becuase the high end cuts were not on the table, only the VERY high end cuts.

As I have said over and over again, Obama's STARTING point was "tax cuts that favor the rich". He started from a point of keeping 78% of the Bush tax cuts and finished at the point of keeping 85% of them. From start to finish this whole business favored the top 30% over the bottom 70%.

Once again, nothing very progressive is even "on the table". It is a battle between Democrats fighting for big tax cuts for the "haves" and Republicans fighting for big tax cuts for the "have mores".

It is what I always said about the Bush tax cuts. They were not just for the super rich, they were for the rich as well. The top 1% got 26% of them, but the top 4% got 13.4% of them, compared to 7.4% that went to the bottom 40%. Which is even more uneven if you look at dollar figures. $10,000 for those close to the top and $241 for those in the bottom.

That is what Obama proposed to keep to help the "middle class". As if members of the top 5% are part of the middle class.

I don't considere members of the top 20% to be part of the middle class either. They are above 80% of the rest of us, and they did well by Obama. 26% of the Bush tax cuts went to the 80-95th percentile. Tax cuts that give over $100 billion to the top 20% and only $15 billion to the bottom 20% are simply not progressive.

That the Democratic Party is embracing them now, shows the dominance of the Reagan ideology of tax cuts, and the Democratic Party's abandonment of the lower working classes.

So, Obama started from a point where he made huge concessions to the Republicans and the rich. Anything better was NOT "on the table".

Then he made even more concessions.

And in return he got - unemployment benefits.

The expiring tax cuts were a sword of Damocles hanging over the Republicans heads. Something which could have been used to protect the big three in future debt ceiling negotiations or that would eliminate future debt ceiling negotiations.

Instead of getting something for his hostages, Obama just snatched the sword away so he can head into February with no leverage. Unless the threat of default is some sort of leverage. It was not worth much in the last round.

In 2010, Obama punted on first down and promised that he would fight next time. With no re-election to worry about, it still looks to me like Obama punted on 2nd down.

Or even reminds me of another Joe. Joe Pisarcik of the New York Giants. Instead of just taking a knee and letting the Bush tax cuts expire, Joe opts to hand the ball off, fumbles, and the other team scores a touchdown.

And now we are supposed to cheer. 85% of the Bush tax cuts got extended!!! Permanently!! What a victory for progressives.

The tax code is much less progressive than it was before Bush and less progressive than it would have been if the Bush tax cuts had been allowed to die.

And now there is no HOPE of CHANGING it.

[Harmony Blue]

1. No I don't agree at all

Taxes will be increased on the top 2%, Pay roll holiday is expiring and in five years time the rest of the tax cuts can be allowed to be lapsed under better economic conditions.


Allowing all the tax cuts to expire along with the pay roll holiday would be too much of a shock to the American economy for middle class families.

A gradual increase in taxes is the most sensible.

[hfojvt]

9. mo, actially taxes were once again CUT for the top 2%

They were increased, not by this deal, but by the expiration of the Bush tax cuts.

Then came the deal to make sure the top 2% got more years of tax cuts. With the deal, the top 1% gets average tax cuts of $18,000 (not including the estate tax cuts). The bottom 20% get average tax cuts of $270, but considering that their average income is $13,900 that means their payroll taxes will go up by $278 and thus they will face an average tax increase of $8.

[leftstreet]

2. Why are you putting this in our beautiful minds?

Sadly you're right, nothing progressive was even on the table

The only place 'forward' from here = spending cuts

DURec

[Harmony Blue]

3. I realize you don't mean it that way

but when the payroll tax holiday is expiring and the top 2% will be taxed more saying nothing progressive was put on the table is extremely misleading.

The only sticking point is the remaining tax cuts, but like I said under better economic conditions this can, and most likely be allowed to lapse in five years time.

[leftstreet]

5. The new Jobs Program will lead to better economic conditions

And the expiring payroll tax 'holiday' will put tons of money in our pockets. Oh wait...it won't

[Harmony Blue]

7. I am probably the most progressive person you will ever meet

and all the liberals I know want the payroll tax holiday to expire (I would argue it wasn't necessary in the first place but what is done is done). It only strengthens social security with the payroll tax holiday being no more.

Now onto your next point... a Jobs program isn't happening with this Congress anytime soon. So, I highly recommend you save the snark for when it is necessary.

[leftstreet]

25. Somehow I doubt that

But in any case, the snark wasn't meant for you personally. Instead for an administration that promised a jobs program and has delivered nothing

You're right about the payroll tax 'holiday' but no one is really arguing that. It was a stupid idea to start with

[JaneyVee]

38. GOP filibustered 3 Jobs Bills.

[LP2K12]

18. Exactly!

Pieces of the puzzle are being viewed instead of the "bigger" picture.

I'm married with two kids. From my pay alone that 6.2 payroll tax is going to eat about $2170 yearly.

Now, let's look at the fact that my employer only has to provide "affordable" health care to me. Not my children or spouse. They just went to only offering HDHP (High Deductible Health Plans). I've got a family deductible of $4000 for anything other than annual checkups and vaccinations. Child gets strep throat? Pay that up front...

Because of the above I opened an HSA. I'm contributing to that to save for any health care costs that arise.

I'm almost considering putting my contributions to my 401K on hold. So far, the change isn't helping people like me.

Let's see what the future brings.

[Harmony Blue]

28. That is why the payroll tax holiday is expiring

but the middle class tax cuts are intact still.

Imagine if the middle class tax cuts had gone away with the pay roll tax holiday...

[LP2K12]

48. Understandable...

It just takes adjustment. Glad I've been saving and budgeting.

[hfojvt]

10. the only thing that lapses in 5 years time

is the tax cuts to the poor - the increased EIC.

The tax cuts for the rich are now permanent.

Unless we can somehow elected a supermajority in the Senate and a Democratic President.

[Harmony Blue]

13. What tax cuts for the "rich" are permanent?

You do realize that taxes on the top 2% is going UP right? Right?

[hfojvt]

26. check out the table on the right side of the last page

http://ctj.org/pdf/bidenmcconnelldeal.pdf

The Biden deal CUTS taxes even for the 1%.

For myself, I define "rich" as "part of the top 20%"

it goes like this

poor - bottom 20%
middle class - middle 60%
rich - top 20%
very rich - top 5%
super rich - top 1%
super duper rich - top 0.1%

including members of the top 20% in the middle class, is just a way to give huge benefits to the rich and call them "middle class benefits".

[Harmony Blue]

27. Sorry I don't agree at all

There is a difference between wealthy and rich. You clearly want to lump people into the same pot that is your choice. And it is also mine to tell you that I vehemently disagree with that broad brushstroke.

[leftstreet]

32. We the Serfs, debating the difference btwn wealthy and rich

[Chan790]

39. No difference to me...

they both stack just as well. Metaphorically speaking.

[MindPilot]

59. I think it was Chris Rock who said

"Shaq is rich; the white man who signs Shaq's paycheck is WEALTHY!"

[hfojvt]

35. last Novemeber I ran for office

If I had won, I would be paid $68,000 a year.

When I told people that, their response was "wow. That is a lot of money."

It is only about twice what I make now, an extra $35,000 a year. Call it $25,000 after taxes. After 8 years at that pay, I would have extra income of $200,000 - in just 8 years.

What could I buy with an extra $200,000?

5 houses like the one I own now - with no mortgages, or
50 cars like the one I drive now - with no car payments, or
250 fancy bicycles like the one I just bought

and that would be on top of my current income where I am already saving about $10,000 a year

But that wouldn't make me rich?

It would not make me Bill Gates or even 1/1000th of Bill Gates, but that is what most people mean by "rich" - being able to buy things and do things and live a lifestyle that other, poorer people simply cannot afford.

[ProSense]

4. "I don't considere members of the top 20% to be part of the middle class either."

Maybe Occupy should have focused on we are the 80%?

It's fairly absurd to move the goal post to a point that was never campaigned on even during 2008.

[hfojvt]

12. Obama put the original goalposts in a bad place

I accepted that compromise

1. because, like Obama, I feared that it was necessary to keep McCain from being elected.
2. I always hoped that the Democratic Congress would get more
3. I did not know how much that goalpost favored the rich
4. I did not really have much choice either, did I?

And as for occupy. Not that I was part of that, but yes "we are the 99" was stupid and counter-productive.

It allows things like "$301 billion in tax cuts for the 99" where $163 billion goes to the top 20% (including $40 billion for the top 1%) and only $42 billion goes to the bottom 40%.

Yeah, sure, it's all for one and one for all among the 99%.

But I even doubt if much of the 60-80% group gives a crap about the bottom 60%. After all, of the $138 billion going to the bottom 80%, 42% of it was going to that group, and they are probably just fine with that kind of unequal distribution.

This, of course, is a real-world example, not just theoretical. http://www.ctj.org/pdf/taxcompromise2010.pdf

[mike_c]

8. it's an awful deal, totally unnecessary except to set up the next manufactured crisis....

This is just the worst sort of political theater. Of course, it keeps the audience engaged. Fiscal cliff! Fiscal cliff! OMG!

[CentristLiberal]

11. I totally disagree

Brand new here, but I can't believe I'm seeing Democrats griping after we just ate the Republicans' lunch. The President just raised taxes on the rich -- like he promised, and the Republicans look like fools.

[OKNancy]

14. welcome to DU

get used to the snark. Some people just can't be positive about anything.

[hfojvt]

16. What is positive about making 85% of the Bush tax cuts permanent?

What is positive about arguing between big tax cuts for the rich and huge tax cuts for the rich

and excluding all other alternatives?

And what is snarky about pointing this out?

Seriously, is this why we got fired up in 2008 for "hope and change" and said "yes, we can" in order to keep 85% of the Bush tax cuts?

It is not positive. It is absolutely sickening from where I sit. It's an 85% betrayal and we are supposed to be positive because it was not 100%.

[CentristLiberal]

29. Getting rid of the Bush tax cuts would kill the economic recovery

We're not having this discussion in a vacuum. Maybe if the economy was fine, your point would make sense. But we're right in the middle of a slow recovery. The people that can pay more -- rich people -- had their taxes raised. The rest of us can't afford it when we're barely recovering.

[Harmony Blue]

31. I agree 100%

some people believe we can solve all the problems on one swing. That is not how democracies work.

[Tarheel_Dem]

36. Thank You, and Welcome! It's ridiculous, but like John Boehner, the left can't take "yes".....

for an answer. Your point was made very succinctly this morning on NPR, by professional economists. Thanks again for joining us.

[hfojvt]

42. ooh, professional economists

I have an MA in economics.

The difference is that I am not being paid big bucks to argue in favor of benefits to the rich.

Otherwise I might be on NPR applauding a deal that favors the rich.

[Tarheel_Dem]

44. I bet there's good reason you're not qualified to "be on NPR".

[hfojvt]

45. ooh, snap, but you trust the experts

like Arthur Laffer. He has a PhD in economics from Stanford and he swears that tax cuts for the rich are great for the economy.

Damn, how about that, an economist who argues in favor of policies for the rich.

[Tarheel_Dem]

46. Hey! Write a long letter to Bernie Sanders and Dennis Kucinich about it! Oh wait...........

[hfojvt]

41. nice Republican talking point

Yeah, right, people making $200,000 can't afford to pay more in taxes.

Oh, the poor babies are just scraping by.

Same with people making $120,000. Just scraping by. Almost in poverty.

Republicans ALWAYS say that tax increases on the rich are gonna kill the economy.

[CentristLiberal]

50. I wanted the cutoff to be much lower

but that wasn't possible.

Also, it's not about causing pain to certain income levels -- it's about running a country. No one said that if you make 200,000 that you're scraping by. The point is that the extra taxes that you'd like to impose would take a portion of this mythical family's discretionary spending in taxes, instead of this example family spending it back into the economy. Multiply that by a couple million people and the loss of that spending would really hurt our recovery.

I understand being mad at the top income earners, but again, it's about running a country and an economy.

[Chan790]

40. Permanent just means no sunset...

if you'd listened to both the Senate and House Democrats speeches in debate, you'd know that permanent in this sense doesn't mean much longer than it takes to escape this recession.

There is future-intent towards tax-increases framed as tax-increases. Congressional Dems made that clear.

Some people are arguing for Clinton-era rates. A few are arguing for Reagan-era rates. I'm arguing for Carter-era rates. Nobody will be arguing for Obama-era rates.

[hfojvt]

43. oh, is that all

I am sure that someday then, we will have 60 progressive Senators in the Senate that will totally make the tax code more progressive once the Bush recession is over.

I think I have slightly better odds of winning the powerball, but who knows, it COULD happen.

[Harmony Blue]

20. I have never seen it this bad on DU

people just disregard facts and post raw emotion now. So sad.

[hfojvt]

24. but it is a FACT

that a disproportionate amount of the benefits of this deal goto the top 20%.

The people who are disregarding this fact, are the ones who are cheering this deal.

Perhaps the same people who think that the taxes on dividends were RAISED from 15% to 20%.

When the fact is that they were first raised automatically from 15% to 39.6% and then cut deliberately to 20%.

Not for the benefit of the middle class, and not an increase.

[hfojvt]

15. actually what he did was CUT taxes for the rich

Taxes for the rich were raised when the Bush tax cuts expired.

Then Obama and the centrist Democrats came in on January 1st to make sure that the rich got PERMANENT tax CUTS, averaging $18,000 for the top 1% and $8,000 for the top 4%. Plus big cuts to the estate tax!!!

Hurrah for "middle class" tax cuts!!

Keeping 85% of the Bush tax cuts is actually a huge Republican victory, but they will never admit it, because continually shifting the goalposts to the right allows them to win EVEN MORE in the future.

As for the left?

We are not even in the fucking game, much less able to score.

[Harmony Blue]

17. hfojvt

Your information is off.

The top 2% will see an increase in taxes. The bottom 2% of the top 4% will not see an increase (less than 450k) but if that is your only quibble then I am not sure where you are going with this.

As to your next point the remaining tax cuts should not be allowed to expire now given current economic conditions are fragile. Allowing the pay roll tax holiday and an increase in taxes (decrease in credits as well) would be too much a simultaneous shock to the economy.

One step at a time. You can't do everything all at once.

[hfojvt]

21. an increase in taxes from what starting point?

The Bush tax cuts gave the top 1% an average $47,000 tax cut.

Their expiration on December 31st gave them an average $47,000 tax increase.

Obama's deal on January 1st, erased a good portion of that, instead giving them PERMANENT tax cuts, averaging $18,000. The deal CUT taxes for the rich, it did not rasie them. They were already raised, and Obama and Democrats voted to cut them.

As for the nonsense that "tax increases will kill the economy". I never bought that crap when Gingrich said it and I don't buy the same crap from a different mouth even if that mouth is supposedly in my own party. I know when somebody is speaking for the rich and when they are not.

[CentristLiberal]

52. I understand your anger

but THIS bill barely passed the house. I actually agree with your sentiments, but like I said above, this didn't happen in a vacuum.

Guys like Bernie Sanders certainly didn't like the bill, but politics is the art of the possible. Sanders voted for it despite the issues you described.

If your standard is that every bill out of this Congress must be 100% progressive, then you're just going to be out of luck.

[hfojvt]

60. it was very possible to

a. let the Bush tax cuts expire

and

b. propose something more progressive to replace them - tax cuts that would favor the bottom 40%

the worst part of this whole mess is that no Democrat - not Sanders, not Kucinich, not Grayson, not Warren, not Baldwin and certainly not Obama even TRIED.

Everything is impossible if you won't even try.

It is impossible for me to hit the ball against a major league pitcher. I admit that, but if I had the chance, I would at least stand in the fucking batter's box and go down swinging.

It is ALWAYS possible to at least TRY.

[Melinda]

23. Your username seems Oxymoronic to me...

What exactly is a Centrist Liberal? And welcome to DU.

[CentristLiberal]

30. It's the first name combo that wasn't taken.

I consider myself center-left -- a centrist liberal. Bill Clinton is one of my favorite Presidents, if that helps.

[Melinda]

47. I actually googled "centrist liberal" after I posted to you...

and came up with a fairly good explanation; Krugman of all people! Here's a bit of what I learned:

In truth, there is one particular bit of liberal dogma that aids on the conservative disinterest in facts: centrism.

This liberal ideal – which Paul Krugman aptly describes as “The Cult of Centrism”– insists that to be right, one must see all sides, and give all views equal weight. It is similar to science in that it believes reality can best be ascertained by letting advocates of different sides battle it out, and the view most able to withstand challenges is the most “true” one. Usually, the liberal assumes, the truth is somewhere in between.

Liberals tend to gravitate toward professions like academia, science and journalism which value objectivity and determining facts from evidence. Liberal/centrists like to see themselves as able to keep their biases in check, and particularly delight in being attacked by “both extremes.” A liberal/centrist is wary of espousing “liberal” views because it is when espousing views they actually believe they are most in danger of appearing biased. A liberal naturally wants to “rise above” the fray and take their place in the sensible middle, arrived at logically, and derive particular joy from being able to cite those instances where they deviate from their own “team’s” orthodoxy.

Rather than hierarchical, liberal/centrism is more likely to see morality as relative, is different viewpoints as equally valid, and assume we all earnestly seek the truth by evaluating the evidence, are all susceptible to bias but all do our best to see beyond them.

link

the "biases in check" part stuck home with me. I think I get it now. And thanks for responding.

[CentristLiberal]

51. Wow

I was just trying to join DU and a few of the other things I tried were taken. Didn't put even 1% of the effort into it that is described above! Haha.

[Melinda]

53. lmao... see what you have done?

You've informed AND made at least one of DU a bit more knowledgeable!! lmao, welcome again!!

[Eddie Haskell]

49. Wipe that smirk off your face.

[limpyhobbler]

19. yeah it's not so great

The 1% said "Give us a permanent tax cut for people making $400,000/year or else we will cut off unemployment insurance right now."

So we gave it to them.

It's like "This is a stick up" kind of talk.

And then we were all just happy that it wasn't worse because we know they are coming for Social Security and/or Medicare next.

The problem with wealth is it's never enough, they always want more. And since they have money they have a very disproportionate influence over the laws.

[Eddie Haskell]

22. 100% agree, I hate this deal!

Obama's not working for us, he's working for them. This was nothing but a show. And for all those progressives that think we won the negotiation ... there's a sucker born every minute.

[PufPuf23]

33. hfojvt's analysis is correct

The "deal" institutionalizes most of the Bush cash cuts and will continue to suck income and wealth upward.

Eisenhower had a 90% top tax rate.

High earners could reduce their taxes by making tax deductable investments and paying tax deductible wages and benefits.

The starting point on the Democratic side was not social justice nor much of an economic stimulus.

[LWolf]

34. That's how we got screwed

with health care, too. The best options weren't allowed on the table.

Deja Vu.

[Tarheel_Dem]

37. It's awful ain't it? Why, oh why didn't we elect Jill, or Roseanne, or Rocky? WHY?

Oh, and many of us weren't informed that this was supposed to be a victory for "progressives", whatever the hell that means these days.

[No Compromise]

54. Thank you

It's really weird watching people try to paint this as a victory.

Check out the 'argument' that Obama is playing chess from Lawrence O'donnel and that 450K is the new 250K if it was the Clinton Era.

So see, 450 k really isn't that rich now, isn't that a powerful argument?

And all these people are reccing it saying 'fuck ya'.....okey dokey....

[hfojvt]

57. yeah, and LarryO was the "liberal" praising the Bush tax cuts

even before Bush got elected.

There was LarryO on TV complaining that he made to much money to benefit from Gore's tax plan.

I wonder if part of it is not that people invested so much hope in Obama and were so happy when he was re-elected that there is too much cognitive dissonance for them to accept that he betrayed them.

[JoePhilly]

55. We're Doomed, Doomed I tell you!!!!

[ProSense]

56. Here's is

some information for you.

Capital gains goes to 23.8 percent and a tax increase also applies to incomes at $250,000
http://www.democraticunderground.com/10022116613

Tax Policy Center: Average tax increase and after-tax income
http://www.democraticunderground.com/10022118509

From the White House: 7 Things You Need to Know About the Deal
http://www.democraticunderground.com/10022118640

Ezra Klein offers an interesting perspective on the next round of negotiations.
http://www.democraticunderground.com/10022119480

You spin a lot of nonsense in a lot of words and your numbers are completely off.

[hfojvt]

58. you link to some of the White House's lies

and you say that MY information is completely off?

"Raises taxes on the wealthiest estates"

That line is pure bullshit. From Obama.

On midnight, the Bush tax cuts expired. THAT raised taxes on the wealthiest estates. The exemption was $1 million and the tax rate was 55%.

Obama's bad deal CUT the estate tax (again, just like he did in 2010). His deal RAISED the exemption from $1 miillion to $5 million and CUT the rate from 55% to 40%. You link to Obama's spin and accuse me of inaccuracy.

That's rich.

And speaking of the rich. The White House link says this "dividends and capital gains would be taxed at a rate of 23.8 percent for high-income households."

Since the Affordable Care Act was NOT part of the Permanent screw America Act that Obama just signed, the extra 3.8% is not relevant to the discussion of the DEAL. The fact of the matter is that, once again, Obama created a tax CUT for the rich. Without the deal, the tax rate on dividends would have gone to 39.6% for the top earners. In fact, it did that, for a few hours. Then Obama and Reid and Pelosi stepped in to CUT taxes on dividends down to just 20%.

Here's a link on who benefits from the dividend tax cut. http://journals.democraticunderground.com/hfojvt/81

"On the other side, the 11,433 filers with income of $10,000,000 or more saved $25.84 billion (28.1% of the benefits going to .05% of the beneficiaries with an average savings of $2,260,124) and the 101,676 filers with income over $2,000,000 got $46.615 billion (50.9% of the benefits going to .47% of the beneficiaries with an average savings of $458,466.)"

Those are tax cuts that Obama has now made permanent. Permanent tax CUTS averaging $2,260,124 for people with incomes over $10,000,000.

And he wants to spin that as a tax increase on the rich?

[No Compromise]

61. kick

because the truth is more important than party unity propaganda...