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Sun Nov 25, 2012, 01:39 PM

the 78% Bush tax cuts

On December 31, 2012 the Bush tax cuts will finally expire. Unless Obama, Boehner, Pelosi, McConnell, and Reid can find common ground.

I hope they don't find common ground.

That common ground is almost certain to be yet another big tax windfall for the rich. Obama's proposal is essentially 78% of the Bush tax cuts. The trouble is, the bottom 80% only get 34.5% of the Bush tax cuts.

Obama's proposal is being sold as a tax increase on the rich. In some way, it is, but in another major way it really is - yet another big tax CUT for the rich. One that should be unacceptable to Democrats.

Under the 78% Bush tax cut plan, the top 1% gets over $40 billion a year in tax cuts. The top 4% get another $40 billion, for a total of $80 billion for the richest 5%. The richest 20% get $163 billion in tax cuts. The poorest 20% get only $14 billion in tax cuts.

Presumably if a Republican President offered such a plan, Democrats would object.

Democrats should be objecting now. Pelosi should be objecting. Reid should be objecting. Newly elected Senators Warren and Baldwin should be objecting. Newly re-elected Congressman Grayson should be objecting. Lame duck Congressman Kucinich should be objecting.

Such objections would strengthen Obama's bargaining position, If the debate is between Obama at 78% and Republicans at 100%, then 89% looks like the middle ground. Well if 0% gets thrown into the mix, then the middle ground shifts. The media cannot say "Obama needs to reach out to Republicans" because the 78% is ALREADY meeting them more than halfway.

And we can get zero percent, as easy as pi. Simply by doing NOTHING. Take that, Mr. Sartre. Score one for nothingness.

Of course, it will be objected that letting the Bush tax cuts expire will "increase taxes on the middle class" or even "will increase taxes on the poor".

One problem is that Obama has spent four years now defining a couple making $249,000 as "middle class". This in a country where 50% of households make less than $60,000 a year.

But as for taxes going up on the poor - we can fix that. And we can fix that in much better ways than the 78% Bush tax cuts. Here are some suggestions

1. Increase the standard deduction by $5,000 per couple. This will save people at the bottom about $750 a year without being a windfall for the rich.

2. bring back the making work pay credit (without the extra damn form). That was a refundable $400 per person, $800 per couple, phased out for higher incomes.

3. increase the personal exemption by $500. Unfortunately the rich will benefit from that, but not by much more than the poor. It means $75 for the poor and only $197 for the rich. It would be a $2,000 automatic deduction for a family of four.

4. Re-introduce lower brackets. Say, a 5% bracket on the first $3,000 and a 10% bracket on the first $7,000 for individuals. The first would be a $300 tax cut for most taxpayers and the second would be another $200 for most taxpayers.

Of course, such proposals will NEVER pass the current Republican House.

But that is just one MORE reason to propose them. When Republicans vote against them, we can use those votes to drive them out of office in 2014. It uses their own propaganda against them. They have spent years praising tax cuts, tax cuts, tax cuts, and now they will have to run as - the person who voted against the tax cuts.

Bottom line - let ALL of the Bush tax cuts expire AND propose more progressive alternatives. We should be fighting for something much more progressive than 78% of the Bush tax cuts.

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Reply the 78% Bush tax cuts (Original post)
hfojvt Nov 2012 OP
hfojvt Nov 2012 #1
hfojvt Nov 2012 #2
hfojvt Nov 2012 #3
leftstreet Nov 2012 #4
hfojvt Nov 2012 #5
hfojvt Nov 2012 #6
hfojvt Nov 2012 #7
kentuck Nov 2012 #8

Response to hfojvt (Original post)

Sun Nov 25, 2012, 04:44 PM

1. data from Citizens for Tax Justice

an old report and the Obama proposal may have changed some

http://www.ctj.org/pdf/taxcompromise2010.pdf

and here's where I got the 78% figure

http://www.ctj.org/taxjusticedigest/archive/2012/11/obamas_proposed_extension_of_t.php

"Under the Presidentís approach, 78 percent of the cost of the Bush tax cuts would be extended through 2013, which is far too much."

And, they don't add, far too heavily tilted to the rich.

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Response to hfojvt (Original post)

Sun Nov 25, 2012, 11:27 PM

2. okay, I got nothing.

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Response to hfojvt (Original post)

Mon Nov 26, 2012, 11:53 AM

3. let's try Monday morning

I really thought DU would be more outraged about this.

Maybe the problem is that it is coming from me, instead of from Krugman, Reich, or even Kuttner.

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Response to hfojvt (Original post)

Mon Nov 26, 2012, 11:56 AM

4. DURec

Thanks for taking the time to put all of this together

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Response to leftstreet (Reply #4)

Mon Nov 26, 2012, 01:44 PM

5. I have sort of been on fire about this for a while

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Response to hfojvt (Original post)

Mon Nov 26, 2012, 05:08 PM

6. average cuts in the Obama plan

group - individual cut - group total

lowest 20% - $507 - $14 billion
next 20% - $993 - $27.,7 billion
middle 20% - $1,348 - $37.6 billion
next 20% - $2,074 - $58.1 billion
next 15% - $3,996 - $83.4 billion
top 4% - $7,151 - $39.7 billlion
top 1% - $28,728 - $40 billion

value of the four proposals

1. Increase in the standard deduction - for a couple $5,000 times highest marginal tax rate, for lower income taxpayers who do not itemize. $750 for modest income couples. Worth $1,250 for those with AGI between %65,100 and $131,450

2. making work pay credit - $400 for an individual, $800 for a couple. Average for those in the middle 20% - $406, average for those in the top 4% - $143, for those in the top 1% - $0.

3. increase the personal exemption - $500 per person times the highest marginal tax rate. For a family of four paying 25% worth $500

4. lower tax brackets - worth $500 - $1,000 for a modest income couple

Conclusion, even the first two proposals would give as much to the bottom 60% as the 78% Bush tax cuts do, AND they would NOT give $160 billion in benefits to the RICHEST 20%.

These are the kind of proposals I expect and demand Democrats to fight for. Not tax breaks for the rich like the 78% Bush tax cuts.

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Response to hfojvt (Original post)

Mon Nov 26, 2012, 11:28 PM

7. hey, I made double digits!!!1!!



I'd like to thank the academy, and my agent, and all my fans


by which I mean my mom, dad, and little brother and sisters.

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Response to hfojvt (Original post)

Mon Nov 26, 2012, 11:31 PM

8. I do not know when the top 3% became the American "middle class".

You are absolutely right.

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