Yikes...we are now debating whether to increase the deficit by $3 trillion or $4 trillion

[dkf]

Obama's proposal to keep middle class tax cuts increases the deficit by $3 trillion and keeping them all increases the deficit by $4 trillion per Ezra Klein. I don't think we can afford either for the long term.

[DJ13]

1. I think I've read the top 2% alone is 3.2T over 10 years

I doubt the small difference below $250,000 is 3T by itself.

I think Klein's numbers were off.

[dkf]

2. I sure would like some facts here.

It's too bad all policy doesn't come with a simple disclosure on expected impact.

[life_long_dem]

6. I think the $3.2T would be put to good use

and the $700B would be banked, or used to light cigars or whatever rich people do with extra money.






edited $ figures

[dkf]

5. It's opposite. Middle class cuts cost $3.2t. Top 2% adds $700b

The cost of extending the tax cuts for everyone for the next 10 years would approach $4 trillion, according to congressional estimates. Eliminating the breaks for the top earners would reduce that bill by about $700 billion. A one-year extension of the lower rates for high-income earners would cost the government $39 billion.

http://m.thegrio.com/politics/house-dems-deeply-divided-over-obama-tax-plan.php

[DJ13]

7. Thanks

I misunderstood.

[Hannah Bell]

14. The poster is mistaken. $3.2 T is not the "middle class" portion of the cuts.

Half the cuts went to the top 5%, and 70% to the top 20%.

The "middle class," the middle 60%, got less than the top 1%: $600 Billion.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9143121&mesg_id=9143596

[dkf]

17. Obama's plan aka "middle class tax cuts" is $3.2 trillion

[Hannah Bell]

21. Obama's package is more than "middle class tax cuts". The top 20% got 70% of the bush tax cuts

so obviously it's not just the "middle class" getting their cuts extended.


High-Income People Would Benefit Significantly From Extension of “Middle-Class” Tax Cuts


http://www.cbpp.org/cms/index.cfm?fa=view&id=3263

[dkf]

29. Well that is how Obama is characterizing it.

I'm just freaking out at $3.2 trillion or $4 trillion price tag.

[Hannah Bell]

33. there's a political reason for that. & there is no "price tag," because

it's a tax *increase* from what exists now, not a *decrease*.

[Hannah Bell]

13. Middle class tax breaks don't cost $3.2 trillion, unless you think everybody except the top 1% is

the "middle class".


Here's what bush's tax cuts actually cost over the last 10 years: 2.1 trillion before interest, 2.4 trillion including interest.

Of that $2.1 trillion:

32% went to the top 1%
47% went to the top 5%.
71% went to the top 20%.

The "middle class," i.e. the middle 60%, got less than the top 1: $600 billion v. $674 billion.



Tax cuts, $billions

Lowest 20% –21.2

Second 20% –109.3

Middle 20% –183.0

Fourth 20% –308.1

Next 15% –505.7

Next 4% –305.0

Top 1% –673.9

ALL $ –2,105.7

ADDENDUM: Total cost including interest: $–2,484.9

http://www.ctj.org/pdf/bushtaxcutsvshealthcare.pdf

[Hannah Bell]

12. About $1 trillion over 10 years for the top 5%, with about $700 Billion of it going to the top 1%.

http://www.ctj.org/pdf/bushtaxcutsvshealthcare.pdf

from citizens for tax justice, figures based on actual data.

average income for the top 1% in 2010 = 1.3 million

[w8liftinglady]

3. this is facts from 2008

http://www.cbpp.org/cms/?fa=view&id=1018

[w8liftinglady]

4. and some more

http://www.cato.org/pub_display.php?pub_id=6621

[doc03]

8. With the debt we have the tax cuts should have never been

passed in the first place. I am for eliminating both eventually but not at this time. I think the tax cut for people making over $250000 should be eliminated now and the others be phased out over time. I see no hope that we ever get a handle on the debt with the f----g Republicans opposing any tax increase and neither party making any serious effort to cut spending.

[HuckleB]

16. No offense, but D.U.H.

[Hannah Bell]

9. so you think we can "afford" Great Depression 2.0, then?

Who is this "we" you speak of, kimosabee?

[dkf]

18. I think talking about a permanent extension is crazy.

Extend for a couple years and then we need to rethink this.

[Hannah Bell]

22. "rethink" after 2 years. lol. You really have a problem with taxing the rich, don't you?

you've done several ops on what a bad idea it is: "because they do so much consumer spending"

[dkf]

25. Rethink taxes as in getting rid of all the tax cuts.

My focus would be to target the estate tax to raise funds as I've always thought that was the best way to recapture escaped taxes. And I would limit ability to use charities.

[Hannah Bell]

26. why wait two years?

[dkf]

27. We need to sustain consumption in the short run.

Or we have to come up with new funds for consumption like the payroll tax holiday. And this really does bite me because I'm a great believer in saving what you can especially for people who don't make as much, but consumption makes our economy go round. In the short run it is all about jobs. In the long run it is all about the deficit.

[Hannah Bell]

31. taking the money from the rich & spending it keeps consumption up.

a payroll tax "holiday" (oooh, a nice little holiday) is just another back-door attack on social security.

all your "solutions" involve letting the rich off the hook.

[dkf]

34. You may not agree with this, but for the moment I'm less interested in who deserves what and

More interested in keeping the economy from deteriorating.

Moreover, I don't think there is the political will to save the economy again should we start to double dip. I would rather not chance it.

[Hannah Bell]

35. taking the money from the rich and spending it keeps consumption up. what don't you get?

give me one historical example where increasing taxes on the rich during a recession or depression (or anytime, actually) made the economic situation worse -- *increased* job loss, further depressed consumer spending, or led to more business failures.

just one, i dare you.

[MadHound]

10. Frankly I'm of the opinion that we should let them all expire

The few hundred in taxes lost by individuals will be more than made up for by the long term economic health of the country. Running large deficits is nothing less than sailing into an economic headwind, and at this point our economy needs to meet as least resistance as possible.

If we're going to go further into debt, take a trillion of that money and spend it on a large scale WPA style jobs program. It would be much more beneficial for all of us.

[doc03]

11. Sounds like a good idea to me. I don't know how we will ever

get this mess straightened out when one party refuses to go along with any tax increases. GWB has f----d this country up beyond saving I fear.

[HuckleB]

15. Then there's reality.

We do this, or we don't, and let the GOPers come in and create a debt we ain't even dreamed about.

[dkf]

19. That is the scary thing. There is only Dems or insanity.

Republicans are incapable of good policymaking.

[Radical Activist]

20. Just one more burden left on the next generation

along with global warming and end-of-life universal health care.

[Hannah Bell]

36. oooh, you poor widdle babies. guess you'll just have to suck it up.

[TheWebHead]

23. the political mood right now is not about raising taxes

it's about spending. I don't think it's a good idea to get in a debate about raising taxes right before the election while saying nothing about spending. Spending under Clinton was relatively stable from 95-00 and ramped up under Bush and even more in the past two years, and it also ramped up w/ debt/GDP. There may be majorities that favor raising $250k+ taxes, but just like with gun legislation, the intensity is with the minority who will base their votes on the single issue. There may be math that says raising those taxes can capture $40b in revenue next year, but it ignores the real world consequences to changes in discretionary spending and equity valuations. If the tax cuts on the rich aren't extended and the market goes down 3%, or if they are extended and the markets go up 3%, then that 6% theoretical swing would equate to about a trillion dollars of wealth, and $150 billion in capital gains taxes.

[Hannah Bell]

24. that must be why most of the electorate supports raising taxes on the rich.

[TheWebHead]

28. I noted that...

and said it's about intensity. Naturally one is not going to be as concerned about whether someone else pays more taxes than the persons actually paying them, and that intensity gets amplified under the current federal income tax scenario that sees 48% paying nothing. Again, it's no different than the intensity of gun laws with gun owners, women with abortion, seniors with entitlements, etc.

[Hannah Bell]

30. yes they are. and there's no one who pays "nothing" unless they're living on fruits & berries

in the woods.

with 10% unemployed & people taking wage cuts, intensity is there -- if they're informed. and it's the dems job to inform them.

[Bigmack]

32. Three words....

Cut. Military. Spending.