Sun Nov 25, 2012, 01:39 PM
hfojvt (35,686 posts)
the 78% Bush tax cuts [View all]
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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the 78% Bush tax cuts [View all]