White House Gives In On Bush Tax Cuts

[RockX]

WASHINGTON -- President Barack Obama's top adviser suggested to The Huffington Post late Wednesday that the administration is ready to accept an across-the-board continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers.

That appears to be the only way, said David Axelrod, that middle-class taxpayers can keep their tax cuts, given the legislative and political realities facing Obama in the aftermath of last week's electoral defeat.

"We have to deal with the world as we find it," Axelrod said during an unusually candid and reflective 90-minute interview in his office, steps away from the Oval Office. "The world of what it takes to get this done."

"There are concerns," he added, that Congress will continue to kick the can down the road in the future by passing temporary extensions for the wealthy time and time again. "But I don't want to trade away security for the middle class in order to make that point."

It has been widely assumed that the president would have to accept an across-the-board deal of some kind, but Axelrod's remarks were the first public confirmation of that fact -- and by a figure regarded as closer to Obama than any other White House staffer.

http://www.huffingtonpost.com/2010/...es-in-on-bush-tax-cuts_n_781992.html#comments


Looks like somebody is worried about getting reelected in 2012. Reading the comments section at HuPo, they want to impeach Obama.

 

[Jarod]

Man, he is always willing to compromise way too soon. I am always pissed when I see him giving up on something important early in the game.

 

[Good Luck]

What I find interesting about this is the fact that for years the democrats labeled the tax cuts as ONLY for the rich. Tax cuts for the wealthy. In the 2004 presidential race democrats all over whined - and lied - about how the middle class got no significant tax relief at all from the Bush tax cuts.

Now the truth comes out: the middle class tax cuts were and are very real, and in fact, when it comes to effect on the people, were by far the larger part of the cuts. And Obama knows full well the "Remember in November" rally cry will hit democrats even harder if they allow the cuts to expire, regardless of the excuses they can put forward.

 

[Bonestorm]

What I find interesting about this is the fact that for years the democrats labeled the tax cuts as ONLY for the rich. Tax cuts for the wealthy. In the 2004 presidential race democrats all over whined - and lied - about how the middle class got no significant tax relief at all from the Bush tax cuts.

Now the truth comes out: the middle class tax cuts were and are very real, and in fact, when it comes to effect on the people, were by far the larger part of the cuts. And Obama knows full well the "Remember in November" rally cry will hit democrats even harder if they allow the cuts to expire, regardless of the excuses they can put forward.

Actually, when it comes to effect on the people, the rich did exceedingly well while lower income earners got much more modest net income benefits:

So, while the median income household got about a $1,000 tax break, high income earners got a whole hell of a lot more.

 

[Onceler]

Nice to see all of the praise from conservatives on Obama keeping his word regarding not raising taxes on the middle class.

Or maybe GL still thinks he has raised taxes on "everything that twitches?"

 

[Chapdog]

Actually, when it comes to effect on the people, the rich did exceedingly well while lower income earners got much more modest net income benefits:

So, while the median income household got about a $1,000 tax break, high income earners got a whole hell of a lot more.

yes its true the top earners got the biggest $$ amounts but its all in the economies of scale and Percent that matters. I have no problem with the % brackets as they stand in the current Bush Plan. My biggest problem is with the loopholes and itemized deductions that allow for someone making 10M to pay a lower % of total then someone making 60K.

 

[Cancel 2016.2]

Actually, when it comes to effect on the people, the rich did exceedingly well while lower income earners got much more modest net income benefits:

So, while the median income household got about a $1,000 tax break, high income earners got a whole hell of a lot more.

BECAUSE THEY PAID A WHOLE HELL OF A LOT MORE.

If you only pay $2k in income taxes, you can hardly expect to get $6k back in income tax cuts.

As a percentage of what they WOULD have paid, the lower brackets got the larger cuts.

Dollar for dollar of COURSE the wealthy get more back as the top half in this country pay 97% of all income taxes.

 

[Cancel 2016.2]

yes its true the top earners got the biggest $$ amounts but its all in the economies of scale and Percent that matters. I have no problem with the % brackets as they stand in the current Bush Plan. My biggest problem is with the loopholes and itemized deductions that allow for someone making 10M to pay a lower % of total then someone making 60K.

exactly.... which is why we need to dump the current tax code for a simple, fair and TRULY progressive system like the flat tax with a standard deduction.

 

[Bonestorm]

exactly.... which is why we need to dump the current tax code for a simple, fair and TRULY progressive system like the flat tax with a standard deduction.

A flat tax with a standard deduction would likely be more regressive than the current system, not less. In reality, actual tax rates begin to skew downward when you get to really high income levels (> $1 million) and I suspect that a lot of that has to do with dickering around with capital gains and losses and charitable deductions.

And good luck getting rid of the various deductions that people love. Hell, Chap nearly blew a gasket yesterday at the suggestion by two guys that the mortgage interest deduction should be eliminated.

 

[Bonestorm]

BECAUSE THEY PAID A WHOLE HELL OF A LOT MORE.

If you only pay $2k in income taxes, you can hardly expect to get $6k back in income tax cuts.

As a percentage of what they WOULD have paid, the lower brackets got the larger cuts.

Dollar for dollar of COURSE the wealthy get more back as the top half in this country pay 97% of all income taxes.

I understand all of that and was responding to a particular point that GL made.

And I don't give a shit about the top half paying 97% of all income taxes. What percentage of all income does the top half earn? Hell, the top 1% earn 24% of all income and the top 10% earn 50% of all income. When you earn most of the income you're going to end up paying more of the income taxes.

 

[Chapdog]

A flat tax with a standard deduction would likely be more regressive than the current system, not less. In reality, actual tax rates begin to skew downward when you get to really high income levels (> $1 million) and I suspect that a lot of that has to do with dickering around with capital gains and losses and charitable deductions.

And good luck getting rid of the various deductions that people love. Hell, Chap nearly blew a gasket yesterday at the suggestion by two guys that the mortgage interest deduction should be eliminated.

If they wrote it correctly it would not be regressive. A flat % tax across the board and then deductions based on Income level to make it more progressive. Treat the deductions similar to how the student loan deduction works. The more you make the less of the deduction you get.


And yes the idea of elimination of mortgage interest is bothersome to me because a lot of people plan there largest financial decision of there life around that. Call any mortgage broker and they are selling common folks 30year loans using the tax deduction as the primary selling point. Now me personaly it wouldn't effect because years ago when my very liberal FIL mentioned mortgage interest deduction should be removed was the first time I even knew it was on the Dem wish list so I immediately made it more of a priority to pay down the mortgage faster and ignore any type of tax benefits of a longer loan.

 

[Jarod]

Its what Ive always called phase 2 of a presidental administration....

Run to the middle.

 

[Onceler]

Its what Ive always called phase 2 of a presidental administration....

Run to the middle.

Really?

It's what I call a "President keeping his promise."

 

[Cancel 2016.2]

A flat tax with a standard deduction would likely be more regressive than the current system, not less. In reality, actual tax rates begin to skew downward when you get to really high income levels (> $1 million) and I suspect that a lot of that has to do with dickering around with capital gains and losses and charitable deductions.

And good luck getting rid of the various deductions that people love. Hell, Chap nearly blew a gasket yesterday at the suggestion by two guys that the mortgage interest deduction should be eliminated.

No moron, it wouldn't be regressive. Run the numbers yourself if you don't believe it.

Our CURRENT system IS REGRESSIVE.

Under a flat tax with standard deduction.... (example coming)

Start with a standard deduction of $30k (adjusted for inflation annually) for each adult and then tax every dollar over that $30k at 20%. This is simple, easy to understand, fair and progressive. It protects the low-income individuals and couples from paying federal income taxes. It provides the middle-income families a lower effective tax rate than the wealthy. This plan would encompass ALL income, including earned income, capital gains and dividend income.

A person making $30k pays an effective rate of 0%.

A person making $50k pays an effective rate of 8%.

A person making $100k pays an effective rate of 14%.

A person making $200k pays en effective rate of 17%.

A person making $1mm pays an effective rate of 19.4%

Everyone has the same deduction and takes it. Which causes the effective tax rate to increase the more you make.

Change the standard deduction if you want to play with it. It won't change.

It will ALWAYS be PROGRESSIVE so long as the standard deduction is > 0 (now obviously the inner douche bag in you is going to want to run it with a standard deduction of a dollar... resist that temptation. For even though THAT too would be PROGRESSIVE.... it would result in so many decimal places that ditzie would go into a frenzy telling us how they don't exist)

As for getting rid of the deductions people love.... THAT IS THE FUCKING POINT.... getting rid of all the friggin clutter. Returning the system to a progressive one. It is adding in all of the deductions and loopholes people love that ends up with our tax code being 70k+ pages and Buffett able to get his effective rate lower than his secretary.

 

[Jarod]

Really?

It's what I call a "President keeping his promise."

He promised not to raise taxes on those making more than 250?

 

[Cancel 2016.2]

If they wrote it correctly it would not be regressive. A flat % tax across the board and then deductions based on Income level to make it more progressive. Treat the deductions similar to how the student loan deduction works. The more you make the less of the deduction you get.

KISS

Keep it simple stupid.

No reason to make it fade. Treat everyone equally. Give every adult the exact same deduction. No matter what that deduction amount is, the tax code would be progressive.

And yes the idea of elimination of mortgage interest is bothersome to me because a lot of people plan there largest financial decision of there life around that. Call any mortgage broker and they are selling common folks 30year loans using the tax deduction as the primary selling point. Now me personaly it wouldn't effect because years ago when my very liberal FIL mentioned mortgage interest deduction should be removed was the first time I even knew it was on the Dem wish list so I immediately made it more of a priority to pay down the mortgage faster and ignore any type of tax benefits of a longer loan.

True... but if you make the standard deduction high enough to continue keeping lower income and lower middle income families from paying income taxes, then they will benefit greater than they would under the current system. The higher income earners would indeed loose some of the benefit of their deductions and loopholes. Which is the point.

 

[Onceler]

He promised not to raise taxes on those making more than 250?

He promised not to raise 'em on anyone making under that. Axelrod stated that the only way to achieve that w/ the new political reality was by extending all of them, and he's about the 20th person I have heard say that since the election.

What I love is the tone of this thread - Obama is somehow "surrendering" and looks worse for keeping his promise. And people wonder why it's hard for politicians to successfully work w/ the opposing party....

 

[Cancel 2016.2]

He promised not to raise 'em on anyone making under that. Axelrod stated that the only way to achieve that w/ the new political reality was by extending all of them, and he's about the 20th person I have heard say that since the election.

What I love is the tone of this thread - Obama is somehow "surrendering" and looks worse for keeping his promise. And people wonder why it's hard for politicians to successfully work w/ the opposing party....

the 'tone' of this thread?

Outside of the OP, which I admit webb does do what you suggest... do you think anyone else was demonstrating that 'tone'? Or were you referring to how the thread started?

 

[Bonestorm]

No moron, it wouldn't be regressive. Run the numbers yourself if you don't believe it.

Our CURRENT system IS REGRESSIVE.

Under a flat tax with standard deduction.... (example coming)

Start with a standard deduction of $30k (adjusted for inflation annually) for each adult and then tax every dollar over that $30k at 20%. This is simple, easy to understand, fair and progressive. It protects the low-income individuals and couples from paying federal income taxes. It provides the middle-income families a lower effective tax rate than the wealthy. This plan would encompass ALL income, including earned income, capital gains and dividend income.

A person making $30k pays an effective rate of 0%.

A person making $50k pays an effective rate of 8%.

A person making $100k pays an effective rate of 14%.

A person making $200k pays en effective rate of 17%.

A person making $1mm pays an effective rate of 19.4%

Everyone has the same deduction and takes it. Which causes the effective tax rate to increase the more you make.

Change the standard deduction if you want to play with it. It won't change.

It will ALWAYS be PROGRESSIVE so long as the standard deduction is > 0 (now obviously the inner douche bag in you is going to want to run it with a standard deduction of a dollar... resist that temptation. For even though THAT too would be PROGRESSIVE.... it would result in so many decimal places that ditzie would go into a frenzy telling us how they don't exist)

As for getting rid of the deductions people love.... THAT IS THE FUCKING POINT.... getting rid of all the friggin clutter. Returning the system to a progressive one. It is adding in all of the deductions and loopholes people love that ends up with our tax code being 70k+ pages and Buffett able to get his effective rate lower than his secretary.

It is less progressive than the current system. Under the current system, the progressivity flattens out at $1- 2 million in income and then gets slightly regressive but for the vast vast vast majority of income earners it is a progressive system.

And I understand the point of getting rid of all of the deduction. I'm just telling you that it will never happen.

 

[Onceler]

the 'tone' of this thread?

Outside of the OP, which I admit webb does do what you suggest... do you think anyone else was demonstrating that 'tone'? Or were you referring to how the thread started?

Just webbway & the way the thread was started. It's really pretty BS....