If democrats can't pass a reinstatement of the Bush middle class tax cuts

[dkf]

http://mobile.forbes.com/device/article.php?CALL_URL=http://www.forbes.com/2010/07/22/expiring-bush-cuts-affect-personal-finance-taxes_2.html

Here are the impacts:

Tax Brackets EGTRRA created six tax rate brackets--10%, 15%, 25%, 28%, 33% and 35%, based on income levels. If no extension is passed and signed into law, then the pre-2001 tax rates will go back into effect starting in tax year 2011. The 10% bracket would disappear, and those taxpayers would move up to the 15% bracket, which would apply to all incomes below $34,550. The other tax rates would increase to 28%, 31%, 36% and 39.6% for the highest earners making more than $379,650.
 
Child Tax Credit One major provision that will expire at the end of 2010 is the child tax credit, which EGTRRA doubled from $500 to $1,000 per child. Unless Congress votes to extend the child tax credit, the maximum amount will revert back to $500 for tax year 2011, and the number of families eligible for that amount will be much less as tougher eligibility standards that existed prior to EGTRRA will go back into effect.
 
Capital Gains/Qualified Dividends The maximum tax rate on long-term capital gains and qualified dividends were also reduced to 15%, with lower income filers facing a 0% tax rate. The sunset provisions would move the capital gains rate back to a maximum of 20%, and qualified dividends would resume being taxed at the regular tax rate of the filer, or as high as 39.6%.
 
Marriage Penalty EGTRRA also eliminated the so-called "marriage penalty" and gave a married couple filing jointly a standard deduction twice that of a single filer. Tax rates were also adjusted for joint filers to remove the penalty. These provisions are set to expire as well.
 
Other Expirations Another legacy of the two tax cuts was the elimination of the phase out of the personal exemption, which was gradually eliminated over time. If no extension is passed, then the phase out will resume at incomes above $122,500.

[Enrique]

1. who's going to stop these tax cuts?

what's this "if the dems can't pass Bush's tax cuts" thing.

Seriously, is anyone threatening to block any tax cuts?

[The Magistrate]

2. The Usual Suspects, Sir: Nelson and Lieberman

[dkf]

4. They automatically expire. Right now Dems don't have the votes to just do the middle income parts

Without keeping the higher income tax cuts. It may be a game of chicken...all the Bush tax cuts or nothing.

[Enrique]

7. I need to know where you're coming from

are you saying deal with Lieberman so we don't experience the bad consequences in your OP (from Forbes)?

If so, then I say no way. I say tell Lieberman to go fuck himself. In fact, I see absolutely no reason for Obama not to threaten a veto on anything more generous to the rich than what he arguably promised in his campaign.

[dkf]

10. Deficit Hawks want ALL the tax cuts to expire. I think it would be lethal for the economy right now.

Personally I didn't get much from this tax cut so I will not be affected. I worry about my sister and her family and about the broader economy. You are not going to like my opinion but I don't think it will have a good outcome if we raise taxes on the top earners now because the top 5% is responsible for 37% of consumer outlays. If this group slows down their spending at this moment it would have broader impacts on jobs and unemployment. We need to revisit this after the economy gets it's legs back hopefully next year.

And yes it is not fair that the top earners are even capable of doing 37% of the spending but they are doing so because middle and lower income people are finally saving.

This structural imbalance must be addressed but we also need a plan to keep consumer spending up. We should not be encouraging mom and pop to spend everything they have. It is a dilemma.

[kentuck]

12. That is no dilemma...that is an opportunity..

If Obama threatens a veto, the people would unite behind him. That would de disastrous for the Republicans in November. I hope they do as you suggest.

[Hannah Bell]

20. bullshit on that. tax them & let the government send it to the states to cover budget deficits,

it will still get spent.

[Winterblues]

33. Just like it was lethal when Clinton imposed his tax increase "during a recession"

D'Oh..... not only was it not lethal but America went on to experience "The Greatest Economic Expansion in History" You are repeating almost verbatum what Republicans said in 1993.

[TBF]

36. Oh come on - those making in the top 3% are going to spend

no matter what you think about it. They are going to buy what they want, when they want. If you're worried about "mom and pop" as in retired folks spending some of their money - well if they have millions accumulated they can afford it.

I have no problem with instituting more tax relief for those in the lower brackets, but to let the upper income brackets continue to pay so little is mind-boggling.

There is no dilemma here - just increasing greediness from a very brazen upper class.

[kentuck]

3. Would a politician actually stand up and say....?

If you don't vote for the taxcuts for the billionaires, I will not vote for the middle class cuts or the child tax credits? Would that be suicidal?

[dkf]

5. Who do you think will blink? The republicans?

[kentuck]

11. I sure would hope so.

A huge percentage of American do not want to extend the taxcuts on the wealthy. The Democrats would be fools not to take political advantage with this issue.

"Yes, but the taxcuts on the middle and working class would only increase the deficit and not create jobs. That is why we need to extend the taxcuts on the top 2% also.They create the jobs."

They could make that argument but it would not be true. The Democrats should pass the extension of the taxcuts on those making less than $100K and dare them to block it. Then make it an issue in the election.

[The Magistrate]

6. Two Of 'Ours' Are Doing Just That, My Friend: Nelson and Lieberman

[w4rma]

13. Nelson is up for reelection, right now. We should do nothing to help him. (nt)

[The Magistrate]

15. If We Have To Lose Someone, Sir, He Would Not Be Much Missed....

[Andy823]

8. It should be suicidal

If the vote is to keep tax cuts for everyone making under $250,000, which I believe is what the president wants to do, and anyone votes NO, it should end their political career, especially if they are running in November! From what I have seen even republicans want it this way, tax cuts for everyone but the top earners in this country. It may be a game of chicken, but could all the republicans vote no and still think they weren't going to lose votes for doing so? I would think some republicans would cross over if they get enough pressure from their home districts. If the don't help pass it, then one has to think that if it's a all NO voter from republicans, it will hurt them come election time. They have already pissed off those on unemployment that needed an extension, the Spanish voters, the Muslim voters, single mothers, teachers, policemen and firemen, can they risk pissing off the middle class independents and moderate middle class republicans as well?

[Statistical]

29. Got a cite of a single republican that ...

"From what I have seen even republicans want it this way, tax cuts for everyone but the top earners in this country."

Just curious. I haven't seen a single Republican who has stated this positions.

[Statistical]

27. It is all how you spin it.

Something like:
"Because Mr. Kentucky refuses to accept reasonable extensions of valuable job creating tax cuts for small business I am inclined to vote against this entire travesty of the bill. I will have no part in the majorities desire to see small business layoff hard working Americans at a time of record unemployment."

Will they say it? You betcha. It all depends on how you say it.

[customerserviceguy]

9. Let them expire

And I speak as one who would pay more if the 10% tax rate disappeared. I shove a lot of my pay into my 401K and my HSA, and that means a fairly great proportion of my income is in that 10% tax bracket.

Expiration of these tax breaks affects those who can pay it a lot more than those who can't.

[RB TexLa]

14. re: the child tax credit. How much should they get for their lifestyle choices?

[dkf]

19. Well as a single with no kids I think it's unfair.

But knowing how families are stretched I can't imagine it will be painless.

[Hannah Bell]

21. "lifestyle choice" = lol. quite the libertarian meme there.

[RB TexLa]

23. Have and raising a child or children is a lifestyle choice. What else would you call it.

[TheKentuckian]

16. By all means let them all expire and redirect the "middle class" portion into infrastructure and aid

This is exactly why some wanted them repealed in the 1st place rather than waiting for the sunset

The tax cuts are very, very ineffective stimulus. They just do not have the broad impact on job production that supply siders pretend.

We've got problems that desperately need resources and this is not a solution but rather rehash of voodoo economics.

I'm no deficit hawk but just saving the money probably has a more of a net positive effect on the broad economy than these tax cuts generate but we desperately need investment, people need jobs and we need to get roads and bridges at least to code, our sewers and water lines are collapsing, the energy grid is an inefficient debacle, we trail the modern world on rail, and our high speed internet infrastructure is a joke.

This path is utter folly. If you feel the tax cuts for the bottom 98-95% are crucial then let them all die and make the TeaPubliKlans oppose them. That is a fight worth having, let the Republicans fight tax reduction because that is what they will be forced to do, otherwise we are stuck with a stupid and dishonest frame.

Stop avoiding fights and take the battle to the enemy.

[kentuck]

17. Good thoughts...

Let all the taxcuts expire. Then pass another taxcut bill for every family making less than $100K per year. That would cover over 90% of the people of America. Dare the Republicans to vote against it.

[dkf]

22. Dems don't have the votes to pass just the under $250k much less under $100k

That is exactly where we are now. Looks like some Dems are caving though and are thinking of letting the Bush Tax cuts last another year. I have a feeling we are very close to blinking on this one.

[w4rma]

24. If Dems don't have the votes to reinstate the middle class cuts, then it will make a great election

year issue to pummel the stragglers over the head with. If Nelson and LIEberman don't like it, they can lose their seats with the Republicans.

[dkf]

25. They don't have to vote on the middle class tax cut its being filibustered.

Besides the general public doesn't remember any of the stuff they got from the Bush tax cuts. All they associate the cuts with is "tax cuts for the rich".

If we let them lapse to Clinton era rates, that will actually make the Bush years look better. The Republicans will say they tried to keep the tax cuts but we let them lapse as we control the House and the Senate.

Pah.

[w4rma]

35. BS. You act like we aren't allowed to remind the public of anything. (nt)

[zbdent]

18. I propose this ...

recorded votes on restoring each and every one of those tax bracket levels INDIVIDUALLy ...

no "voice vote". Make it recorded.

This is why Bush gave the miniscule "10 percent" bracket in with the huge cut to the wealthiest ... because he knew it would end up becoming an "all or nothing" situation when they expired (when he was out of office). You can't have the highest tax cut expire without "raising the taxes" on the lowest (which, incidentally, probably were the ones which people like Rush and company said "nobody works for" at that level, like Rush said years ago about the "minimum wage").

[Evasporque]

26. Are they calling the Bush Tax Cuts for the Rich...Middle class now?

...

[Statistical]

28. There are components of the taxcuts that helped the poor & middle class.

The adding a 10% bracket saves middle class families up to $500 per year.
The elimination of marriage penalty saves working families where both spouses work up to another $700.
The expanded child tax credit saves a family up to $1,000 per child.

Now these are giant sums of money but takes $500 to $2,000 from your annual budget and tell me it isn't a real cut.

[Hannah Bell]

30. The top 1% got the majority of the bush tax cuts by a wide margin.

Top 1%: 45.0% (Average cut = $54,480)

Top 5%: 52.8%

Top 10%: 60.3%

Bottom 60%: 12.7% (Average cut = $256)


(Income & capital gains cuts)

http://www.ctj.org/html/gwbin01.htm

[Statistical]

31. Never claimed otherwise.

However that doesn't mean a $500 to $1000 tax hike for working class will be "small".

Anyone thinking the taxcuts only affected the rich will be very suprised Jan 1 when witholding tables change and suddenly couple hundred disapears from takehome pay.

[Hannah Bell]

32. bottom 60% = $256. i, for example, got nothing from bush. no kids.

[Statistical]

34. Hardly.

$256 is the average not everyone.

The $256 average incomes those making virtually nothing in income ($20K, $10K, $3K, $128 in income).

Also you benefited from 10% bracket.

10% income tax on your first $8,375 in taxable income.
vs
15% income tax on your first $8,375 in taxable income.

Assumming you have at least $8,375 in taxable income if the taxcuts expire you taxes will go up

5% (difference between 10% & 15%) * $8,375 = $418.75.

Is anyone going to get rich from an extra $418.75 in the pocket? Not likely however I think you can imagine $418.75 paycut would affect your consumption at least somewhat.

If you have more than $34,000 in taxable income you also benefit from 28% bracket being reduced to 25%.

[Hannah Bell]

38. there was no change in my taxes. believe what you will.

[TBF]

37. That is no reason to lump them all together.

Let them all expire, and then reinstate some at the lower levels. This is not brain science.