by Jacob Davies
What do the two major parties in the United States stand for? What priorities do they put higher than anything else, so high that they are willing to compromise on things they really don’t like if that’s the only way to make it pass?
Let’s see:
| Republican Party | Democratic Party | |
|---|---|---|
| Tax cuts for households making over $250k | MUST HAVE | AGAINST |
| Reductions in the estate tax for the very wealthy | MUST HAVE | AGAINST |
| Short-term employee-side payroll tax cuts | AGAINST | MUST HAVE |
| Unemployment benefits extended for another 13 months | AGAINST | MUST HAVE |
| Reducing the short-term deficit | DON’T CARE EVEN A LITTLE TEENY TINY BIT | DON’T CARE VERY MUCH |
So, are we clear?
I don’t want to hear from anyone who says that Republicans are on the side of those who work for a living in the United States. I don’t want to hear from anyone who says that Republicans care about the deficit. I don’t want to hear from anyone who says that Republicans are not, now and forevermore, a political party devoted to the very wealthy over everyone else. They made what they stand for crystal clear here.
And whatever the Democrats may do that drives me crazy, when it comes down to it, they do look out for the welfare of those of us that work for a living. Whatever the merits or otherwise of this deal, it did us all a favor in clarifying those things.
Jacob Davies, you’re right on this one. I thought that Obama spoke forcefully and persuasively at his news conference. I wish he’d appear more often.
Yes we can. We just have to fight.
What I see is permanent gains for the Republican positions (although not titled such) and band-aids for the Democratic needs. The rich are getting a lot richer, the corporations are getting incentives, the Unemployed are still unemployed.
It’s useful to me to compare the two parties in terms of which politico-economic era they would like to return to. For the ‘new’ Democratic party, it’s around 1995; for the modern Republican party, it’s around 1880.
Who wouldn’t want to go back and see Pirates of Penzance when it opened?
Of course its not complete. The Rep must haves included tax cuts for everybody.
Also, they certainly were not against extending unemployment, they wanted budget cuts elsewhere to pay for it. I am curious why that’s bad, except you wanted to pay for it another way? And I didn’t see anyone complain about an employee side tax cut, you mean Republicabs objected to a tax cut? Where did you hear that fiction?
It’s called governing, I am pleased that both sides rolled a whole bunch of this into a single agreement so now they can talk about the deficit and budgets and jobs and etc. without throwing this stuff in to kill things.
You may not like it,( “I don’t want to hear about”), but it was a good step forward in clearing the decks of things that needed to be done.
Politics aside, it is a good thing to pass.
I don’t want to hear from anyone who says that Republicans are on the side of those who work for a living in the United States. I don’t want to hear from anyone who says that Republicans care about the deficit. I don’t want to hear from anyone who says that Republicans are not, now and forevermore, a political party devoted to the very wealthy over everyone else.
Well then, my friend, you’d best throw away any implement in your house, including this here magick data box, that projects sounds, writings or pictures of what people are saying or doing in the capital of this “what a country” nation.
The problem is (and the GOBP knows it damned well) that the more, more people are in economic distress, the less they pay attention to politicks.
Its counterintuitive, but people tend to hunker down when things are tough. We might see torches and pitchforks when things get on the upswing.
I don’t want to hear from anyone who says that Republicans care about the deficit.
oh they care a lot about the deficit. it’s perhaps their most effective bogeyman, when they need to scare the electorate into voting them in, and when they need to scare the Dems into abandoning their principles. and it’s nearly 100% effective in both situations!
just look at what happened the last time we didn’t have a deficit (2000): the GOP pulled out all the stops to generate a new one as quickly as they could; they brought us unaffordable tax cuts, two endless wars, and an unaffordable giveaway to Big Pharma.
if those aren’t the actions of a party that loves a deficit, i don’t know what are!
no, the GOP loves, adores, requires a deficit. and the bigger, the better.
Also, they certainly were not against extending unemployment, they wanted budget cuts elsewhere to pay for it.
Until of course they could get budget-busting tax cuts instead, which makes the whole “they needed it paid for” argument entirely moot.
“Until of course they could get budget-busting tax cuts instead, which makes the whole “they needed it paid for” argument entirely moot.”
At some point, maybe, there will be an actual discussion about spending less. And then we will be able to judge who wants to cut the deficit.
Several threads ago we discussed getting 4 trillion dollars in extra revenue and Jacobs first response was to post his plan for the government to spend every penny.
That is why people don’t want taxes to go up. Show me a plan where we are going to spend less and I will consider supporting more taxes to make up the difference.
Meanwhile, in 2010, there was NO estate tax. George Stenbrenner, god rest his soul, died this year and his estate paid zero. I suspect 35% over 5M would have been a chunk.
Also, they certainly were not against extending unemployment, they wanted budget cuts elsewhere to pay for it. I am curious why that’s bad,
Did they propose any budget cuts? And did they propose any budget cuts to cover the cost of extending the tax cuts to those making >$250k (or all of the tax cuts)?
The Rep must haves included tax cuts for everybody.
So did the Democrats’. Everybody would get a tax cut on their first $250,000 of income.
efgoldman: my friend, you’d best throw away any implement in your house
Yeah, I know.
But what is blogging for if not grandiose but completely impractical statements on things you have no control over?
That and pictures of cats and/or babies.
Marty: The Rep must haves included tax cuts for everybody.
No, they absolutely, positively did not care about tax cuts for everyone. They only cared about tax cuts for the very wealthy. You can tell this because they were willing to hold the tax cuts for 98% of the population hostage to the tax cuts for the 2%.
That is absolutely incontrovertible from what happened. They could have passed tax cuts for 98% at any time – nobody opposed them. They could have then tried to pass the 2% cuts separately. But no, they absolutely had to have the 2% cuts and nothing whatsoever was going to stand in the way of that.
I didn’t see anyone complain about an employee side tax cut
Oh yeah? Then how come it was the subject of negotiation in this deal? How come it was only for one year, if the Republicans loved it so much?
they certainly were not against extending unemployment, they wanted budget cuts elsewhere to pay for it
Oh give me a break. They didn’t want any budget cuts anywhere else to pay for the massive tax cuts they insisted upon. It’s only unemployment benefits that need to be paid for? And again, the unemployment benefits were extended for only 13 months, not two years like the high-end tax cuts. If unemployment benefits were so important to them, why would they be the subject of negotiation?
At some point, maybe, there will be an actual discussion about spending less.
we have that discussion every two years. and the public consistently votes against those who it thinks are going to reduce spending (even though it often thinks that way out of ignorance).
politicians know that, and that’s why they refuse to talk about cutting anything substantial while they’re in office.
the “spending conversation” has happened and the public has decided it likes spending, the more the better; the more spent on an individual, the more that individual wants it.
the conversation we really need to have is: “OK, idiots, you want all this stuff? you gotta pay for it, so STFU, you bunch of childish imbeciles, and take pay your taxes!”
” And again, the unemployment benefits were extended for only 13 months, not two years like the high-end tax cuts.”
This really an apples and oranges comparison. Unemployment benefits were extended for people who already had 99 weeks of unemployment for another 50+weeks, unemployment doesn’t “expire” in 13 months. It just means we have to decide again in 13 months what to do with the people who will have been unemployed for 3 years.
They are different things.
Marty: Several threads ago we discussed getting 4 trillion dollars in extra revenue and Jacobs first response was to post his plan for the government to spend every penny. That is why people don’t want taxes to go up.
People don’t want taxes to go up because taxes going up means less money for them.
You don’t need an elaborate explanation for why people don’t like taxes. They don’t like taxes because they like money. Period, end of story.
People love government spending because it means direct payouts to them or jobs or contracts.
And no, they don’t connect spending to higher taxes, because they understand that the connection is very elastic and involves this highly abstract thing called the national debt that does not affect them in any way whatsoever.
“And no, they don’t connect spending to higher taxes, because they understand that the connection is very elastic and involves this highly abstract thing called the national debt that does not affect them in any way whatsoever.”
Yes they do connect them. No they don’t process the high elasticity of the abstract national debt. It does impact them, and they know it.
It seems you, at least you, missed the very essence of the last elections. People know that jobs are important and that the national debt can’t be infinite. Both things sent a huge freshman class to Congress. You should process both in your evaluations.
Marty: It seems you missed the very essence of the last elections
If the unemployment rate had been 2% lower and economic growth 2% higher the Democrats would have won in a landslide.
Nobody cares about the national debt or the deficit or how much the government spends. They care about how much it spends on them and they want it to be as much as possible, and they care about how much it taxes them and they want it to be as little as possible.
But mostly, they want a job, and a house, and healthcare, and to feel like if they lost their job they could find another.
You don’t need a more elaborate explanation – and there does not exist either evidence or a plausible causal connection to support the idea that they made their decisions in the last election on the basis of excess spending or excess debt.
“You don’t need a more elaborate explanation – and there does not exist either evidence or a plausible causal connection to support the idea that they made their decisions in the last election on the basis of excess spending or excess debt.”
Except for the election of every Tea Party candidate, most Republicans, and the Democrats that ran away from Obama all talking about reducing the debt.
You are right, if all that debt had generated more jobs the landslide would have been smaller, but it would have been a landslide either way.
Several threads ago we discussed getting 4 trillion dollars in extra revenue and Jacobs first response was to post his plan for the government to spend every penny.
That is why people don’t want taxes to go up.
As Jacob notes, folks don’t want taxes to go up, because they don’t want to pay them. I doubt they care much about what it gets spent on, beyond wanting what it gets spent on to benefit them.
My evidence for this is the distinct lack of folks putting their hands up to give up their personal SS, Medicare, federal pension, highway improvement, etc., in the interest of reducing the national debt.
The stuff Jacob named were investments. They were not wild-eyed liberal plans to piss away everybody’s hard-earned cash.
The wisdom of spending revenue on capital improvements and other forms of investment, vs buying down debt, is a pretty basic question.
It ought to depend on which is going to return more to you.
Sometimes you spend money to make money. Every business, household, and person understands this.
And the people’s reward for their concern about the debt, as evidenced by this deal? More debt! Hooray!
Except for the election of every Tea Party candidate, most Republicans, and the Democrats that ran away from Obama all talking about reducing the debt.
you should probably demonstrate that the electorate actually knows what “the debt” is, how it differs from the deficit, how both are created, reduced, how they relate to taxes, spending, etc..
cause, i got a pretty strong feeling that the general public don’t know s–t about any of that.
More debt! Hooray!
principled conservatism at work.
Show me which Republicans ran for election telling voters that they would stop paying interest on the national debt. Tell me which ones ran for election telling voters they would slash military spending. Show me which Republicans told elderly voters, “Vote for me and I will cut your Medicare and Social Security benefits”.
If they didn’t do those things, they may have been talking about reducing the debt, but they were talking about it in the same way they talk about ending illegal immigration or outlawing abortion. The technical term for this kind of talk is bullsh*t.
They want the bear patrol, but they don’t want to pay the bear tax.
Also missing, I think, are people who kvetch about not paying enough taxes making generous monetary gifts to the United States Treasury.
But I could be wrong about that.
funny though, over the last several days everyone has been discussing dealing with te debt AFTER the economy recovers, unless the spending/tax cut is your ox to gore.
We get a plan, through the one of the best acts of true leadership from Obama, and everyone has a complaint. This is a good thing he did, I admire him for trying to get it done and argue about it another day.
For Democrats, if you reall believe the “jobs is all that matters” from above, temporarily extending it gives you a great chance to have the argument again when you might win, like when there are, hopefully, more jobs.
Someone should be giving him the credit he finally deserves, it is a good move for the country AND for the Democrats in 2012,
Jacob, you’re hysterical, but you do have company. Please try and remember that it wasn’t so very long ago when a VAT was being bandied about in certain circles, a possible answer as it was called. Come to think of it, the idea of across the board tax increases was not beyond consideration, our president declaring himself an agnostic on the various proposals.
Does it really hurt that much, do you really lose sleep over tax cuts for the rich, skin off your nose fella? UP until very recently those increases would have hit Sub-S corporations, small business to you.
Chin up guy, you’ll find someone else to hate, some other target for da guvmint to punish.
In the meantime, act on principle and start sending in your own extra $$, a cover letter and SS # will do the trick.
Oh, right, the Democrats are such great advocates for the working class.
Here’s the deal. With unemployment at the highest it had been in a lifetime, and with inflation at historic lows and in fact with a real threat of deflation, Ben Bernanke straight up said that he was going to ignore the law and ignore unemployment to focus on fighting inflation.
And then Obama reappointed him and the Democrats in the Senate confirmed him. That lost Obama my vote next time around, that and his appeasement of torturers.
I can’t say that I agree with the chart’s assertion that Republicans oppose short-term employee-side payroll tax cuts. First off, I don’t really see them opposing any tax cuts, even if they prefer some over others. Second, when a tax cut weakens Social Security, as this package does, I bet they’re strongly in favor of it. See http://digbysblog.blogspot.com/2010/12/one-more-nail-in-social-security-coffin.html. I’d argue that this provision is the worst from a progressive viewpoint, far worse than the millionaires’ handout.
At some point, maybe, there will be an actual discussion about spending less. And then we will be able to judge who wants to cut the deficit….
That is why people don’t want taxes to go up. Show me a plan where we are going to spend less and I will consider supporting more taxes to make up the difference.
Here’s my thinking- progressives/liberals have a real plan: raise taxes enought to cover existing spending. Maybe reduce defense spending some. In an ideal world, chop out pork such as the ag subsidies, in the real world where there are too many Senators from tiny states with big farms, probably not.
Conservatives have a plan, but I dont think it’s a real plan. Keep taxes where they were under Bush, and cut spending to balance the budget. But what spending? All I have ever heard about is either penny-ante (eg get rid of earmarks or foreign aid) or fantasy (Rep Ryan’s plan to gradually defund Medicare).
You do seem to be making a straightforward proposal, but I just don’t see that mirrored in the GOP today. There is an ironclad insistence that taxes cannot rise, coupled with the leadership’s inability to embrace even the shell game of the Ryan plan.
It seems you, at least you, missed the very essence of the last elections. People know that jobs are important and that the national debt can’t be infinite.
iirc voters didn’t rank the debt very high on their list of priorities; the economy/jobs was the headliner.
I would observe this fact: every single human being appears to view the election results as a validation of their viewpoint: Americans hate Obama, Americans want Obama to be more progressive, etc. This ought to prove a warning to anyone using this logic- lacking any serious additional support, if you think that the election confirmed your viewpoints, you are probably as right as everyone else is. Or lucky.
Except for the election of every Tea Party candidate, most Republicans, and the Democrats that ran away from Obama all talking about reducing the debt.
1)Angle, O’Donnell, Miller. Dont need google to know you’re wrong on that one. Going back to my previous point, I saw the results as something of a repudiation of the TP candidates. Folks like Rubio who had been serious politicians before the TP ever happened were able to utilize its support, but candidates either from the TP or who won primaries against the establishment via TP support faired badly.
3)The blue dogs suffered the worst. The ones running away from Obama. But probably not because they were running from Obama, because they were from swing districts in a bad year for Dems. Again, in my biased reading.
Good chart, but one suggested correction:
Instead of “Tax cuts for households making over $250k”, a more accurate title would be “Extra tax cuts for those with taxable income over $250k”.
Also missing, I think, are people who kvetch about not paying enough taxes making generous monetary gifts to the United States Treasury.
To put this in context, what “people who kvetch about not paying enough taxes” are looking for is a return to the status quo ante the Bush cuts, which were, basically, stupid.
Not crazy confiscatory BS, not a levelling of all incomes, not “soaking the rich”.
Just freaking sanity. Just not continuing a policy that has achieved precisely none of its claimed goals of fostering a robust economy, and that has instead taken us from black ink to red.
And, “not continuing it” means simply letting it expire, as it was originally intended to do, because at the time it was passed, it was known that it would create freaking huge deficits.
Nobody likes to pay taxes. Some people are willing pay the bills.
If you want to raise my tax rates to pay for stuff that needs doing, I’m more than happy to pony up.
You want another five percent from me? That is the most that is being asked. I’d pay that. All I ask is that something useful be done with it.
Show me the Tea Bagger who is volunteering to give up whatever they get from Uncle. I’d like to meet one.
Also missing, I think, are people who kvetch about not paying enough taxes making generous monetary gifts to the United States Treasury.
Actually, I need to expand my reply a bit.
When I say “nobody is putting their hand up to give up their federal benefits”, I am not referring to individuals giving back their personal benefit.
I’m talking about people who claim they want to reduce the size or scope of government drawing the line at programs that help them.
Hopefully that distinction is clear.
It would do bugger-all for Bob Smith of Muncie IN to give back his $1,000 a month of SS money. Other than, maybe, making Bob Smith feel happy in some odd way.
It would make a large dent for SS benefits as a whole to be reduced in one form or another.
The complementary analogy on the “lefty” side is for people to support representatives and policies that actually end up increasing their tax burden.
Which I personally, and millions of people like me, have knowingly done.
We have put our money where our mouth is. Everybody else’s money, too, which maybe sucks for them, but that’s life in a representative polity.
Net/net, it seems to me that people like me walk the walk. We think government is worthwhile, and if it costs us money, we pay.
I don’t see a corresponding willingness on the other side to sacrifice things that actually benefit the folks with the big mouths. Maybe it’s there, but I don’t see it. At all.
russell, I am curious where those lefty proposals are that their reps are pushing that increase their tax burden.
Middle class tax cuts were a must, payroll tax cuts were good.
Adding taxes to the rich and then spending every penny is all the solutions I have heard.
So where is this lefty willingness to contribute.
” And again, the unemployment benefits were extended for only 13 months, not two years like the high-end tax cuts.”
This really an apples and oranges comparison.
Marty: Yes, they are apples and oranges. One is money for people who a.) are trying to survive, and b.) will spend every dollar (a good thing in an economy suffering from lack of demand). The other is mostly keeping money in the portfolios of people who already have more money than they know what to do with. Very different indeed.
I have never heard a rational argument for cutting government spending during – especially a severe – recession. I’ve heard emotional arguments (‘we’ binged and now ‘we’ must pay) and facile, and false, analogies (government budgets are just like a family’s), but NOT ONCE a rational, sensical one. Got one?
“now and forevermore”
That third word has a problem.
If it didn’t, it would be reversible, and the Republican Party of today would be identical to that of 1906, 1886, and 1866.
It isn’t.
Pull that word, and you have a fine post.
Maybe the Republican Party of 2200 will be the Party of the rich, and maybe you’re confident predicting that, in which case, all power to you. Maybe even in the year 22,000. Could be.
I think you’re really stretching it by then, though. “Forevermore” is a very long time.
Me, I won’t go further out than 20 years, but I’m known to be cautious, though not necessarily conservative.
If you didn’t want to hear this, I’d apologize, but since you’re posting it to the internet, I’m taking the risk.
And, yes, of course I know you’re using a metaphor. I’m saying it’s a bad metaphor, because it isn’t true. And it does matter.
If we plan on the basis that fifty years from now the Republican Party is going to be the same as it is today, that’s nuts.
And if we — Democrats, at least, but anyone, really — not looking ahead a few decades, we’re schmucks.
The Nytimes has a summary of the deal, highlights:
At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.
…
The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.
And negotiators have agreed that the estimated $900 billion cost of the cuts will simply be added to the deficit — not covered by reductions in spending or increases in other taxes. That is good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.
In fact, the only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000.
…
Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income. For an individual earning $110,000, that provision would reduce payroll taxes by $2,136.
Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000.
…
Under Mr. Obama’s failed proposal, which would have raised the rates on income over $250,000 for families and $200,000 for individuals, the taxpayers at the top 1 percent of the income scale — those with incomes above $564,000 — would have received an average tax break of $28,000. Under the agreement reached with Republicans, the top 1 percent will receive breaks of about $70,000.
No offsets, tax increases on the poorest earners, carried interest still taxed at capital gains rates, $70k to the top 1%.
What a deal!
well, hmmmm, I watched Obamas press conference and I think he did it great.
Cut the deal without Congress onboard, called the Republicans hostage taking terrorists, called the Democrats sanctimonious.
Deemocrats really upset that he gave up too much and then dissed them, Republicans feel backstabbed being dissed the day after they talk about his bipartisanship.
Nothing passes because the Dems get fired up and he gets to be the guy who was willing to compromise. The Dems get to be outraged for their constituents and the Republicans eventually have to sign a middle class tax cut.
A perfect political play. He never ceases to amaze me.
it is a good move for the country AND for the Democrats in 2012,
It’s a horrible deal for the country, considering the options, and bad for the dems, with one exception: Obama himself.
Speaking of whom, I was formulating a longish comment about Obama’s presser, but that young Yglesias fella pretty much beat me to it:
And yet…
1. The Republicans agreed to an estate tax rate of 35% of $5 million.
2. The Republicans agreed to an extension of the Earned Income Tax Credit, the Child Tax Credit and the American Opportunity Tax Credit.
3. The Republicans agreed to a 13-month extension of unemployment insurance.
4. The Republicans agreed to a 2% cut in payroll taxes paid to employees for 2 years.
…but it’s so much easier to demonize, and what’s more, those charts have really pretty colors.
Actually, I was referring to guys like Warren Buffet and Bill Gates, both of whom have complained that they don’t pay enough taxes.
I really hate the way this played out, and I know this deal is bad for the country, and I wish Obama would give the Republicans hell. But…..
I honestly can’t say I would’ve wanted the Democrats to play the GOP’s game of chicken with unemployment insurance. That’s a whole lot of people who would’ve been harmed in a big way, immediately, and I think the Republicans would’ve let it happen. Half of them are crazy enough, and the other half are just callous and confident that the Democrats would get the blame anyway.
Say a maniac is holding a little kid at gunpoint and demanding the keys to the bank vault and your car. Obviously this isn’t good or fair and he shouldn’t be able to get away with it. But if you just tell him “no, you’re bluffing”, because the loss of the money and the car will have bad consequences, and because you don’t want to make things too easy for the maniac – and if you have reason to think he’s not bluffing, because he’s already gunned down five other strangers at random – sorry, that’s just stupid, and no one’s going to give you credit for being a tough negotiator if the kid gets shot. That’s not the time to be fighting the battle. The battle was lost when the maniac got the gun and the kid.
The best you can do at that point is try to keep the maniac away from guns and kids in the future. Get the damn Republicans out of Congress, because this is how it’s going to be as long as there are this many Republicans in Congress, under the current definition of what a Republican is. They don’t care who gets hurt.
So your contention is, if I understand correctly, that because the Republicans finally agreed to these things after successfully holding them hostage to tax cuts for the wealthiest Americans for so long, that the assertions in the OP are incorrect–to wit, that Republicans don’t favor the wealthy at the expense of the working class?
What a strange world you live in. Sad how little has changed in it for having been gone so long.
Slartibartfast: There’s a huge fallen tree blocking the street, and 100 unusually strong people have gathered around. Warren Buffett says, “Let’s all put in some effort to move this tree.” You say, “Well if you think it’s so important, why don’t you go push on it right now, while we think it over?” Not helpful.
The whole point of having a tax system is to be able to plan roughly how much revenue we want to raise, and then make rules to determine what each person’s share will be to achieve that goal. Absent that, voluntary gifts to the Treasury are irrelevant. Warren Buffett is not going to solve our problems by himself, and there’s no reason to think other billionaires will follow his example just for the hell of it. I’m sure you know this and you’re not actually saying that that would help; but then what are you saying? Is it–
(a) You don’t think Buffett really means it, so we shouldn’t listen. Then why did he say it? He doesn’t need the PR.
Or (b), he means it, but he doesn’t deserve to be taken seriously unless he symbolically abases himself first– let him push on that tree fruitlessly on his own for half an hour till he’s broken a sweat, then we might listen.
Or (c)– please fill in the blank.
Hob, back to your kidnapping analogy:
Carrying that analogy a bit further, what do you do AFTER you give the kidnapper the money in order to save the hostage? Do you, for instance, honor your promise to him NOT to hunt him down like a dog, get as much of the money back as you can, and throw his ass in prison?
It seems to me that if you wanted to cultivate a reputation as an honorable hostage negotiator, you would scrupulously honor any promises you made to the kidnapper. But if your goal was to deter future kidnappings, you’d go after the son of a bitch the minute he let the kid go.
In this analogy, BTW, there’s only ONE kidnapper to deter: the GOP. Obama does not have to protect his honorable-hostage-negotiator reputation in order to be able to negotiate with some OTHER future kidnapper.
So if he does not turn around, the minute the deal is actually done, and go after the GOP with all the political force he can muster, I for one will find it very hard to re-up his contract as the hostage negotiator for my side. He will have to get himself re-elected by people who think principled hostage negotiations are the best defense against a serial kidnapper.
Also BTW, the hostage in your analogy is “the American people”. Maybe they LIKE being held hostage over and over. If so, Obama has nothing to gain by deterring the GOP, and his main hope of a glorious legacy is to be a good little hostage negotiator again and again. It’s not a legacy I would aspire to, myself, but personal tastes differ.
–TP
Tony P.: I pretty much agree with your extrapolation.
It’s easy to find prominent people on the right who complained even in the Bush era that too much of the tax cuts goes to the rabble instead og the nobles. I consider the constant claims by GOP leaders that they want the tax cuts for everyone to be bald-faced lies. If they could get away with a plan that would have only the top 2-5% profit from any tax plan, they would do it. Cf. the demands to do away with estate and capital gains taxes altogether and painting a picture of an ideal world where income is not taxed at all and all (at least federal) revenue is from tariffs and (if unavoidable) sales taxes. And even in the latter case I would expect demands for luxury exemptions in order to stimulate demand by the rich to be right around the corner.
Let’s polygraph every congresscritter on that!
1. The Republicans agreed to an estate tax rate of 35% of $5 million.
How many $5 million+ estates are there out there, anyway? Is Charles, like, Not Red Enough for Redstate if he’s posting here again? I’d think he’d be embarrassed, what with his whole “Party Of ‘No.” shtick of his ObWi tenure having blown up in his face like a TNT stick in the Coyote’s hand.
Slarti: There’s a lot more context to Buffett’s “I’m not being taxed enough”; I’ve had the pleasure of hearing him speak on it twice, in person. The other side of that is, “If the government is not going to tax my money and use it do to the government’s business, I’ll make sure it goes to organizations that will.”
4. The Republicans agreed to a 2% cut in payroll taxes paid to employees for 2 years.
i really don’t get how having the GOP “agree” to yet another unaffordable tax cut is any kind of victory for anybody but the irresponsible greedy pinheads that make up the GOP.
Does it really hurt that much, do you really lose sleep over tax cuts for the rich, skin off your nose fella? UP until very recently those increases would have hit Sub-S corporations, small business to you.
only if that S-corp made enough money to hit the cutoffs. and not all of them do.
At some point, maybe, there will be an actual discussion about spending less.
This is the dumbest thing I have ever heard. The United States is has more people in it than it did 20 years ago, or even 10 years ago. The economy is larger. Why would government cost less?
Marty, your ability to mindlessly mouth GOP talking points while sanctimoniously acting like you’re some disinterested observer is disgusting to watch.
Does it really hurt that much, do you really lose sleep over tax cuts for the rich, skin off your nose fella?
Yes, actually. The Republicans acted like rapacious locusts during the Bush administration, stripping the government bare to pay for tax cuts while rabidly and angrily pushing for war, torture, and unfunded expansions to Medicare for political gain. And now they don’t want to pay for the very things that have caused this country so much trouble. Sounds to me like a bunch of dishonest greed. If the top tax margins go up (you understand that taxes are marginal, right?), the high earners still get the tax cuts available at the lower margins. They sounds like a bunch of whiners and, honestly, hostage takers.
Also BTW, the hostage in your analogy is “the American people”. Maybe they LIKE being held hostage over and over.
Some of them are much like the children who are in league with the kidnappers and split the ransom paid by their parents with the captors. And some of them don’t even get that, but think their captors are nice guys who deserve a nice ransom. But Obama promised to bring together the siblings who liked the kidnappers and the siblings tired of watching their parents hand their money over to the hostage takers, so this is what you end up with.
Granted. But the same applies to russell’s complaint that I was responding to.
russell said:
To which I responded with what you responded to.
Blank filled in? I saw russell calling something like hypocrisy, that people would fail to act consistently with their stated goals. I might have misread russell, in which case I might have to retract, but he hasn’t said that I have.
And if we all did that, then what? Giving to charity doesn’t necessarily pay the federal government’s bills. Some of it replaces what the government might spend; some of it doesn’t. There’s really no way to know.
I am fully aware of Buffett’s and Gates’ charitable contributions. Lots of people give to charities; not in those amounts, but in amounts that they can afford.
Still, decent point. But still: as a counter to russell’s point, above, I don’t see that in general, individuals espousing higher taxes are spontaneously paying them even when not required.
Hob’s right: it doesn’t work that way. Granted, it doesn’t. Which is why you don’t see people spontaneously abandoning their SS (and the like) benefits that they don’t really need: because it doesn’t do any good.
What? The suggestion that the government might spend just what it takes in is stupid?
I don’t think anyone’s suggesting, here, that the government spend less than it did 20 years ago. I think what’s being suggested is that we might want to spend less than a trillion more than we take in every year.
russell, I am curious where those lefty proposals are that their reps are pushing that increase their tax burden.
For starters, we could look at the original vote on the Bush cuts in the Senate and the House. I can tell you how my reps voted.
I have to assume your comment here is a sort of rhetorical belch.
Do you really need a laundry list spelling out the measures supported by folks on the left that are likely to cost them money?
How long a list do you want? Do you want federal only, or federal state and local?
Should I zip it up and mail it to you? I don’t think it will fit in a blog comment. Not even one of mine.
And as an aside, “adding taxes to the rich” should, in context, be read as “allowing existing tax cuts to expire as intended”. And expire they ought, because they cost us a sh*tload of money and they didn’t accomplish what they were supposed to accomplish.
Results count. Isn’t that a big conservative principle?
I’m still waiting for the groundswell of “tea party” support for eliminating SS, Medicare, Medicaid, VA benefits, or any similar entitlement program.
I’m waiting to see one person with teabags on their hat say “Yes, cut my SS in half, because the nation needs the money”.
They don’t roll that way. If there’s a deficit, or the debt is too large, their approach is to cut something that helps somebody else. Or at least, something whose value to them escapes them, because it doesn’t deliver a nice crisp check to their personal mailbox.
I want to see tea bag / libertarian / conservative / what have you skin in the game. Then I’ll take them seriously when they talk about their concern for the nation.
IMO they don’t give a crap about the nation, they just don’t want the government spending their money on anybody but them.
Understandable, but not particularly helpful.
I might have misread russell
You did not.
Which is why you don’t see people spontaneously abandoning their SS (and the like) benefits that they don’t really need: because it doesn’t do any good.
That isn’t what I’m looking for.
I’m looking for people who advocate reducing the size of government, who also explicitly and clearly support eliminating or reducing programs that benefit them, directly and concretely.
The way that I, as a “lefty”, which in this country apparently means “someone whose first impulse is not to dismantle any and every public institution”, will explicitly and clearly support public efforts that *will cost me money*, because I think they create value for the nation overall.
I’m not seeing it. If you do see it, by all means enlighten me. No snark.
russell:
Tyro:
What I say is not a belch or mindless. I read reams of liberal/progressive talking points with little or no substance or thought of the bigger picture. Mindless raging against the machine is useless, although sometimes cathartic. If anyone here is sanctimonious it ain’t me.
The extension of all tax cuts for two years was NOT a Republican goal, it was a compromise from a position that businesses needed long term tax stability so they should all be made permanent. Thats a win for Obama.
They never opposed extending UI, they wanted to discuss paying for it with out of the existing budget. They also knew that it would be in any agreement. The length (13 months) was a win for Obama or at least a tie.
Estate taxes had run out, they were ZERO, something is now in place. Win Obama.
Plus payroll tax cut etc. etc. all add up to 900 billion only about 250B of which is the Bush tax cuts.
Overall, Obama got a lot for what he gave.
So is that mindless talking points? Or is your faux rage?
“I’m looking for people who advocate reducing the size of government, who also explicitly and clearly support eliminating or reducing programs that benefit them, directly and concretely.”
I guess I will address this finally at risk of being somewhat snarky.
Your question assumes an intimate knowledge of the Federal budget that most people should not be expected to have. It is the classic defense when someone knows the other side has inadequate information to form a final conclusion.
Put the debt commission results in front of people with a clear explanation of the benefits and costs of each and a lot of people would vote for it even though some of it takes from them.
Sure, no one sends their check back to SS because they don’t need the money, but lots of people would not miss it if it didn’t show up, so better means testing.
It’s a long list of possibilities, but the federal budget is a huge document. We elect people to do what you keep asking and when they don’t, we elect other people. And, if this group doesn’t, we will elect other people until they do.
The whole “well if you want higher taxes why don’t you donate money to the IRS” thing is such a steaming load.
I am willing to pay more in taxes to help bring the budget back into balance (that’s the very very short version). I am NOT willing to do this while other people just as rich as me free ride. No.
The reality is that a ton of deficit spending now = higher taxation later (likely in combination with benifits cuts, which will impact me too, even if I’m well off). So I figure I’m gonna pay either way. If I pony up more now while a bunch of other folks don’t, I will make a miniscule impact on the situation and thus will STILL have to pay more (and/or receive less) later. You aren’t asking me to be principled. You’re asking me to be an IDIOT.
Oh. It sounded a lot like what you said.
I’m not sure exactly what you’re after, though. Are you after Congresscritters voluntarily relinquishing some of their pay, retirement benefits, medical coverage, etc? Are you looking for people, irrespective of party, volunteering to cut back on what the government gives them?
I’m willing to, for instance, means-test SS payments so as not to hand out money to folks that really don’t need it as much (this includes me, if I turn out to be one of those people). But when I say things like that, I get pounced on by people who are outraged at the notion of means-testing a time-honored government-assisted retirement program, thus making it welfare. Because it’s posturing and scheming, and not a bonafide attempt to achieve something closer to fiscal sanity. Even though that’s not my goal, people are willing to make it my goal in order to stop the discussion.
So much for voting counter to my wallet.
I’d bid pulling us out of Afghanistan and Iraq, posthaste, cutting back on some clearly unnecessary military programs, and seeing what can be done about limiting the rate of growth of Medicare, which is pretty much the fastest growing line item in all of government spending.
We can discuss some of those details, but any of those would be a decent start.
We’ll never see Congress cut back their own pay & benefits, though, because the collective bunch of bastards are entitled to that. And we all know what happens when we throw the bastards out: we just get a new bunch of bastards.
…it was a compromise from a position that businesses needed long term tax stability so they should all be made permanent.
Well, at least the Republicans understand how to negotiate from an advantageous starting point, however unsupported by facts. These tweeks aren’t significant enough to hold back businesses from profitable opportunities, and wouldn’t letting the Bush cuts expire be just as permanent as anything? Or proposing any tax regime that would (be intended or said to) last whatever amount of time was necessary for businesses to move forward with all the bold, economically stimulative plans they’ve been hesitant to implement?
They never opposed extending UI, they wanted to discuss paying for it with out of the existing budget.
Somehow the tax cuts for the wealthy came with no such strings.
Whether the GOP compromised or “agreed to” anything depends on what the baseline is if there were no compromise and what the GOP’s general position is.
The “no compromise” baseline is the expiration of the 2001/03 tax cuts, which means higher marginal rates and the estate tax at pre-tax cut levels. The GOP negotiating position is, AFAICT, “taxes are bad, spending is bad (unless we like the spending)”.
Looking at the deal it appears that the big GOP “compromise” is allowing unemployment benefit extension without requiring a “pay-for.” Pretty much everything else in the deal is “win win win” for them.
Estate taxes had run out, they were ZERO, something is now in place. Win Obama.
From Wikipedia (emphasis mine, and if anyone has a better cite, I’d welcome correction):
On January 1, 2010 a “one year repeal” of the tax was effectuated by a temporary, one-year-only rate of 0%, but on January 1, 2011 the estate tax is scheduled to return at a top rate of 55% and the exemption amount is scheduled to drop back down to $1.0 million.
You have to keep in mind what the starting point is when determining what direction you have to move in to get to somewhere else. You got your relativity relatively twisted up there, Marty.
it was a compromise from a position that businesses needed long term tax stability so they should all be made permanent
care to explain how the prospect of the individual tax rate going from one known value to another, slightly higher, known value creates instability for business ?
it’s not like the tax rate was going up 15%, or 10% + (Rand mod 20)%, or (sum (3 dice rolls))%. it was scheduled to go up a known, small amount.
It should be noted that the 35% rate/$5 million estate tax exemption that the GOP agreed to as a “compromise” is, from a quick Google, the lowest rate and highest exemption amount since before WWII, other than the one year repeal this year (which, you know, you have to die to take advantage of).
hsh, I am fine if you think there goals weren’t necessary, but this:
is exactly the kinds of talking points that everyone keeps repeating. They were two very different issues, with different potential solutions. Both needed to be done. However the payroll tax cut wasn’t paid for either. In fact, the percentage of Republican goals in this agreement is about the same as in the original stimulus bill.
I will repeat what I said above, overall this seems like a good compromise that reflects some of the best governing that has been done in the last two years.
The problem seems to be that if the Republicans get anything the Democrats get enraged.
Where is the Republican saying the Dems held the tax cut extension hostage to the payroll cut? There is absolutely no good faith on the Democrats side.
Even Obama himself cut the deal and then ruined any shot at moving forward in a real bipartisan way by taking his shot at the Republicans to try and satisfy the left. Good partisan politics I am sure. But reinforces my view that he is better at that(partisan politics) than really trying to “change” Washington.
He should have laid this out as a big victory and left it at that, because, in many ways, it was.
Marty – what is it in this that the GOP would be opposed to on its own merits, standing along? The only thing I can come up with is the extension of UI, which you say above they would be fine with if there was a pay-for.
So, that’s one, what else?
Both needed to be done.
Both what, and why did they both need to be done?
And, in lots of ways, Ezra Klein agrees with me.
Where is the Republican saying the Dems held the tax cut extension hostage to the payroll cut? There is absolutely no good faith on the Democrats side.
I don’t see how these two sentence relate to one another. What are you saying here, Marty?
hsh,
The Republicans cut the deal, said it was a good deal, great bipartisan solution and the next day the POTUS called them hostage taking terrorists. No Republicans were calling him names. until he did that of course.
“So, that’s one, what else?”
Actually I agree with this point, but the public political lines that had been drawn give most of this stuff to the Democrats as a win.
POTUS called them hostage taking terrorists
cite?
IIRC, he did not use the word “terrorists”.
Marty: Which election were you watching? The one I saw had Republicans running against Democrats alleged cuts to Medicare and Social Security, running to protect the tax cuts for the highest marginal incomes. They also used the deficit as a scare tactic, but given their main priorities in the campaign, I have to say their deficit concern comes across as insincere, shall we say?
The Republicans cut the deal, said it was a good deal, great bipartisan solution and the next day the POTUS called them hostage taking terrorists. No Republicans were calling him names. until he did that of course.
Well, okay. But, even if I accept that, it’s very different from what you wrote before. No biggie, though. Moving on.
I wonder which part of this deal Obama would have had to give up if he hadn’t frozen federal employee pay.
The estate tax thing is a big win for the GOP.
The 2-year extension of the Bush tax cuts is a win for the GOP. Potentially a huge one, since I figure they will beat that horse into subatomic particles come 2012. Hmm, what happens in 2012?
The payroll tax holiday is pretty neutral, possibly a win for the Dems.
Unemployment extension = clear win for Ds.
On balance, why exactly should liberals be happy with it? I get “not enraged” and that’s where I fall, but happy? Come on.
Nate,
EVERYONE in Congress says the debt will become a problem. The very right wing Republicans want to balance the budget by massive spending cuts right away. The rest of almost everybody says we need a plan to deal with it “after the economy improves”. I am not sure the two sides are very far apart on the priority and timing of that objective. They will start pretty far apart on HOW to do it, but the ways are actually pretty limited so they will figure it out in a few years.
Everything before the 2012 elections, from both sides, on the topic is theater.
Where is the Republican saying the Dems held the tax cut extension hostage to the payroll cut? There is absolutely no good faith on the Democrats side.
Only have time to address this one terrible argument, among the others.
The only thing germane to whether Obama negotiated in good faith – and remember, this was Obama’s deal, not the dems’ – is whether he meant what he agreed to. I think he did. So, no ‘bad faith’.
If ‘bad faith’ means not ‘being nice’, rhetorically, and you are accusing the dems or Obama of that compared with the Republicans…well, I’m not going to dignify that with anything more specific than laughter.
Obama is not the Congress.
any legislative deal he negotiated is the equivalent of “let’s you guys and those guys fight”.
cleek,
You’re right, he didn’t say terrorist.
EVERYONE in Congress says the debt will become a problem. The very right wing Republicans want to balance the budget by massive spending cuts right away. The rest of almost everybody says we need a plan to deal with it “after the economy improves”.
Marty, again, I don’t see that at all. There’s lots of TALK about how “The Deficit”* is a problem, which coincidentally started after a Democrat won the Presidency. As for how serious anyone is about this? I would say Not At All. The Republicans? In 2000, they inherited a surplus, and their first move was to pass tax cuts with a large part dedicated to benefiting just the extremely wealthy, and put the government back into a deficit. During the eight years of the Bush Administration, when they had all the levers of government under their control for at least five of those eight years, they did nothing to reduce the deficit, in fact they made it many times larger.
So now we have a freshman class of Tea Party Republicans coming in, on opposition to “socialism” and debt and cuts to Medicare and Social Security and making sure those tax cuts that ended the 2000 surplus are extended, at the cost of billions of dollars a year. This is at the very least incoherent.
So no, I don’t believe that the Republicans, either the Old Guard, or the Gingrich Republicans, or the Tea Party Republicans are concerned about the deficit and the debt at all. Their actions have shown otherwise, repeatedly, for more than a decade. “The Deficit” is a weapon to attack Democrats with, to try and dismantle Social Security with, and nothing more.
And until that changes, which I doubt, Democrats being concerned about “The Deficit” is pointless at best, and actually harmful at worst. It’s why the stimulus was too small and it’s why the ACA had easily-demagogued cuts to Medicare Advantage (which is just payouts to private insurers).
So what evidence do you have that this time, the Republicans are really worried about “The Deficit”, really, for honestly true this time?
* It’s in quotes because “The Deficit” as a problem is something completely divorced from the actual facts of government balance of payment and spending, IMO.
“Obama is not the Congress.”
This is also very true. But his recorded message to supporters this morning finally ties the deal to “change” in Washington(summary by ABC News) which really undercuts the Dems in Congress that want to fight the deal or filibuster in the Senate.
But we also have the tax cut conversation every year. And the public consistently votes against politicians who mention raising their taxes.
Yes, and this is where politicians in the US virtually never come through. The Democrats only look good on this issue in contrast to the Republicans. Even Obama campaigned on a ‘tax other people’ plan when he promised not to raise middle class taxes. We’ve set up a nasty dynamic where cuts and payments are always talked about as being for other people while expansions and tax breaks are for you. There is never a conversation about raising *your* taxes to pay for things. My problem with that is: so long as you think get them to think that other people will pay, spending will hugely outstrip taxation. This will continue well after it becomes obvious that it is going to be a disaster (see California).
“So what evidence do you have that this time, the Republicans are really worried about “The Deficit”, really, for honestly true this time?”
No one has any evidence that anyone means what they say about the deficit or the debt, either side. I will be watching to see if they address the rcommendations that have been put forward by the commission to decide who to believe in 2012.
The past, well, everybody had a good reason to spend that one more dollar. Again, both sides. Even up to the 900B proposed today. So it is yet to be demostrated by either side.
I will be watching to see if they address the rcommendations that have been put forward by the commission to decide who to believe in 2012.
I will end the suspense for you Marty – come January 2011, no one will remember the commission or its recommendations.
Marty: So, hang on, first you say that everyone’s worried about “The Deficit”, and now you’re saying nobody’s really worried about “The Deficit”, which seems like it undermines your entire post you made earlier, about how “EVERYONE” is concerned about “The Deficit” and would have to deal with it soon.
Which is it? Are people REALLY TRULY HONESTLY WE MEAN IT THIS TIME concerned about “The Deficit”, or is it just posturing and a political weapon to wield against things they don’t like that will cost money?
“Thins that cost money” consisting of tax cuts, or some kinds of spending, if we’re taking your claim that both sides are just as bad, which neither history nor current actions actually support. If anything, certain Democrats are too concerned about “The Deficit”, IMO, or at least too ready to be not concerned when it comes to things like tax cuts that only benefit rich people.
Even Obama campaigned on a ‘tax other people’ plan when he promised not to raise middle class taxes.
Relative to what would have happened if the Bush cuts had simply expired, Obama’s plan would have lowered everyone’s taxes. Tax rates on income above a certain level may have returned to what they previously were, but you’d have to make the dollars taxed at relatively lower rates before getting to that level. (And we don’t have tax rates for people, we have have tax rates for incomes. We are all subject to those rates to the extent that we make the applicable income.)
“Which is it? Are people REALLY TRULY HONESTLY WE MEAN IT THIS TIME concerned about “The Deficit”, or is it just posturing and a political weapon to wield against things they don’t like that will cost money?”
Both. They are truly worried about the debt, caused by the deficits, and they are posturing to reflect that concern in an environment where they can’t do much about it yet. Not a hard concept.
But they can START doing things over the next 18 months to convince me they WILL do something about it.
@Rob in CT:
The payroll tax holiday is pretty neutral, possibly a win for the Dems.
That’s one way of looking at it…
“Both. They are truly worried about the debt, caused by the deficits, and they are posturing to reflect that concern in an environment where they can’t do much about it yet. Not a hard concept.”
Except it has no evidence to back it up. Why would they bey truly worried about debt now, when none of their actions previously have shown them to be? Republicans have postured about “The Deficit” and threatened not to raise debt ceilings and all the rest before, but the instant tax cuts were possible, all those objections went out the window. Many of the Senators and Representatives voted for the Bush tax cuts originally that got us back into deficit, and not one said anything about paying for renewing them, and fought hard to get the parts that only benefit a tiny portion of the country through.
Maybe I’m asking too much, maybe I’m asking for mind reading, to ask why you think any of the politicians talking about “The Deficit” are really worried about it. So, instead, why are YOU worried about debt and deficits now? And if you are so worried about them, why are you approving of this latest set of tax cuts, unemployment extensions, etc, given that it will add billions to the debt?
And what do you think would be proof that they’re Really Concerned This Time about the debt? Since you can’t know their minds other than their actions, but whose should you know better than your own?
“And if you are so worried about them, why are you approving of this latest set of tax cuts, unemployment extensions, etc, given that it will add billions to the debt?”
I approve of spending the money in the short term and putting in place structural changes to reduce the debt over the medium term. I worry about both things but the surest way to reduce the debt is for the economy to expand faster, generating more revenue at whatever tax levels you are at.
In fact, without economic growth you really cant get there from here. My view will be based on what we do with the increased revenue as the economy grows.
In Reagan’s second year in office the Democrats wanted to increase taxes. He agreed if they gave three dollars in spending savings for every extra dollar of revenue the tax increase brought in. They both held up their end of that bargain. The savings were incurred over several years but they found them.
That was leadership on both sides.
That was leadership on both sides.
And yet, this was also a period of sustained high deficits. I see that as the period when leadership on this issue went out of the window- the GOP learned that they could run endlessly on cutting taxes, and the Dems learned that they could bargain those tax cuts against not controlling spending.
Jacob, I understand that you’re very frustrated, but hauling out the tired old class warfare trope to see if you can beat it around the track for the amusement of everybody in the cheap seats isn’t really going to do much to advance the discourse.
Are there constituencies that the two parties need to serve? Yes. But for every money-grubbing plutocrat raking in untold lucre on the backs of the working guy there’s a redistributionist slacker who wants his existence maintained with other people’s money. There’s a grain of truth to both of these old cliches (that’s how they got to be cliches), but these arguments are fundamentally unproductive.
So let’s see if we can boil this down a little and look at it a little differently:
If you’re going to claim some particular moral virtue for one side or the other, we’ve ultimately got nothing to talk about. On the other hand, if you want to talk about what policies actually promote the common welfare, and what the undesirable consequences of those policies are, I’m all ears. The real problem is, and continues to be, the Republicans’ unwillingness to cut spending commensurate with their tax cuts and the Democrats’ unwillingness to raise taxes commensurate with their spending increases. These are fundamentally conflicts between core beliefs and the maintenance of political power; in short, they are corruption problems on both sides of the aisle.
The Left took a heavy hit yesterday. Frankly, the deficit-hawk portions of the Right took a pretty heavy hit, too. I think they call that a compromise. So I understand your frustration. But all your arguments get degraded when you’re furiously angry. It makes for bad rhetoric in addition to bad policy.
But if your goal was to deter future kidnappings, you’d go after the son of a bitch the minute he let the kid go.
Tony, in this analogy the kid is never let go. The GOP still has the ability to filibuster everything plus control of the house soon.
The analogy breaks down- what is needed is a public that understands the finances of the government, but what we have is a public consistently and intentionally misinformed by media outlets more interested in sensationalism than information.
Where is the Republican saying the Dems held the tax cut extension hostage to the payroll cut? There is absolutely no good faith on the Democrats side.
The Dems tried to pass a bill extending the tax cuts on income below 250k. iirc the GOP filibustered it (or threatened to). So what you said would be untrue.
If you said “the Dems held the tax cut extension on income above 250k hostage to the payroll tax cut”, that would be true, but when you say it out loud it doesn’t sound so bad.
No one has any evidence that anyone means what they say about the deficit or the debt, either side.
Well, Ive got this- the Dems do actually seem to want to raise taxes (or allow the cuts to sunset) in the medium term, to increase revenue. It’d be easy for them to take the GOP position- (“let’s cut taxes today and talk about spending cuts tomorrow!”), run up the deficit, and let someone else figure it out. I don’t see a lot of upside for the Dems to tussle about this issue, except that the Dem base appears to recognize that revenues must be made to match expenditures at some point.
When I see the Greens marching down the street with their “keep your dirty federal hands off of my National Parks” or the teachers’ union marching with “keep your dirty federal hands off of the Dept of Education” then we can talk.
“In Reagan’s second year in office the Democrats wanted to increase taxes. He agreed if they gave three dollars in spending savings for every extra dollar of revenue the tax increase brought in. They both held up their end of that bargain. The savings were incurred over several years but they found them.
That was leadership on both sides.”
Yet despite this leadership from both sides, and this happy little story, the US total debt (adjusted to 2010 dollars) in Fiscal year 1982 was 1.9 trillion, in FY 1983 it was 2.2 trillion, and in FY 1984 it was 2.4 trillion, if I’m reading the charts available here right.
Spending those same years (adjusted to 2010 dollars) was 1.25, 1.29, and 1.3 trillion. So I’m not sure I quite understand how the math of that anecdote works out, or what else it leaves out.
TheRadicalModerate, I understand that you’re very frustrated, but hauling out the tired old “both sides are equally bad” trope to see if you can beat it around the track for the amusement of everybody in the cheap seats isn’t really going to do much to advance the discourse.
“Well, Ive got this- the Dems do actually seem to want to raise taxes (or allow the cuts to sunset) in the medium term, to increase revenue.”
On other people, not their core voters. That is of course about as easy as Republicans talking about cutting programs for people that don’t vote for them…
The conservative/Republican vision holds that small government best serves the country, and the instrument for achieving small government is to deny it resources. The liberal/progressive/Democratic vision holds that a large government can best serve the country, and the instrument for achieving large government is to enact programs–especially entitlement programs–that force increases in revenue.
The real problem is, and continues to be, the Republicans’ unwillingness to cut spending commensurate with their tax cuts and the Democrats’ unwillingness to raise taxes commensurate with their spending increases.
Thanks Mr.Broder- the first problem I have with this is that the Dems have enacted only one signficant social program since LBJ (HCR), and that was projected to actually produce a cost savings. The GOP has cut taxes several times since then, and continues to argue forcefully for permanent lower taxes.
So it’s just not the case that the Dems are ‘enacting programs that force increases in revenue’. We are, for the most part, trying to 1)keep the existing programs and 2)cope with the underlying changes in healthcare costs.
Second, you’ve also misportrayed the GOP position- it’s not just low taxes and small government. It’s low taxes, small government- but without touching anyone’s social security or medicare!- and a big “defense” coupled with budget-busting military adventurism. If there’s a vision for a GOP future that involves a balanced budget, Id love to hear it.
If there was a GOP that really wanted to cut taxes and also articulated a smaller government, Id probably oppose that on ideological and practical grounds. But there is no such beast- they’ve even refused to embrace the Ryan plan, which while fundamentally flawed, is at least a starting point in the discussion about what the GOP’s vision for the future actually looks like.
I don’t believe that the Republicans, either the Old Guard, or the Gingrich Republicans, or the Tea Party Republicans are concerned about the deficit and the debt at all. Their actions have shown otherwise, repeatedly, for more than a decade.
It’s manifestly clear than they didn’t and don’t care about debt. But,’More than a decade’? Technically correct, but when it’s actually *three* decades of deliberate debt build up, it sounds a little misleading.
The Democrats only look good on this [tax] issue in contrast to the Republicans.
So refreshing to agree with Sebastian for a change. But I hope he and other sensible conservatives remember than quantity can affect quality. Being somewhat prolifigate and massively so produce two very different qualities.
The top 1-2% of earners are nobody’s “core voters”, it’s too small of a block. OTOH, they are everyone’s core donors.
And, it’s important to remember that unless we’re talking about raising taxes on white evangelicals or lowering them on black people, most partisan blocks break like 60/40 in one direction or the other- it’s not the case that 90% of the top 1-2% of earners vote for the GOP iirc.
If you limit the term “government” to include only social programs, then, yes, the GOP wants small government. If you include defense, corporate subsidies, incarceration and intrusiveness with regard to private sexual behavior, not so much.
When your entire “brand” revolves around being “moderate,” you’re pretty much forced to hammer that trope.
So then, because thou art lukewarm, and neither cold nor hot, I will vomit thee out of my mouth
Revelations 3:16, foretelling the Coming Of The Broder
Estate taxes had run out, they were ZERO, something is now in place.
Zero estate tax was on schedule to expire in 2011, to be replaced by a return to 55% on estates over $1 million.
Did you not know that? I’d actually like to know, because it’s kind of the difference between your being misinformed, and your arguing in bad faith.
Oh. It sounded a lot like what you said.
Understood.
The point of my 6:12 was to clarify that, sorry that mission was not accomplished. I will continue to try to fail better.
I’m not sure exactly what you’re after, though.
What I’m looking for from people who insist that government be reduced in size and scope is for them to actually be willing to sacrifice programs they benefit from.
For example:
I’m willing to, for instance, means-test SS payments so as not to hand out money to folks that really don’t need it as much (this includes me, if I turn out to be one of those people).
Assuming that would potentially cost you something, that’s precisely what I’m looking for from conservatives.
It indicates good faith.
So, thanks.
Since Republicans are also adamant about getting rid of all social programs because they think that the “poor” are lazy, this seems like a bad idea. Better to simply tax Social Security payments as income so that the well-off like yourself will simply pay higher marginal rates on that income if you make so much that you don’t “need” it for a dignified retirement.
This kind of response is pretty much case in point of why I think we’re unlikely to reach any kind of agreement as regards making ends meet.
Not casting blame, just pointing out that our respective parties are so busy putting nonskid surfaces over anything that looks as if it may, someday, turn into a slippery slope that they’re just not going to get anything at all done.
And then they blame the other guys for keeping them so busy treading water, to completely mix & mangle metaphors.
On UI it seems I was wrong there is no extension in this for the 99ers. That is a problem whichever side you are on.
On UI it seems I was wrong there is no extension in this for the 99ers. That is a problem whichever side you are on.
That does seem to be a bit of a problem, but we’ll add it to the “oopsie” section of the deal along with the “increases taxes on people making less than $40K a year” part.
What’s important is that the 35% top marginal rate stay there, the estate tax remain at its lowest level since FDR was President (other than the bargain being offered to you this year if you’re willing to kick the bucket), and hedge fund managers get to continue treating their ordinary income as if it were capital gains.
TRM: hauling out the tired old class warfare trope
This is funny.
TRM: your arguments get degraded when you’re furiously angry
This is funnier.
The only class war I’m interested in dealing with is the one certain members of the top 0.1% of the population are waging on everyone else.
I’m not offended by wealth in itself at all. I think there are economic problems that show up with very unbalanced inequality like we’ve moved towards in the last few decades, and there are (largely solvable) welfare problems for those at the bottom end of the income scale. Fixing both of those requires a certain amount of “sacrifice” from the wealthy, but it’s not the kind of sacrifice that involves having your head cut off and put on a stick and your estates seized by red-flag-waving peasants. It’s the kind of sacrifice that means you might have to consume slightly less of the meaningless status products you use to compare yourself to other wealthy people with; luckily, they’ll all have to buy less of them too, so you won’t notice.
That isn’t class warfare. It’s capitalist social democracy, as practiced in the United States for most of its history and in much of Europe for most of the last century to resounding success. It’s boring. It doesn’t involve heads on sticks.
What’s important is that the 35% top marginal rate stay there, the estate tax remain at its lowest level since FDR was President (other than the bargain being offered to you this year if you’re willing to kick the bucket), and hedge fund managers get to continue treating their ordinary income as if it were capital gains.
It’s good to be rich, and this just makes it that much gooder.
It’s good to be rich, and this just makes it that much gooder.
It’s the golden rule: he who has the gold, makes the rules. I’m just shocked they didn’t lower the corporate tax rate in the “deal” too.
I’m shocked by that, too. We do have one of the higher corporate tax rates.
Really?
–Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
Your link shows a corporate tax rate of almost 40% but the actual effective corporate tax rate is more like 28%.
Which number is more relevant, the top statutory rate or the rates that corporations are actually paying?
Awesome:
Legislation taking shape in the U.S. Senate to extend expiring tax cuts would give heirs of wealthy people who died this year a choice of which estate-tax policy to apply, according to an aide close to the discussions.
Estate executors could choose to apply the rules in place this year, in which there is no federal estate tax, or the rules that would take effect next year imposing a 35% tax rate on estate wealth over $5 million. …
Under the deal struck between Senate Republicans and the White House, the estate tax would return in 2011 but with an exemption for the first $5 million. In a difference from 2010, heirs would also receive a “step-up” in basis for those assets.
Given the choice, some estates would be better off electing the 2011 rules, especially those that would escape most or all estate taxes because of the $5 million exemption and would otherwise face troubling capital gains taxes under the 2010 rules.
It would be nice if the WSJ could hire someone who knew the difference between the tax rules that apply to on estates and their heirs, but good help is hard to find these days I hear.
I do like the word “troubling” thrown in there, for no apparent reason.
It would also be nice if I could hire someone to proofread my comments.
Mechanical Turk
That’s a good point. I wonder how the effective rates of all those other countries compare with our effective rates.
Interesting that Google is heavily on the dodge. “Don’t be evil,” indeed.
I wonder that too, a quick evil Google search didn’t get me the numbers I wanted.
The closest thing I saw was this CBO report (PDF) that had corporate income taxes as a percentage of GDP, the US is well below the average.
Marty,
I need to point out that you are completely wrong about what the UI extension that is being discussed is.
The UI extension under discussion is a continuation of the UI extension to 99 weeks (that is, not letting the extension lapse and have everyone who has been on UI for more than 26 weeks drop off the rolls). The possibility of continuing UI beyond 99 weeks is not under discussion.
The UI extension has lapsed, and everyone who has been unemployed for more than 26 weeks is no longer getting unemployment. The Republicans are willing to trade restoring the existing extension in order to get a continuation of tax cuts for the rich, but they are not willing to extend UI beyond 99 weeks (and no one has proposed it).
It is understandable that you are ignorant of this, since it appears that many Republican senators are also ignorant of it, but I can’t let this (presumably accidental) disinformation pass.
Marty,
Ack, sorry, I missed your self-correction on the UI extension question.
In the context of the impending DADT and DREAM votes, which would have never happened without some kind of capitulation (remember, ALL the GOP senators signed onto the hostage pact), I think it’s safe to say that the Democrats are in support of gays, minorities, and the unemployed and are willing to make major ideological sacrifices to tangibly improve the lives of those demographics.
1. What Charles S said above. I might add that unemployment benefits are indeed “funded” by a wage tax (SUTA), but I guess Marty is living off dividend income alone. It’s called unemployment insurance for a reason. Theoretically, when the U-rate goes down, the tax flow offsets the negative cash flow incurred during hard times (but from a MMT perspective that, too, is incorrect).
2. Perhaps some of the participants here, especially some self styled progressives, will look at this deal and come to the realization that the deficit and/or the debt is a smoke screen to distract from the redistribution of real output to those who simply have no reason to have so much of it. To talk about “shared burdens” is to join those in the belief their is a ‘burden’ to begin with. The real burden is this: Some of us get way more than most and, beyond bending the rules of the game, don’t do a whole lot to get it.
3. I love the “you’re making the perfect the enemy of the good” arguments. It’s simply amazing to see this hoary old aphorism dusted off and waved in front of us like waving a shiny object to remind the listener that yes indeed, YOU are powerless–so get over it.
As the World Turds,
Yes, that’s right. But so is Germany, when you look at the tax as percentage of GDP. In fact, Germany’s corporate tax revenues as a fraction of GDP is just a bit more than half that of the US.
Interesting Section 1 text, there. They seem to be saying that the impact of corporate tax on the economy is not worth the revenues collected.
On UI it seems I was wrong there is no extension in this for the 99ers.
That sucks. About ten percent of the folks who are unemployed have been out of a job for more than two years.
They will get nothing from the rest of us. They are going to be living in their cars, or on somebody’s couch.
A million and a half people.
Heard some Cato guy on the radio asking, “Just how long are unemployment benefits supposed to last?” It was, he said a reasonable question.
My reasonable answer is “as long as unemployment lasts”. At least while things are the way they are now.
So, looks like the way the “deal” plays out is everybody keeps Bush tax rates, inheritance tax goes to 35% on estates above 5 or 10 million instead of the intended 55% on estates of 1 million, working folks trade the Make Work Pay rebate for 2% off of their FICA, and the big plum for progressives is that we don’t kick everybody who’s been out of work between 26 and 99 weeks to the curb.
And none of it is paid for.
I agree with Marty, this is the best deal that was probably available, and I give props to Obama for making it happen and not just letting the whole situation melt down.
He’s a good executive.
But it by-god sucks that this is the best possible deal. It absolutely sucks.
Any entrepreneurial types reading this who support the extension of the Bush cuts, I personally expect you to take whatever money you save and hire somebody in the coming year. That’s the reason you’re getting the money, that’s reason you said you needed it, and you by god better spend it right.
This country has become a nation in thrall to a bunch of greedy mf’ers, people who do not give a single solitary crap if any of the rest of us live or die. It makes me freaking sadder than I can tell you.
Any entrepreneurial types reading this who support the extension of the Bush cuts, I personally expect you to take whatever money you save and hire somebody in the coming year. That’s the reason you’re getting the money, that’s reason you said you needed it, and you by god better spend it right.
Ha! Good luck with that! Unfortunately, that plan might cut into the planned C-suite compensation:
Do read it all, it’s delicious.
That sounds just awful. But you know what it could be? It could be that State Street, like pretty much every other financial management firm, sees a pretty dismal next year or more, and is bracing in advance.
Which, if that’s the correct interpretation, does not bode well for any of us.
Being that I work in the “FIRE” industry, I’ll share that in the context of a “state of the world” conf. call recently, our best & brightest think 2011 is gonna suck.
In an internal e-mail, chief executive Jay Hooley explained the strategy as necessary to “enhance service excellence and innovation’’ and drive “a stronger sense of urgency about getting things done.’’
Like the jewelry store in the Donald Westlake novel with a sign on the door reading “Gone on vacation to serve you better.”
From Phil’s link:
State Street was also able to tap into billions of dollars the US central bank made available in the fall of 2008 to avoid further financial chaos. The Fed can’t lend money directly to money markets. So it used 11 large banks, including State Street, as intermediaries. The banks used the Fed money to buy securities from money market funds, giving them cash to repay clients.
As reported last week by The Globe, State Street bought $86 billion in investments from clients such as Eaton Vance Investment Managers, T. Rowe Price, and Columbia Funds. It held those investments until their maturity dates and earned $60 million in investment profits.
They took public money, made $60 million on it, and then fired 1400 people. The CEO’s compensation in ’09 was almost $14 million bucks. That was before he was CEO, now I’m sure it will be higher.
One guy, over a million bucks a month.
Their profit this year was $427M, up 20% from last year. That’s an increase of about $72M.
$60M of that came from taking public money, investing it, and keeping the profit.
And among the ways they made use of those profits were to pay one guy over a million bucks *a month*, and fire 1,400 others.
It could be that State Street, like pretty much every other financial management firm, sees a pretty dismal next year or more, and is bracing in advance.
How fortunate for them that “bracing in advance” is an option.
our best & brightest think 2011 is gonna suck.
What do they get paid for having these brilliant insights?
15 million people in this country can tell you 2011 is gonna suck, and they’ll impart this wisdom for free.
This is, after all, the same company that paid out a half billion dollars in bonuses last year.
15 million people in this country can tell you 2011 is gonna suck, and they’ll impart this wisdom for free.
russell, you are (rightly) appreciated on this blog for your sang-froid all-around nice guyness, but I gotta tell you: I’m liking the anger.
This is, after all, the same company that paid out a half billion dollars in bonuses last year.
State Street is a publicly traded company. NYSE:STT.
The thing that nobody seems to get is that *it’s not their money*. The assets under their control belong to other people, their job is just to find productive uses for them. The profits they make belong the shareholders, not to them.
We need to “pay well” to attract “the best”? They took billions of public money, parked it somewhere, and put the net in their pockets.
Your average housecat could manage that gig.
It’s not their company, they are not managing their own assets, it’s not their money.
I have absolutely no problem with wealthy people per se, but the FIRE sector @ssholes really make me want to go blow stuff up.
It is not their damned money.
I have no idea, Russell.
In the case of our particular company, AFAIK we didn’t take a dime of public money (we’re not a bank and we weren’t in trouble) and our investments are extremely conservative. Because we have to be able to pay claims, it’s intelligent to be conservative with the invested money. Our best & brightest were at least intelligent enough to play things safe even as other companies weren’t. That might not make them supergeniuses, but damn I’m happy they were at least not morons.
Our CEO makes more than $1mil a month. It’s ridiculous, of course.
our respective parties are so busy putting nonskid surfaces over anything that looks as if it may, someday, turn into a slippery slope that they’re just not going to get anything at all done.
Look, dude, this isn’t about our parties: it’s about America. We don’t think it’s worthwhile to help poor people. But we do think it’s worthwhile to help ourselves. So we Americans will support government programs that we use and benefit from and, when times are tight, cut back on programs that only poor people benefit from. So you don’t means-test Social Security. You just tax social security income as part of your overall income in retirement, cycling it back into the system.
For some of us, this is “the future” that we were talking about last time and the time before that and the time before that. I dunno, maybe Obama really is just now noticing that the GOP is run by hostage-taking bad-faith negotiators. It’s certainly not the first time I’m noticing Obama’s reluctance to do anything at all that might deter future hostage-taking.
Good point. Anybody who isn’t already clear about which of the above strategies Obama finds more congenial might want to resolve, along with Tony, to pay attention to what happens after the Bush tax cuts are
made de facto permanentextended in exchange for the one year UI extension (and no, the payroll tax cut doesn’t count as a “concession” by the GOP). Fans of counterfactual analysis might also ask what visible differences would exist between this universe and an alternate one in which Obama vs GOP was actually a moderately sophisticated good cop/bad cop routine.In other news: “For every bird in the sky there’s a feathered descendant of dinosaurs flying through the air!” 😀
Interesting Section 1 text, there. They seem to be saying that the impact of corporate tax on the economy is not worth the revenues collected.
As a total aside, I’d be open to the idea of eliminating corporate taxes altogether.
Tax income when it flows to people, either as salary, dividends, or capital gains. If a corporation retains some earnings for expansion or investment (or just to pile up in great big stacks of $100 bills), so be it. Hopefully they’ll do something useful with it. If not, at some point it’ll find its way into somebody’s pocket, at which point it gets taxed.
And for crying out loud, just tax all income the same way. You make money, Uncle takes some to pay the bills. Period.
To me, that would greatly simplify the tax code, and get rid of the “double taxation!!” issue.
It would also, IMO, make the distinction between people and corporations clearer.
People: natural human beings who, among other things, receive taxable income.
Corporations: institutions that can own, buy, and sell property, but which otherwise have nothing in common with people.
So, a corporation becomes less like a person, and more just an instrument used to apply capital. Like a tractor, only with office furniture.
Like a tractor, only with office furniture.
What? Your tractor doesn’t have office furniture? How rustic…
Agree 100% with Russell. I’m all for dropping corporate taxation but also taxing cap gains as normal income (and ripping the deductions out of the tax code, and getting rid of subsidies, etc).
…
“Look, dude, this isn’t about our parties: it’s about America. We don’t think it’s worthwhile to help poor people. But we do think it’s worthwhile to help ourselves.”
There was a chart floating around (saw it on Sullivan’s blog) that had unemployment levels and % of the electorate divided up by “no high school diploma” “HS diploma” “Some College” and “Bachelors or more”
It makes sense to me that the groups that vote (reliably) are going to be catered to. As much as super rich campaign contributors? No, probably not. But a heckuva lot more than people who don’t vote.
Me, too!
Uh oh.
Without having thought about it a lot, I’d say that you could go a long way toward silencing the death-tax lambs if you took a capital-gains approach to it: tax property inheritance only when it’s been turned over for gain. But then tax it as regular income.
So the breaking-up-the-family-farm objections should go away, unless those farms have bales of cash stacked up in the barn. In which case: you’ve got the cash to pay the tax on the cash transfer.
I’d say that you could go a long way toward silencing the death-tax lambs if you took a capital-gains approach to it
More than meets the eye there, because of the step-up in the cost basis for calculating the capital gain that normally goes along with paying the inheritance tax.
I say “normally” because (if I understand correctly) the step-up has been cancelled for 2010, along with the tax.
So, if dear old dad paid $10K for the family manse back in 1960, and it’s worth $800K now, and you sell it five years from now for a million, your cap gain is $990K, not $200K.
So, for this year and only this year, we actually do treat it on a cap gain basis. And, a lot of folks will end up, long run, owing more than they would have if they had just paid the inheritance tax.
Tricky buggers, those tax law authors.
Just now, Lamar Alexander was on my radio.
He told the (N)ice (P)olite (R)epublican audience that:
1) It’s good that 25% of the GOP/Obama deal’s benefits flow to the top 1% of Americans because those are the “job creators”. He repeated the standard GOP lie about “small business”.
2) The top 1% are not getting tax CUTS, because the current rates have been the law for 10 years now. Neither he nor the interviewer mentioned that “the law” he referred to ALWAYS INCLUDED THE SUNSETS.
The interviewer sweetly thanked him for his time.
I am past caring about the mendacity of the GOP. I am, however, furious at the stupidity of NPR. And I’m being charitable here: “stupidity” is the kindest interpretation of their lameness that I can offer.
–TP
Although you’ve made some good cautionary points, current-day rules probably would not apply to a hypothetical that requires a significant revamping of the tax code to make happen.
That said, your capital gain on a gift or property (real or otherwise) is the selling price, the way I envision it. It wasn’t yours to begin with. So: you inherit the family farm, which is comprised of acreage, buildings, farm equipment, animals, etc. After some time operating the endeavor, during which you pay ordinary taxes on the income from the farm, you sell the whole shebang and retire. What you pay taxes on is the sale price, because all of that stuff was gifted to you in the first place.
You can place a hefty exclusion amount on the basis (valuation of all property you were given) if you want; this is all imaginary right now.
So, say you’re given a farm endeavor worth $5M; you get to keep and operate it for a few decades, bypassing the dreaded had-to-break-it-up-to-pay-the-death-tax, and sell it for a tidy profit at $6M. You pay an effective tax on the property of about $2M, and wind up with a $4M nest egg.
Of course it’s not quite that easy, and some stuff you’ll have to depreciate, repair, etc. But you get the gist.
For things that are not businesses or real property, it works just about the same way. So, Uncle Ted dies and leaves you $10M in bonds, and you hang on to that for a good long time. Eventually you liquidate the bonds for (say) $12M. You net $8M; what’s not to like? Uncle Sam gets his cut, only some years later than he otherwise would have.
I’m probably making some huge mistake, here, but this seems fair. I know people who don’t agree with that, but it seems to address at least some of the concerns of both parties of adversaries.
To my slight amusement, the captcha on my last comment was “deth68”.
That said, your capital gain on a gift or property (real or otherwise) is the selling price, the way I envision it.
So, a “cost basis” of zero at the time you realize the gain, because your personal cost was zero?
Slarti, you’re starting to scare me. That’s way to the left of anything I would have dreamed of suggesting.
It does, however, have the benefit of being extremely reasonable.
You’re not misunderstanding me, russell, but it’s not an idea that’s all that disconnected with TANSTAAFL.
the payroll tax cut will come back to bite us on the ass when, instead of 30-40 years down the line, Social Security has a shortfall in 10-20 years. But of course, that’s what the so-called “holiday” is all about.
Frankly if there is anything in the world that will fix this economy it is simply this and it should be our mantra:
TAX THE RICH.
Teh King* wants to filibuster the whole ‘deal’ because it is too generous and the GOP should never allow the UI extension.
Bernie Sanders ironically thinks about joining him in the filibuster but he thinks the whole ‘deal’ is nothing but financially and politically irresponsible and that ‘nothing’ (i.e. all tax cuts expire as written in law**) would still be better.
*someone I really wish a slow and agonising death (since there seems to be no evidence for posthumous justice).
**I originally typed ‘as planned’ but that would require that I believe that the expiration clause was put into the law in good faith and not as a dual-use political tool (to get it through via reconsiliation AND to use it as a cudgel to beat the Dems over the head come expiration time).
You’re not misunderstanding me, russell, but it’s not an idea that’s all that disconnected with TANSTAAFL.
Yeah, that’s the beauty part.
I’m sure somebody with a much subtler understanding of tax law etc might be able to explain why it’s a bad idea, but it seems like a great idea to me.
You get something of value as a windfall. When you turn it into income, the income is taxed.
Easy peasy.
IMO there are significant opportunities for agreement across the aisle on the general idea of making the tax code simpler. In a perfect world, it would not require the help of highly paid professionals to understand what is taxed, why, and how much.
The regime we have now is a target-rich environment for gaming. So much so, that it’s actually hard to figure out if it’s fair or not. That’s a problem.
The only potential problem I see with Slarti’s scheme is that it might not be sufficient to prevent dyanstic accumulations of (capital) wealth over generations. The estate tax as it has been implemented has had a taxation trigger that was unavoidable (i.e. death).
Under the zero-basis scheme, you and your heirs and theirs simply never sell and never pay taxes. This obviously won’t work for everyone, but it could for enough families to be problematic.
Just one clarification – when I wrote “never pay taxes,” I was referring strictly to either estate or capital gains taxes on that which was inherited and not sold. Income gained from said capital would obviously be subject to taxation.
The only potential problem I see with Slarti’s scheme is that it might not be sufficient to prevent dyanstic accumulations of (capital) wealth over generations.
The question of whether there is a public interest in preventing private individuals, or families, from accumulating very large amounts of wealth is an interesting one.
I’d say there is such a public interest. I’d also say that income taxes, whether the income is earned, unearned, or inherited, are not a really effective way to address that.
If we want to use the tax code to discourage the accumulation of privately held capital, which is to say capital held by people, we should just tax wealth.
If you want to discourage people from earning, tax income. If you want to discourage people from accumulating big piles of wealth, tax wealth.
Sure, you can accumulate wealth. You just cannot convert it to cash without paying tax.
And what’s the point of having wealth if you can’t spend it? Family businesses that perservere and continue to generate income, tax revenue, and employment, on the other hand, are those such a bad thing?
I say: it’s worth a try.
But still, there are people who are notionally politically aligned with me that would absolutely hate this idea, because in their view the government has no business screwing with what you give your family. To me, the government can do exactly what we give it permission to do, so there’s no preexisting chalk-line that we can’t cross.
And what’s the point of having wealth if you can’t spend it?
Mark Twain had one answer to that question in The £1,000,000 Bank-Note.
A more realistic answer: wealth can be used as collateral; pretty much nothing else can be used that way. Borrowing against collateral is how you turn wealth into more wealth.
Family businesses that perservere and continue to generate income, tax revenue, and employment, on the other hand, are those such a bad thing?
No. But can we PLEASE get off this “family business” horsepuckey? Serious estates are not grandpa’s farm or daddy’s hardware store. They are not even the Ford Motor Company or the Hilton Hotel chain, per se. They are bundles of “financial instruments”, often organized as “trusts”. Sure, the trust’s assets may consist mainly of shares of stock in the “family business”, but those shares have value because they are publicly traded. Whether the stock of a publicly traded corporation is owned by YOUR mutual fund, or the family trust, or the founder’s grand-daughter personally, makes no difference to the business that “creates jobs” and generates tax revenue and so on.
The term “family business” is like the term “WMD” — a brand name designed to conflate wildly disparate things, in pursuit of a particular policy goal.
–TP
Sure. But then you have to pay it back. And if you have to liquidate the collateral to pay the loan, well, then it becomes income.
Sure, if you can show that it’s always horsepuckey.
Sounds like you have some vested interest in it being horsepuckey.
Slarti,
You have to pay back ANY loan. But loans against collateral always (and for good reason) cost less than loans without collateral. Imagine a business opportunity that has a probable 10% return on investment. Who is more able to exploit that business opportunity: the wage-earner who can borrow at 20% on his credit card, or the heiress who can borrow at 5% using her inherited wealth as collateral?
I know you’re near enough a rocket scientist, slarti, but this ain’t rocket science.
Sounds like you have some vested interest in it being horsepuckey.
When I figure out what that’s supposed to MEAN, maybe I can explain why it’s ridiculous. Any clarification would be appreciated.
–TP
Sure, if you can show that it’s always horsepuckey.
Does it always have to be horsepuckey? I think Tony’s point is that large inheritances are rarely what most people would think of as “family businesses.”
Shall I require you to demonstrate that it’s never horsepuckey, Slart? (God, I love typing “horsepuckey.”)
So your contention is, if I understand correctly, that because the Republicans finally agreed to these things after successfully holding them hostage to tax cuts for the wealthiest Americans for so long, that the assertions in the OP are incorrect–to wit, that Republicans don’t favor the wealthy at the expense of the working class?
No, that’s not my contention, catsy. My point is that Jacob’s graph is factually false, since the GOP actually agreed to those provisions in the tax deal that they were purportedly “against”. And I disagree with your premise that Obama was held hostage. Your party chose to wait until after the election to work on a tax deal. If there was a hostage-taking, it was of your own doing.
And here’s something else. Along the lines of my initial comment, the president you voted for agreed to extend tax cuts for the rich, and he agreed on reduced rates for the estate tax.
Is Charles, like, Not Red Enough for Redstate if he’s posting here again?
I was bam-sticked at Redstate, Phil. I called the Dems the No Party in 2005, and the GOP was the No Party in 2010. There’s no inconsistency here.
To me, the government can do exactly what we give it permission to do, so there’s no preexisting chalk-line that we can’t cross.
Hear, hear. There are hard exceptions enumerated in the Bill of Rights, other than that it’s whatever we negotiate among ourselves through legislation and legal precedent.
That is called “popular sovereignty”, aka, “government by the people”.
Thank you.
I was bam-sticked at Redstate, Phil.
That place is just no fun anymore. Welcome back!
That’s a good point, but I’m not sure it’s worth torpedoing a good potentially good idea over.
If you like, we could invent some kind of vehicle with rules that forbid borrowing against assets inherited in an estate, but I’d guess that’d add enough complexity that the whole thing would fail.
If on the other hand you’re willing to grant heirs to estate a bit of extra privilege in exchange for getting a bigger cut of the pile when it’s liquidated…is that such a bad thing?
I think I’d want to see the numbers on that. Granted, Wal-Mart is probably up around twelve sigma, but even if you’re right, wouldn’t treating inherited property as income only after it’s converted to cash potentially generate a lot more tax revenues than the current (I’m talking about 2009 code, here; I doubt that the 2011 code is going to remain in its current form for long) scheme?
I mean, if the idea is that inherited property and cash is income of some kind, doesn’t it make more sense to tax it as such? Treating the property as a business, too, permits you to do things like depreciate and assess capital gains, instead of forcing liquidation.
Probably, again, this is all wrong-headed. I’m just seeing where it goes. There are, for sure, problems with businesses whose assets are mostly salable inventory. I don’t know what you’d do in that case; anything you inherit would of necessity soon be sold, but the taxes would likely eat up all of your profit and then some.
Horsepuckey, horsepuckey, horsepuckey. That does feel good.
Charles Bird: Jacob’s graph is factually false, since the GOP actually agreed to those provisions in the tax deal that they were purportedly “against”.
Obama agreed to those provisions in the tax deal that he was against. Does that make him a supporter of the over-$250k tax cuts?
It was a compromise deal in which both parties to the deal gave up significant concessions to get something of greater value to them. I was noting what those things of greater value were for the respective parties.
To make the case that the GOP were not against employee-side payroll tax cuts and unemployment benefit extensions, you have to answer the question of why they didn’t vote for them before. There hasn’t been a vote on employee-side payroll tax cuts but there sure hasn’t been noisy Republican agitation for them. But there is direct evidence on unemployment benefits: when they were up for extension in July, every Republican Senator except the two from Maine voted against extension and every Democratic Senator except Ben Nelson voted for extension.
The ostensible problem was that they weren’t paid for, but clearly that is nonsense since they are preparing to pass the Bush tax cut extensions without the slightest hint of an offset to pay for them.
Obama agreed to those provisions in the tax deal that he was against. Does that make him a supporter of the over-$250k tax cuts?
Yes, because that was the deal he agreed to, Jacob. When push came to shove, the promises and pledges were cast aside and he punted. I’m not saying that’s a bad thing. He sat down across the table and worked out a compromise. Republicans like Krauthammer thought the GOP gave him the store, but I think Brooks’ take is better. I have a feeling that Brooks would have been bam-sticked at Redstate, too.
My point is that Jacob’s graph is factually false, since the GOP actually agreed to those provisions in the tax deal that they were purportedly “against”.
Well yeah. The fact that they are against them, but agreed to them anyway, is what makes it a deal.
Hogan,
It’s a deal, all right, but it’s not what I would strictly call a compromise. In a compromise you ask for 100, I offer 50, we compromise at 75. The GOP/Obama deal is more like this: I want 100, you want 100, let’s agree we each get 150 and charge the 300 to the national debt.
I’m not totally opposed to charging 300 to the national debt right now, mind you. Inefficient stimulus, right now, is better than NO stimulus, right now. But I am loathe to abuse the tongue of Shakespeare and Twain so far as to call it a compromise, like The Village does.
–TP
Slarti: If on the other hand you’re willing to grant heirs to estate a bit of extra privilege in exchange for getting a bigger cut of the pile when it’s liquidated…is that such a bad thing?
That’s a good question, so the answer is “maybe”.
One reason is that you and I don’t get quite the same deal: we don’t get to defer our taxes until later, even if we agree to pay a higher percentage later. And the reason for that is that “we” (the nation or the government, take your pick) don’t get to defer our expenses until later. What we defer collecting from the heir, you and I have to chip in right now.
Taxes deferred are taxes avoided for the same reason that income today is worth more than income tomorrow: the time value of money. The time value of money is real for the same reason that inheritance exists in the first place: humans are mortal.
Even inheritors of great wealth are mortal. Estates that go untaxed because they go unliquidated during the heir’s lifetime simply become dynastic concentrations of wealth — especially if you accept the proposition that one need not liquidate his wealth in order to enjoy the “privileges” that arise from merely owning it, including better opportunities to accumulate more wealth. So that’s a second reason I say “maybe” to your question.
This second reason (distaste for dynasticism) is of a slightly different character from my first reason (the time value of money), of course. It’s not a here-and-now reason; it’s a “long run” reason. As a mortal myself, do I really have to care whether wealth becomes ever more concentrated over generations? Maybe not.
–TP
That’s a decent point, and it applies to other things than inheritance. People who don’t make much money in general don’t enjoy the easy access to tax-deferral plans, nor do they in general have the spare income to salt away in such plans.
But then there’s that first few million that you don’t tax at all, that never, ever gets taxed.
Which are composed of: stable, lasting investments, businesses, etc, until they are turned over for capital gains. Not such a bad thing, I think.
I don’t expect that this is an issue that you and I will agree on, nor do I think that I’ve imagined something here that’s both flawlessly implementable and devoid of weak spots. But I do think that this is one of the reasons why we have such horrible disconnects in Congress; because both parties dig in their heels and refuse to consider that, hey, these other folks might have a decent point, and even though this particular law isn’t perfect, it in the long run results in more tax revenue.
Which I don’t claim is definitely the case, here, in the complete fiction of inheritance tax law I’m suggesting. It just might be.
Regarding the dynastic concentrations of wealth you seem to be abhorrent of: we already have that. And until you manage to implement a tax on wealth, we always will have the potential for that.
This is an almost week-old conversation: should I start in, or is that pointless?
Do what pleases you, Gary. But you don’t need me to tell you that, do you?
If you’re looking for an invite, though, consider one proffered, on a tray of silver.
“If you’re looking for an invite, though, consider one proffered, on a tray of silver.”
Priorities at this time suggest it’s fairly unlikely I’ll come back to this thread before it closes. Many thanks for the invite.
This thread has pretty much died, but just in case anyone was unclear on what skewed “deal” this tax bill was for those who don’t really need it, I give you this from Forbes:
If the Obama-Republican tax deal passes, 2011 could turn into the best year yet to be rich, tax wise.
Which, from a purely selfish standpoint, works for me. Highlights:
The 2010 $800 per couple Making Work Pay credit, which wasn’t available to the better off, will be replaced by a Social Security tax cut that will save a two-high-earner couple $4,272 in 2011. Meanwhile, the estate and gift tax regime will become even friendlier to wealthy families….
For 2010, the amount a still breathing rich person can transfer to his kids or grandkids without owing taxes remains the same as a decade before: just $1 million.
By contrast, under the version of the Obama-Republican deal introduced late Thursday by Senate Majority leader Harry Reid, D-Nev., the exemptions from the gift tax, estate tax and generation skipping transfer tax (the tax imposed on gifts to grandkids if their parents are still alive) are “unified”–meaning they’ll all rise in tandem in 2011 to $5 million, from the $1 million or so they would have been next year after the Bush tax cuts expired….
Moreover, rich folks with good estate planners will be able to transfer a lot more than $5 million per person, or $10 million per couple…. Even Republican staffers had assumed that the political price of gaining the higher estate tax exemption of $5 million and the lower rate of 35% in the Obama-Republican deal, would be restrictions on planning techniques such as the Walton GRAT (named after a member of the Wal-Mart founding family who used it)…
“You have just witnessed a great bank robbery,’’ [says Stephan R. Leimberg , a noted estate and trust lawyer who publishes a collection of e-mailed newsletters widely read by estate and tax planning pros.] “The doors of the Treasury have been thrown open. The Republicans have robbed the bank and the estate and gift tax (change) is the jewel of the robbery.”
Meanwhile, the list of expiring provisions that did not get extended includes things like Build America Bonds, exempt-facility bonds for sewage and water supply facilities, recovery zone bonds, a lower new markets tax credit (promotes investment in economically depressed communities), some income housing benefits, credit for alternative motor vehicles, credit for electricity produced at open-loop biomass facilities, credit for energy-efficient appliances is more stringent.
But at least business got their R&D credit along with the continued ability to leave certain income offshore without paying taxes (in a “temporary” provision that has been continually renewed since 1997).
Speaking of which, from today’s WSJ (typing from the dead tree version so no link):
Welcome to the world of the temporary tax code. In the late 1990s, there were typically fewer than a dozen tax provisions that had just a limited lease on life and needed to be renewed every year or so. Today there are 141….[I]f the compromise passes, the U.S. will have no permanent regime governing levies on salaries, capital gains and dividends, the Social Security tax, as well as a slew of targeted tax breaks for families, students and other groups.
IOW, tax policy in the United States is a bad joke.
An interesting poll on this subject was released today.
Interesting in that, while the high end tax cuts reflect the partisan split expected both the estate taxes and payroll tax cut were not split nearly as much on a partisan basis.
In fact, despite my expectations to the contrary, neither Democrats(37% for) or Republicans (42%) favored the payroll tax cut. (or Independents at 37%)
The estate tax was mrginally more popular among Reps(60%)than Dems (52%) although Inds were only for it at 48%.
Looks like a compromise to me.
Governing by polls again, are we?
BTW, support for the package as a whole is 68% for Dems and Independents and 75% for Reps.
Again, looks like a compromise.
“Governing by polls again, are we?”
No just pointing out that, when asked, both Reps and Dems worry about actually funding SS. They both are pretty split on estate taxes and they both favor, although by not equal margins, extending unemployment.
It is also interesting that Independents were about split on the high end tax cuts. Somewhere between Dems and Reps.
Again, looks like a compromise.
Yeah, nobody got everything they wanted.
Which is consistent with Jacob’s original post.
R’s demanded, and got, stuff for wealthy people. D’s demanded, and got, stuff for working people. Nobody wants to pay for any of it.
I guess you could argue that R’s also wanted an extension of UI, in which case it’s a clean sweep for them.
You could claim that that, in turn, is not quite true, because they wanted to extend UI but have the extension paid for. Apparently, however, they just didn’t want that badly enough to give up the top margin cuts.
So, what Jacob said.
Truly? While the Democrats controlled both houses of Congress AND the White House?
Formidable, indeed. And evil, of course.
“Nobody wants to pay for any of it.”
Except R’s and D’s and I’s were not in favor of NOT paying for SS. Funny how you missed that in all of this.
“what Jacob said”
Given the number of times I have said “What russell said”, that means a lot to me.
I was thinking what I could have said instead of “AGAINST” in that chart. “DON’T CARE”? But as I said above, all but two Senate Republicans voted against the last UI extension. (Nominally because it wasn’t paid for, but again, that is never a problem when it comes to tax cuts.)
Similarly there was never a serious proposal for employee-side payroll tax cuts from the Republicans. They might like it for its supposed undermining of Social Security (I am not at all convinced of that threat given the way it was done) but I seriously doubt they would have voted for it without a corresponding employer-side cut.
(Which of course would have done nothing. Employers do not suffer from too-expensive employees. They suffer from a lack of demand.)
I am more optimistic about this deal than e.g. Krugman and DeLong and Baker and a lot of other people on the basis that it the low-end tax cuts and payroll tax cuts amount to a “bailout for the rest of us”; that is, even if they’re not spent and just go to paying down debt, that is an important thing that will strengthen the economy. Deleveraging is important. The banks got to deleverage using the government’s ability to borrow (TARP + ZIRP + trading total garbage for hard currency at the Fed); maybe now it’s our turn.
Truly? While the Democrats controlled both houses of Congress AND the White House?
Hey, I’m just quoting Forbes quoting the Estate & Gift guy (okay, I did put in the bold).
I’ll tell you this right now:
Whatever tax cut I get (if any) is just going to get saved. I might throw some extra money at my mortgage payments. I might buy a CD. Perhaps I might buy some stock. It will not, however, impact my spending on goods/services one bit. Why? Because I already have plenty of money to buy the goods/services I want or need. This would simply be surplus.
Um, yay?
Two things: The tax proposal hasn’t been signed into law and, with regard to the senate, a simple majority is not control.
Ah. The estate tax repeal was actually passed back in 2001, so: evil Republicans after all.
Except R’s and D’s and I’s were not in favor of NOT paying for SS.
The objection to “not paying for” the SS rebate was a concern that it would deplete the SS trust fund.
So, the shortfall in SS revenue will be paid back out of general fund dollars.
Can, meet road, further down.
I’m less freaked out by the deficit than some, although I think it deserves attention. So, the fact that nobody wants to pay for anything doesn’t mean, to me, that this is automatically a crappy deal.
IMO it probably is a crappy deal, just not necessarily for that exact reason.
I just notice what folks are and are not willing to give up, when the rubber meets the road.
To repeat: what Jacob said.
Rob in CT, you mean you’re not going to create jobs with that extra cash? Who’da known?
Ah. The estate tax repeal was actually passed back in 2001, so: evil Republicans after all.
Yes, but I think Ugh’s quote was referring to the latest modification under the Obama-Republican proposal. Without legislation, estate taxes go back to 55% with $1M exempt in 2011. The deal makes it 35% with $5M exempt. (Man, did I have trouble typing “exempt.”) So: evil yet again.
Which reminds me, there’s only 17 days left to throw grandma from the train.
Did the Republicans really mean to institute a National Year of Hoping Your Rich Grandparents Die Quickly?
Remember: Family Values!
That may very well be, but I’d tend to think that because the fellow who said it is an estate planner, and would would presumably be speaking to realities as opposed to potentialities.
“I just notice what folks are and are not willing to give up, when the rubber meets the road.”
After months of saying this,I think you should be pleased that people, while not wanting to give up SS, prefer that we pay for it. But no, there is something wrong with that too.
and would would presumably be speaking to realities as opposed to potentialities.
Well, given the state of flux the estate tax has been in, estate planning has had to take into account many a thing as of late, real, potential, and uncertain.
Did the Republicans really mean to institute a National Year of Hoping Your Rich Grandparents Die Quickly?
Not really. I mean, that’s what they voted for, but it was widely believed at the time and up through all of 2009 and the first half of 2010 that there would be some estate tax “fix”, such that it wouldn’t expire in 2010 (retroactive fix if need be). It seems most everybody was wrong and thus there might be a nice black market in 2010 Death Certificates in the first few months of 2011, especially if the “deal” doesn’t pass (everyone seems to think it will pass, but see above about everyone being wrong before).
That may very well be, but I’d tend to think that because the fellow who said it is an estate planner, and would would presumably be speaking to realities as opposed to potentialities.
But the current reality is that the estate tax will revert to 55% with $1M exempt in a couple of weeks, short of potential legislation. That would be an odd way to rob the treasury.
After months of saying this,I think you should be pleased that people, while not wanting to give up SS, prefer that we pay for it.
I guess the point is, they aren’t paying for it. Funding the SS tax deduction from the general fund just means the general fund will be that much more in the hole.
If you’re asking what would please me, I’d like to see either all of the Bush cuts expire, or at least those on the upper margins, and I’d like to see the emergency unemployment program not only kept in place but expanded to help out people who have been out of work for more than 99 weeks.
Why? Because (a) we need the money, and (b) there are about a million and a half folks who have been out of work for more than two years, and we should help them get through what is a historically disastrous employment market.
That’s what makes sense to me. I got none of my wishes. C’est la vie.
If you’ve got ’em, anyway. I’ve got one living grandparent, and he made his fortune as a postal carrier. The rest of the lot were a housewife, a piano teacher, and a logging-truck driver. The logging-truck driver’s replacement worked for the railroad, IIRC, so he might have had some sort of pension. But that’s gone, I imagine.
Very slim pickings in the Slarti ancestral tree, in other words.
Which is not so bad, as I’ve never wanted anything that belonged to my grandparents, or parents, and I’ve never wanted to court-wrassle my siblings and various aunts & uncles over anything at all.
Being born to a large, mostly poor family has been a blessing, IMO.
Very slim pickings in the Slarti ancestral tree, in other words.
Likewise.
My mother actually came into a small inheritance, low five figures, shortly after she passed away.
It kind of sucked, because she never had two nickels, as they say, and she might have enjoyed her tiny stroke of luck, had she known about it.
Not to be.
As it turned out, the state of AZ took it, as payback for taking care of her. She died of a debilitating illness, the AZ version of Medicaid paid for her care in the last couple of years of her life.
I was happy to see it spent on her, one way or the other.
Slarti (way back): Regarding the dynastic concentrations of wealth you seem to be abhorrent of: we already have that. And until you manage to implement a tax on wealth, we always will have the potential for that.
We actually do have a “tax on wealth” in this country, though not at the federal level and only on a particular form of wealth. It’s called the property tax.
The property tax is usually levied at the most local level of government — i.e. the level closest to the people. We can argue over whether it belongs in the same discussion as the federal estate tax. One reason I say it does is that every person I know pays all his taxes, local to federal, out of the same pocket. Another reason is this: if Americans are willing to tolerate a particular wealth tax at the local level, where their individual voice in government is loudest, then a general wealth tax at the federal level might not be out of the question.
A wealth tax would of course mitigate or eliminate all the brouhaha over the “death tax”. Your “estate” is simply your post-mortem wealth. A wealth tax — i.e. a pre-mortem estate tax — would be different in timing, not in kind.
But who am I kidding? Timing matters, and the wealthy know it. More importantly, the argument is not over what form of taxation we should have. The fight is always over how to divvy up the total tax burden. The wealthy, like the not-wealthy, will always fight to shift the tax burden from their class to the other class.
It doesn’t matter how low we make “government spending”. It doesn’t matter how small a fraction of GDP we make the government budget. There will always be some aggregate tax burden to pay, and no matter how small it gets, the rich will fight to pay as small a fraction of it as possible. This fight is not “class warfare”, of course. Perish the thought.
–TP
From Tocqueville, Democracy in America, which as it happens I was reading on the bus home last night:
Of course the Tea Party, who are experts in what early America was all about, have a different take:
Odd bunch, really.
“Tocqueville, Democracy in America”
It’s as good as they say it is; the first volume somewhat more so, as I recall.
Screw it. Let’s do it old school.
Tax booze, tobacco, sales of real property. Put nickel and dime usage fees on every federal transaction.
And put big fat tariffs on every international transaction.
Do you like your Chinese-made big TV? Pay an extra 25-50% for it.
Sin taxes, luxury taxes, and tariffs. That’s how the founders did it.
Good enough for them, good enough for me.
Jacob,
There are few interesting observations from Michael Mandel who points out how little we have invested in capital infrastructure over the last 10 years, and longer, including public infrastructure.
Information infrastructure has aged the most in the last ten years. Mining and agriculture the least. However, it continues to point out we need to promote enough private sector investment to help pay for the public sector investment needed.
It will not, however, impact my spending on goods/services one bit. Why? Because I already have plenty of money to buy the goods/services I want or need. This would simply be surplus.
Um, yay?
Good for you. I, on the other hand, will be dropping some more coins in the endless maw that are niece/nephew college costs, supporting the new restaurants in my area, finally getting an old E28 engine rebuilt, dropping the hair cut timeframe from 5 to 3 weeks between and bringing the maid in more often.