Cantor Admits Extending Bush Tax Cuts Would ‘Dig The Hole Deeper’ On The Deficit — But

[cal04]

Cantor Admits Extending Bush Tax Cuts Would ‘Dig The Hole Deeper’ On The Deficit — But He Doesn’t Care

In recent weeks, Republicans have been trying to create an alternate reality in which tax cuts don’t add to the U.S. deficit. Specifically, these deficit frauds have been arguing that the Bush tax cuts of 2001 and 2003 — which are scheduled to expire at the end of the year — actually increased government revenue, and a further extension doesn’t need to be offset. Some examples:

– “That there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy.” — Senate Minority Leader Mitch McConnell (R-KY)

– “The Bush tax cuts led to a couple of things. They led to first of all, the largest amount of revenue being received by the government. They helped encourage economic growth and grew tax revenues.” — Karl Rove

– “This is a continuation of a tax policy, so I would say you don’t have to ask for a paid-for continued tax policy. This is a tax increase if we let this happen without doing something happen about it. They have also demonstrated they increase in revenue with the capital gains as a part of that.” — Rep. Steve King (R-IA)

Today, however, MSNBC’s Savannah Guthrie pressed Rep. Eric Cantor (R-VA) to admit that tax cuts do indeed increase the deficit. Cantor tried to evade her question by saying the issue needs to be looked at “through the prism of the working families seeking jobs,” but when pressed, he conceded that her point was right.

GUTHRIE: (W)ill you just as simply acknowledge that passing these tax cuts worsens the budget deficit problem? I mean, you can’t deny that, right?

CANTOR: Savannah, let’s look at it through the prism of the working families seeking jobs and the small business people who are creating them. It’s not a tax cut they’re looking for. They don’t want a tax hike. And that’s –

GUTHRIE: But that wasn’t my question. … I just was wondering if you had any dispute with the notion that it does exacerbate the deficit picture?

CANTOR: Well, what I said in the beginning is, if you have less revenues coming in to the federal government, and more expenditures, what does that add up to? Certainly you are going to dig the hole deeper, but you also have to understand if the priority is to get people back to work, is to start growing this economy again, you don’t want to make it more expensive for job creators.

Watch it: http://thinkprogress.org/2010/08/02/cantor-bush-tax-cuts/

Basically, Cantor is acknowledging that raising taxes on wealthy Americans would significantly contribute to his professed desire to cut the federal deficit, but he doesn’t care; he’d rather cut programs (like unemployment benefits) that benefit the middle class.



Cantor Appears To Concede That Bush Tax Cuts Will Add To Deficits
http://tpmdc.talkingpointsmemo.com/2010/08/cantor-admits-bush-tax-cuts-will-add-to-deficits.php?ref=fpa

[pinto]

1. Dear Mr. Cantor - Winners and Losers Under Obama’s New Tax Plan (via Darwin's Finance)

Winners

Making Work Pay tax credit - $400 for individuals, $800 for a couple filing jointly through 2011. This was already in place for 2009, 2010.

Middle Class Income Taxes – Extending the tax cuts enacted under Bush for families making less than $250,000 and individuals making less than $200,000.

Hiring Businesses – Budget would give companies a $5,000 tax credit for each new worker they hire in 2010. Businesses that increase wages or hours for their current workers in 2010 would be reimbursed for the extra Social Security payroll taxes they would pay. I question how helpful the second part is. Would this just make companies rethink a new hire since they could employ overtime for less money now? Some new hire decisions on the fringe may suffer.

Research Outfits – Make the research and experimentation tax credit permanent, saving businesses about $83 billion over the next decade.

Business Capital Outlays – Extend a provision allowing businesses buying equipment such as computers to accelerate depreciation through 2010, saving them $20 billion over the next decade.

Losers

High Income Earners – Raise the top two income tax rates for individuals, from 33 percent and 35 percent, to 36 percent and 39.6 percent, respectively. Result: nearly $1 trillion in higher taxes on couples making more than $250,000 and individuals making more than $200,000 by not renewing Bush-era tax cuts for them.

Investors - Increase the top capital gains tax rate from 15 percent to 20 percent for families making more than $250,000 a year and individuals making more than $200,000. This may have a gradual impact on stock market returns. With a higher capital gains rate, high net worth investors may shift to other assets with a more desirable net return profile.

Oil and Gas Companies & Multinationals - Increase taxes on U.S. companies with major overseas operations, and plans to increase taxes on oil and gas companies to the tune of about $39 Billion over the next decade. Also, restrict the ability of international companies to defer taxes on profits made overseas, raising about $26 billion over the next decade.

Charities – Since many charities rely on contributions from high income earners, the new limit on itemized tax deductions high earners can claim for charitable donations, mortgage interest and state and local taxes, will likely hurt.

Banks/Financials - Enact a “financial crisis responsibility fee” on large firms that may be “too big to fail”, raising $90 billion over the next decade.

Fund Managers – Change the way profits by investment fund managers are taxed, raising an additional $24 billion over the next decade.

http://www.darwinsfinance.com/obama-tax-budget

[Bitwit1234]

2. But giving unemployment benefits WOULDN'T stimulate the economy

I guess I must be blindfolded but I don't see the super rich and corporations going to the local supermarket, big box stores, the Public Utilities etc etc the things that keep this economy going and rush to buy and pay for things. They travel overseas, spend most of their money in foreign markets. HOW IN THE HELL DOES THAT STIMULATE OUR ECONOMY? And where are all the jobs that the tax cuts promised to provide. I don't see them do you. DROP THE TAX CUTS GET ON WITH RE-BUILDING THIS COUNTRY without the republicans help, because they don't want to see us get better all they want to do is tear this country down. And any idiot that doesn't make over $250,000 is as stupid as crap for supporting the rich.

[ck4829]

3. One of the best things that Democrats can do is make Republicans continue to defend these tax cuts

They don't add jobs, but they do cost the rest of us money.

K&R.

[valerief]

4. The meme will just be the Dems' lack of bipartisanship and contempt for small biz.

They'll spin it their way for the Fox dummies, er, viewers.