Let's talk tax cuts for a moment ....

[Stinky The Clown]

Is it possible to have both a fully funded government and tax cuts for the lower and middle classes?

I'm not much of a tax policy wonk, but it seems to me that by plugging loopholes and raising rates on the top .... 2%? ..... of individuals and on all corporations making more than .... some figure that protects the smallest corporations (which are really just mom and pop operations) ...... and then collecting the corporate taxes we could fund it all and still nullify the Republic Party mantra of 'its your money'.

Is this possible?

[SharonAnn]

1. Clinton did it pretty well, and all the loopholes weren't closed yet.

[Totally Committed]

33. We've got to stop kidding ourselves about Clinton!

Clinton also "reformed" safety nets for the poor, de-regulated the media, and signed on to schemes like NAFTA -- all which seemed to make perfect sense in the short-term, but as we have seen, have proved disasterous in the long-term. And, he did it to placate the other side, hoping that a show of bi-partisanship would get them off his back. That didn't work, as we all saw, either.

The myth of Clinton's "success" looms large because most of us (read: Middle Class) did well while he was President. Note the empahasis. His programs fell apart as soon as the Republicans took over, because they could not be trusted with the welfare of the Middle Class. The stock market also did well for us, as did our housing prices -- so as the Middle Class gained wealth, they grew more and more willing to look the other way as the poor got shafted. I hate to say that, but it's true.

There is still no universal health care; pension programs are folding in record numbers; the minimum wage has been stalled for the tenth year in a row; we are at war with anyone who'll pick up a gun and aim it at us, AND our children are being slaughtered in their schools; the housing bubble has burst, and there now is virtually no way to claim personal bankruptcy; Middle Class jobs are being outsourced and off-shored; China holds a record amount of our debt, and our national deficit is at a record high -- all while the Upper 1% of Americans get tax breaks. All of this has been on the backs of Middle Class (excuse me, Working Class) families, and The Poor (excuse me, the Working Poor). The poorest of the poor are left now to fend for themselves, or drown, or starve, or live on the streets. Make no mistake... the seeds for this were all sown under Clinton, and I'm sick of hearing otherwise. If he had taken care of healthcare instead of rolling over like a puppy when the other side rose up against Hillary's plan, we'd have universal healthcare today. If he stood up to the NRA, crime rates would have stayed low and our children would stand a better chance of coming home from school alive every day. If he watched out for us and for those poorest of the poor instead of offering unstinting bipartisanship in order to cover himself against attacks from the other side, our media might still be unbiased, there might still be some viable safety nets for the poorest of the poor and the elderly, and there would probably a lot more jobs still in this country for the Middle Class. But, even after his placation, they went after him, and succeeded in taking this country and this government away from him (and us, in the process). We can look back on those times with all the longing we want, but the truth is, most of what has happened to us sice Clinton left office has been a direct result of his short-sighted policy of placation of the other side, much to no avail. You can disagree with me all you want. You can call me names and villify me for saying it, but the policies of Bill Clinton and his DLC took the Democratic Party and the American way of life and wounded them so badly the other side came in and took over without so much as a ripple of outrage. Clinton's personal recklessness, and public "bipartisanship" (read: consiliation) sent a signal that we were ready for the kill, and the other side took advantage of that signal, and moved in. The Republicans are doing now what he enabled them to do. Period.

So, I don't blame you.... the Clinton years do look good from this vantage point. Hell, the Nixon years look good from this vantage point... but, make no mistake the seeds of our misery were sown by Clinton and his short-sighted policies. Like it or not, that's how I see it.

TC

[Lydia Leftcoast]

47. Thanks for the reality check, TC!

When I see DUers rhapsodizing about the Clinton years, as if they were America's golden age, I alternate between feeling sorry for the poor, naive young things and being angry that they think the plight of the working class doesn't matter.

[blm]

49. Bush2 reversed EVERY good by Clinton, because Clinton's biggest fockup

was to protect and cover up for Poppy Bush by keeping the books closed on IranContra, BCCI, Iraqgate and CIA drugrunning.

[AJH032]

50. You voted for him. Twice.

n/t

[mark414]

2. it is necessary to switch some taxes around

i think al gore has talked about something like this...

but get rid of payroll taxes - there shouldn't be taxes on hard work and productivity, and instead shift those to an increase in the gas tax or something similar - don't tax productivity, tax consumption

most people wouldn't like an increase in the gas tax but i say tough shit, deal with it. you use more gas and pump more pollution into the air, you pay more tax. maybe it'll encourage people to buy more fuel efficient cars or increase the demand for alternative energy technology

[Stinky The Clown]

3. Actually, consumption taxes are pretty regressive

Especially when they're on necessities. The rich guy who commutes by train won't feel a gas consumption tax nearly as much as the inner city single mom, using a beater of a car to get from home to her first job, then back home to feed the kids and then off to her second job amd then back home to do it all over again.

[1932]

5. Another way to think of it:

A guy driving a 12 cylinder Ferarri who spends .01 percent of his annual income on gas isn't really going to care if the price of gas tripples. But for a single mother spending half of her income on housing, a third on energy costs, including gas for her hyundai, and the rest on food, and then going into debt for everything else, a trippling in the cost of anything is going destroy her life and destroy the opportunities for her children to get ahead.

[Stinky The Clown]

11. Pretty much my point, actually

I suspect we agree.

[1932]

28. The added diminesion:

You were saying that rich people can avoid paying the higher costs by substituting behaviour. My point is that a lot of rich people are perfectly happy absorbing the added costs because their income is so great. They'd rather pay a 30% sales tax on the tiny fraction of their income that constitutes consumer spending than pay 30% on their income over 130K dollars.

[lumberjack_jeff]

15. Our economy is running perilously close to recession

and has for some time because the working classes don't have enough resources to buy stuff as it is. Encouraging production (investment) via capital-favorable tax policy won't help anything - there's plenty of investment capital, but there's not so much consumption demand. Were it not for home equity loans, there'd be none at all.

Thirty years of stimulating the economy by taxing work and not investment has been proven to be counterproductive.

Overconsumption is a problem, the fix to which is recession, which is also a problem.

[Stinky The Clown]

16. I think we agree

Did you intend to reply to my post or the one above it?

[lumberjack_jeff]

20. I agree with your post, but not the one above.

... sorry to use you as the middle-man. :)

[Stinky The Clown]

22. S'okay .....

.... not the first time I've been in the middle. :)

[WCGreen]

27. The payroll taxes only go toward Social Security and Medicare...

[1932]

4. A more fair allocation of the tax burden is not only possible,

it's an imperative for the US if we are not going to slip into a second Depression and then into a second Dark Ages.

Since the tax burden has shifted so much onto the middle class, there is obviously some room to shift it off the middle class. And since so much of the tax burden has shifted off of people who, in particular, get significant income from capital gains, there's some room for them to pick up some of the heavy load.

However, it's also important to notice that a lot of middle class people have a pretty light federal income tax burden (especially if they're married, have children and have a mortgage) until they hit the Alternative Minimum Income Tax, so reallocating the federal income tax burden is more complicated than just changing rates within the existing structgure.

You have to address FICA, AMI, certain deductions, and sources of income other than earned income...

[Stinky The Clown]

12. My political point in posing this question is to have a plank in 08 ......

.... that offers a specific plan to cut the taxes on the lower 98% of Americans, and make up the difference from the top 2% and the large coporations. Not knowing a thing about tax policy (as you seem to), my initial reaction to you saying "However, it's also important to notice that a lot of middle class people have a pretty light federal income tax burden (especially if they're married, have children and have a mortgage) until they hit the Alternative Minimum Income Tax, so reallocating the federal income tax burden is more complicated than just changing rates within the existing structgure." my reaction is to not do anything that might result in higher taxes an middle class people, who would be in the group you cite.

Again, I'm not arguing with you. Instead, I'm looking for a general tax position that Dems can run on in 08. One that has broad appeal to the 'keep more of your money' crowd. I want to take the issue **completely** away from the Republic Party.

[1932]

29. I think the bottom line

is that Democrats have to talk about allocating the tax burden fairly, and then also point out that you pay taxes in more ways than just on your 1040.

Poor people and middle class people do well with Federal Income tax. People who pay Alt. Min. Inc. Tax get totally screwed. Super rich people who have a low ratio of earned income to unearned income make off like bandits. Dividends and long term capital gains get taxed at lower rates than any form of income. Those are the people who have seen the burden shift of themselves in a big big way, and that started back in '98.

But Democrats also need to talk about the way states have been picking up the federal slack in ways that shift the burden on to poorer people, like with sales tax and property tax.

And they need to talk about how corporations are now carrying so little of the income tax burden even though they're doing better than anyone in society.

[Stinky The Clown]

30. I agree with all of that

Again, the essential point of my post was to explore ways to reduce taxes on the lowest 98% of citizens and transfer the burden back to the top 2%, plus the large corporations. If the shift is big enough, it should also lead to reductions in state taxation.

Just as important as the 'can it be done' questions are the framing. Politically, it needs to be very clear and easy to understand - easy to 'sound bite', if you will.

There are two goals: Take the issue AWAY from the Republic Party and make the Democrats the party of the people once again. Except duing the Great Depression, with a minor replay during the LBJ era, we have never been a 'tax and spend' party. But our reputation of so being remains well entrenched. THAT needs to change. And that's what I'm exporing here.

As before, I'm not challenging what you say. I'm just restating why I made this post. Your comments have been useful to me.

[Joe Bacon]

6. Tax the churches and give relief to the middle class!

Time to take the real welfare queens like Pope Eggs Benedict, Falwell and Robertson off of the "faith-based" gravy train and make them Render under Caesar like everyone else. They gotta pay if they want to play!

[1932]

7. Robertson does pay taxes.

His tax-free status was challenged years ago and he didn't fight it because he wanted to continue to use the 700 club to support Republicans.

[Lasher]

8. I am so glad you asked that question, Husb2Sparkly

Here, try the National Budget Simulation Game and answer the question yourself. It's fun!

I eliminated the 2001 & 2003 tax cuts for rich people, and pulled everybody out of Iraq & Afghanistan. My result was a $5.42 Billion surplus, just like that. So that solved the problem of funding our social programs and eliminated our deficits. You might be able to find a way to fund a middle- and lower-class tax cut but I've never tried that.

But wait, there's more! What about that Social Security shortfall that's expected to occur in 2048 or so? Here's The Social Security Game where you can solve that problem too!

By eliminating the cap on taxable earnings I was able to resolve 93% of the projected shortfall with no tax increase on people making less than the current cap of $90K or so, and with no reduction of benefits. Now thanks to me, SS is solvent forever!

[Stinky The Clown]

13. There is no doubt at all that simply ending the war-specific spending ....

.... would go miles toward allowing for a balanced budget, and maybe even some honest middle and lower class tax cuts.

In fact, I'd like to see part of that surplus used to completely eliminate taxes on people making under some significant figure ..... $50,000?

[Lasher]

18. I couldn't agree more, Clown Dude

The budget simulator makes it clear that we have no fiscal problems except those that have been deliberately caused by Junior. End the tax cuts for the rich and his adventure in Iraq and we're back in the black. It is with this realization that I become even more disgusted with every one of their attempts to gut all of our New Deal programs.

Tax cuts like the $50K and below exemption actually would have improved our economy; in sharp contrast with the supply-side scam that has not done much of anything except further enrich the already rich, bankrupt our treasury, and help move jobs overseas. It is the American consumer that drives our economy.

I noticed that you don't claim to be an expert on these issues. Well I'm not either but I've done a lot of thinking about them.

Hang in there, good to type to you again.

Lasher

[Greyhound]

17. Thanks for these links, dude.

That is a blast, and points out just how perverse our current budget allocation is.

Edit: I "played" (options are too limited) the SS game, and the one change that yields a 93% solution is to eliminate the cut-off. The remaining 7% required for solvency by their calculations can be fixed with a couple of tweaks (that aren't offered).

[Lasher]

25. Highly pleased they were helpful to you.

Many's been the DU-er who has helped me.

The thing I like most about the budget simulator is that it bypasses all the repuke-imposed smoke and mirrors that are there to intentionally confuse us. It's really simple, but the wealthy elite doesn't want us to know that.

The SS game is even more simple. All you have to do is eliminate the cap, which should never have been there to start with. As it's been the richest of us has been living tax-free in that respect. Highly regressive setup. And that other 7%? We shouldn't do anything at all about that. The shortfall is so far away and the calculations used to predict it are so conservative, a 'wait and see' posture is best.

[Greyhound]

37. Back in the day, when it was still possible to make a good living

in IT, it pissed me off every two weeks when I thought how I was paying exactly the same amount into FICA that Gates was, not the same percentage, the same amount. :grr:

[Lasher]

39. Sorry you were caught up in the IT offshoring.

The ceiling on FICA taxable income is supposedly justified by a limit on the maximum monthly income an individual can receive in retirement. I don't agree with that. I believe in a progressive tax structure in this and other cases. But consider this: Part of your FICA taxes support disabled folks and other disadvantaged folks. Where's the justification in giving Walton family a pass on almost all their income taxes in this respect while the rest of us pay that bill?

And here's the part of that particular issue that burns me the most. We've paid extra into the SS trust fund for decades so that boomers will be OK. The resulting Trust Fund surplus has been loaned in the form of Treasury bonds to the General Fund. One of Republicans' fondest dreams is to come up with a way to circumvent redemption of these bonds by the General Fund, thereby effectively stealing the Trust Fund.

What if they are successful? One result would be an enormous retroactive income tax holiday for Paris Hilton & company. This is because all that money came from payroll taxes with the cap, but was used to support the General Fund - which would otherwise have been funded from regular income taxes that have no cap.

I assure you, this point has not been missed by the richest 10% of Americans who own the Republicans.

[Greyhound]

45. The repukes, with Democratic acquiescence, have blotted out the

idea that the rich should pay more to support the system that allows them to be rich. Wonder how that could have happened? It went the same way as the notions of noblesse oblige and taxes are the price we pay for civilization.

[mtnsnake]

9. Gotta change the perception that the Dem Party's the party of higher taxes

Republicans have successfully given the general public the perception that Democrats are evil and out to get their hard earned money.

Democrats have not been successful YET in changing that perception and they need to work on it and come up with a strategy that proves to Joe Sixpack that he'll have more money in his wallet if Democrats are put into office. Just coming out and saying how Democrats are only going to raise the taxes of the top 5% of voters isn't enough to convince the other 95% of voters that they're going to benefit. We have to become better at EXPLAINING in simple terms that the public can understand.

We need to convince the public that the more money that the wealthiest of Americans contribute to taxes, the LESS money that the rest of us will have to pay in taxes. It shouldn't be that hard to do.

I'm glad you brought the subject of taxes up because it's killing us all the time and we need to remedy it.

[Lasher]

10. Actually Republicans do cut taxes.

They cut taxes mostly for the rich but they have a better record of cutting taxes than Democrats. But the big problem with that is, you would think that they would also cut spending when revenues are resultingly diminished. Not so, federal spending goes up faster during Republican control. They are truly the party of borrow-and-spend that runs up debt for others to pay.

Oh, I almost forgot those supply-siders. Revenues were supposed to increase because the tax cuts for rich people were going to trigger prosperity. Hello, any supply-siders still out there? (cricket, cricket). The trickle-down theory was never anything more than an attempt to find moral justification in stealing from the poor and giving to the rich.

Maybe Joe Sixpack would like to hear about the idea of getting free healthcare for himself and his family. Wonder how much that would save the average family?

[FormerDittoHead]

21. They POSTPONE taxes, and RAISE them for the middle class...

Honestly, if they really did what they SAID, CUT government along with taxes, then at least they'd get points for consistency.

The problem is that government spending is through the ROOF, and no one talks about the 1,000 gorilla (the debt)...

Lower the proportion that the rich contribute toward paying OFF that debt, you effectively RAISE taxes on the lower classes esp small business owners and professionals.

...and that's EXACTLY what they're doing, RAISING TAXES, via the Alternative Minimum Tax.

http://www.msnbc.msn.com/id/4660655/

the problem is that the AMT is complicated and while people will PAY it, because it's not as easy as 'tax and spend' it flies under the radar...

[Stinky The Clown]

14. This is as much framing as anything else

If we can find a way to make **significant* tax cuts for the lower and middle classes, that's how we need to frame it. We always start by saying we'll raise taxes on the top 2% of earners. We need to NOT say that. We need to concentrate on the good stuff and put **anything** that uses 'raise' and 'taxes' in the footnotes and fine print, so to speak.

Wouldn't it be wonderful for our candidate in 08 to be able to say: "I will eliminate completely the taxes on all families making less that $50,000 per year and will reduce significanly the taxes on every other working family in America."

[mtnsnake]

26. Yeah, it is for sure. It's also about explaining things better

If we're going to be the party that takes fiscal responsibility in the form of taxes, then we need to explain to the naive and ignorant just what taxes do for them. We need to ask them if they'd rather have lower taxes and fewer parks and recreational areas or if they'd rather see the wealthy pay their fair share, resulting in better parks, roads, safer cities, better schools, more places to hike, hunt, & fish, and so on. I honestly don't think half the voters even realize what taxes are for. We need to frame it differently and we need to explain things in simpler terms so anyone can understand, even some of the morons who voted Republican last time.

[Cosmocat]

23. It is a loser ...

To say we only are going to increase taxes (or roll back tax cuts) to the upper 5% because the drones take whatever prettified form of trickle down the Hannity's of the world tell them makes our country work, hook, line and sinker ... Because the Fox News propogandaists will scream and yell that our economy will implode if the rich people are not given more tax cuts, the sheeple will believe it, even if THEY are paying more than they could/should ...

[1932]

35. Listening to Angelides vs Arnold debate,

I was hoping that when Arnold accused Angelides of just wanting to raise taxes, Angelides would reply:

Arnold, I know people who have done very well, financially, the last couple years, and I know a lot of people who are doing a lot worse. My friends who have been doing well say that their tax burden has been dropping. They are willing to bear more of the load now so that their children and so that the future of our state is ruined because too many working people were held back by poor schools, heavy debt, and taxes that were burdensome. They're want to see a more fair allocation of the tax burden, which is what I want.

You brought to California the Chairman of Berkshire-Hathaway who told you the same thing. We haven't seen you together since then.

Arnold, you've also done very well the last five or six years, right? Are you telling me that you don't think that you could bear a little more of the load so that working Californians can get good schools and hospitals, so that fireman and police officers can get paid decent wages and so that your children can grow up in a state that works?

[lumberjack_jeff]

19. Social security taxes

If, through "reform", the basic premise of surplus social security taxes is removed, (we're paying a little more than is necessary to assure that those who retire in a decade or two are adequately funded) then low-to-middle income wage-earners are already subsidizing corporations and capitalists to the tune of hundreds of billions each year.

If social security is reformed in such a way as to cause the government to essentially default on the $1.7 trillion in treasury bonds that compose the trust fund, then I'm not satisfied just stopping the subsidy, I want those who make wages over the current cap, as well as those who make their money via unearned income (and corporations) to subsidize low-to-middle income workers for the next 30 years to provide remuneration.

[Nimrod2005]

24. Yes, and it is easy...Just shifting some monies around, and we will have

enough to have better roads, utilities infrastructure, and education.

We have the largest economy in the world...We can squeeze whatever we want out of the $11+ trillion/year economy.

[Vinca]

31. The whole Republican "tax cut" thing drives me nuts.

If we're really "at war," it's obscene to cut taxes. If we have giant deficits and massive debt, it's obscene to cut taxes. If we have a sixth of the population without health care and embarrassing infant mortality stats, it's obscene to cut taxes. Government runs on money, pure and simple. At the moment it's running on Chinese money and our grandchildren will be paying it back. Give the middle and lower classes a few breaks to help them back on their feet and take a bite out of the foolishly high CEO salaries and platinum parachutes.

[TheFarseer]

32. I want to

raise the top 2 or 3 brackets, leave the bottom whatever alone. Close all the loopholes that promote outsourcing and call that good. Cutting taxes when you are running a deficit is dumb dumb dumb - unless you have a very specific purpose in mind such as a tax credit for hybrids.

[Stinky The Clown]

34. I understand the sentiment .....

...... but what you propose is not very much unlike what I suggest in the OP. Please take a few minutes to read this entire thread, not just the OP.

The real nut is 'total revenue'. The fly in the ointment is who carries the burden. The notion is to accomplish two things: 1) Increase (or at least maintain) revenue while shifting the burden to the very top and to the uberprofitable large corporations; and 2) Describe it as a lower and middle class class tax CUT.

Not discussed here but also useful to do would be cost reductions - like .... uh .... maybe the military stuff. But that's for another thread, not this one. What I want this thread to explore is the narrow issue of chaning the perception of the Democrats as 'tax and spenders' and taking that argument AWAY from the Republic Party.

[TheFarseer]

43. Here's an idea you might like

I see your point now that you have to be able to sell it. So do exactly what I said in my above post, except cut the bottom bracket from 10% TO 5%. Then you have a middle class tax cut and I dare say, more revenue overall, although you'd have to crunch the numbers to make sure. If it's too much of a cut, try 8% or whatever it takes.

[Greyhound]

36. I've stumbled across a solution that appears to be, not only possible,

but also works to eliminate the perception that Democrats want to raise the income taxes.

First as mentioned above, simply removing the cap from FICA "contributions" makes the SS system solvent well beyond the foreseeable future.

Secondly, and I'm still checking but so far it works, Pat Buchanan (I know he is not on our side, but that doesn't mean he can't have/find a good idea, http://buchanan.org/blog/?p=109">here's the full article) of all people has proposed a plan that not only replaces the need for an income tax, it does so without weighing more on those that work for a living and eliminates, in practical terms the "free trade" agreements that have been shoved down our throats, and are destroying our economy. He calls it an equalization fee, but it boils down to a tariff that equals, or counter-balances, the government subsidies that the large export nations give to their companies, making it impossible for our companies to compete. What surprises me is that it not only eliminates our trade deficit, but could also replace the income currently extracted from the workers in the form of income taxes.

So, if we were to do this, we could run on a platform of real tax cuts, as opposed to the fake tax deferments that the re:puke:s always come up with (another big issue we don't raise for some reason), for everybody including the rich, and a re-birth of our manufacturing base as it provides a powerful incentive to make stuff here to avoid the fees. None of the Asian Tigers can hope to survive without our market to dump their products into, but that won't last forever and if we don't fix it now, we won't have an opportunity to fix it later.

The downside is that Walmart and others that created the mess with China and India, among others, will be fucked. They will simply have to change their business model, buying products made with government subsidized slave labor and selling them to us at a huge markup, or die. Likewise, others like shoe manufacturers, high-tech equipment manufacturers and service companies, Big Three auto companies, the textile and timber industries, will have to bring production back to our shores or pay the real costs of producing over-seas and shipping here.

It gives us the moral high ground, is truly progressive, and puts a lot more money back in the pockets of average citizens. Oh, and provides the means to mitigate the economic tsunami that is bearing down on us in the coming 6 - 10 years. Imagine how much easier it will be to take the Whitehouse in two years if we can point to the resulting economic turn-around it would create in spite of the idiot frat boy, and I believe there are still enough true conservatives left in the re:puke: party to make it a bi-partisan effort.

[Stinky The Clown]

44. I have NO use for that man.

But that's a great idea, to be sure.

[flpoljunkie]

38. Pelosi said recently she is looking at incomes in $250 to $300K range--

that is, in the top 1-2% range of AGI, and essentially would restore Clinton's top marginal rate. Sounds good to me!

[kineneb]

40. had a great comeback for someone complaining about taxes

I suggested that there were several third-world countries to which they could move where they would not have to pay any taxes. Of course, they might have to do without paved roads, water and sewer systems, public health, adequate food supply, electricity, natural gas/propane, telephones, police and firefighters, public schools, and other such things. Taxes are the price we pay for a civilized society.

It stopped their whining.

[ItNerd4life]

41. Probably only for a little bit

I liked how you gave them examples of why we pay taxes. However, when they are with their friends they will go back to complaining, it's human nature.

[ACK]

42. End Corporate welfare, subsidies to the rich and government pork and ....

You can use half the money for a tax cut and the rest for lowering the deficit.

Huh? That is a tall order but the amount of money we are talking about come in at just about 85 billion freakin dollars.

[Greyhound]

46. I would think it would be much higher, how did you arrive at your figures?

:kick:

[ACK]

48. Possibly cause its an old source

It was an update from the CATO numbers originally pointing at $75 Billion but updated for 85.

Yeah just doublechecked thnx those 1995 numbers.