12 Nov

It’s Time To Let The Bush-Era Tax Rates Expire

John Hinderaker @ Powerline:

The Bush-era income tax rates will expire at the end of the year. That is only one of a number of financially significant–some say cataclysmic–deadlines that occur around year end: the payroll tax holiday ends, the alternative minimum tax patch will expire, $36 billion in Obamacare taxes will take effect, tax extenders will expire, the (minimal) 2009 “stimulus” tax cuts will run out, the inheritance tax will increase, and 100% expensing for business investment will expire.

At the same time, $109 billion in sequestration begins, affecting both non-defense and, disproportionately, defense spending. But other spending reductions will go into effect as well: extended unemployment insurance benefits will expire, and, unless action is taken, Medicare reimbursement rates for physicians will decline.

And on top of all of that, the U.S. will hit its debt ceiling of $16.4 trillion in the coming weeks.

All of the above issues, and more, will be in play in negotiations between the Obama administration and Congressional Republicans over the so-called “fiscal cliff.” Because Republicans control the House and have an effective veto in the Senate, they should be able to bargain on equal terms with the administration. There is, however, a serious problem: Republicans do not speak with a single voice. There are differences between the House and the Senate, and various groups of Republicans have differing priorities. As for President Obama, he has laid down a single marker: taxes on upper-income Americans must increase. That is, in his eyes, the one absolute.

So I think the Republicans should call Obama’s bluff, and accept his offer by agreeing to let all of the Bush-era tax rates expire. Taxes on the “rich” will go back to what they were during the Clinton administration. But so, under this proposal, will taxes on everyone else. What would this mean? The 35% bracket would go to 39.6%; the 33 percent bracket would go to 36 percent; the 28 percent bracket would increase to 31%; the 25% bracket would go up to 28 percent; and the 10% bracket would be eliminated, with 15% being the lowest rate.

But wait! you say. Obama doesn’t want everyone’s taxes to go up, only rich people’s. But really, how vigorously can the Democrats object? For nearly twenty years they have been telling voters that the Bush tax cuts only benefited the wealthy–”tax cuts for the rich!”–and that Republicans don’t want to rescind the Bush tax cuts because they are holding out for billionaires. Fine; if the Bush tax cuts only benefited the wealthy, then Democrats can have no objection to doing away with all of them, and returning marginal income tax rates to what they were during the administration of the most revered Democrat of them all, Bill Clinton. It is a little late in the day for Democrats to admit that the large majority of the Bush tax cuts went to people who are not, by any definition, wealthy.

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About Curt

Curt served in the Marine Corps for four years and has been a law enforcement officer in Los Angeles for the last 20 years.

6 Responses to It’s Time To Let The Bush-Era Tax Rates Expire

  1. Doug says: 1

    I’ve been thinking the same thing – I’m oddly ambivalent about the so-called fiscal cliff, since going over it is one of the few credible ways in which we might make a dent in Obama’s massive deficits.

    But politically, IMO, it won’t work. It’ll give the Democrats extra cash to spend, while allowing them to scapegoat the GOP for sending the country into another recession. The deficit would likely start to expand again as they spend even more of the new revenue on “investments”.

    The alternative’s been proposed on some other sites – cave in and rubber-stamp whatever Obama wants on taxes. Rip into those high-earners and see how well it works. Even with the CBO’s static scoring, it won’t bring in more than $70-80 billion, leaving over a $trillion hole still to be plugged. And, of course, the targets won’t sit still – assets will move into shelters, businesses will quietly close, people will quietly retire, etc. But even if none of that happens, the huge budget hole will still be there for all to see, with no GOP “obstructionists” to blame. Then what?

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  2. Marine72 says: 2

    @Doug: Conservatives should just continue to submit their/our budgets to the senate for rat-holing by dingy harry and all conservative senators must vote present as repeatedly enumerated by odumbo during his senate sleep time. The fiscal cliff is owned by P-POTUS. Let him climb in the raft and learn how to row. When the dumbocrats jump off the cliff, we will survive, at least the Americans willing to work and not defecate in the hallways. Since the House is under basically sane management, just hold the purse strings and make the obamination issue executive orders allowing him to continue to borrow money and print money. Zambia here we come.

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  3. Petercat says: 3

    The problem is that the media, and by extension, most voters, will forget that the Democrats ever said that the Bush tax cuts only helped the rich. They will manage to paint Republicans as evil, greedy, middle class haters for letting the tax cuts expire for everybody.
    No matter what happens, when the fecal matter hits the rotary impeller, as it will surely do no matter what is done, it will be painted as the conservatives’ fault.

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  4. Marine72 says: 4

    @Petercat: Actually, I don’t see that we gain any credibility versus the dumbocrat media complex. The only value is in allowing our “Low Information” fellow citizens to have the opportunity to learn first hand that uninformed votes have consequences.

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  5. Nan G says: 5

    The ”Occupiers” painted a target on the 1%.
    Those are the super-rich, not those who would pay this higher tax.
    Remember it is a tax on wages, income.
    It is NOT a tax on already-taxed money saved and slowly spent down.
    So Obama USED the ”dog whistle” of the 1% to say ”the rich” should pay more when his tax plan only targets the people who work hard, try to expand their wealth and hire others.
    Gee.
    What possible consequence could happen if we rob INCENTIVE away from those folks?
    Less money spent in the struggling economy.
    Fewer workers hired or kept on.
    Fewer new businesses opening or expanding.
    AND even though Obama might claim he has closed the loopholes, there are always some loopholes.
    The rich have accountants and tax lawyers just to help them arrange their financial affairs around the best possible outcome for themselves.

    What could possibly go wrong?
    /

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  6. FAITH7 says: 6

    Hello?!?? It’s the Middle Class that holds the countries WEALTH I hope the republicans go ahead and let ALL of the Democrats increases go into effect…They should stop ‘obstructing’ and let the Voters get what they voted for…

    …After all, elections do have consequences…and who pray tell are they going to go after??? The Middle Class as usual…

    All I know is I had a lot more disposable income [to feed back into the economy - stimulating the economy] under BUSH and HIS economy. I digress, not all of it was perfect…the Dems has their hands into the mix as well…

    We, like so many other Americans have had to drastically cut back on our Spending….not a good way to stimulate the American Economy….

    My own “Budget” under Obama?? – Lets use something that is an essential…um… GAS for instance…

    OBAMA 12 – $3.67/GAL x 17.5 gallon tank = $64.22 = $256.88 Month [To Work and run errands] Average price
    VS
    BUSH 07′ – $1.87/GAL x 17.5 gallon tank = $32.72 = $ 130.90 Month [To Work/Home and run errands] Average price

    Wow!!! A $125.98 Difference – JUST ON GAS!!!

    I saw on DRUDGE… Floridians are paying $6.77/Gal !!!!!!!!!!!!!!!!!!!!!!! I-N-S-A-N-E!!!

    THE HYPOCRISY IS THICK IN THE AIR – 4 going on FIVE years LATER…
    The American Average Voter has their heads up their arses… Elections have consequenses…

    Here’s then Speaker of the House Nancy Pelosi holding a big press meeting to lay the blame for high gas prices squarely on the shoulders of President Bush.
    However, today Nancy Pelosi claims that it’s irrational & unfair to place any blame whatsoever for today’s high gas prices on President Obama.
    And no, she hasn’t recanted any of her statements about President Bush.
    If President Bush was at fault for high gas prices back then, don’t you think it’s only fair to assign at least some blame to President Obama today?
    Ask yourself, was Nancy Pelosi lying back then? Or is she lying today? It’s one or the other.
    Learn more at HelloVoter.com!
    https://www.youtube.com/watch?v=WjigcS8gN04&playnext=1&list=PL9D0B48C06F91E2C0&feature=results_video
    ___________________________________________________
    Published on Mar 7, 2012 by HelloVoter
    Current DNC Chair Debbie Wasserman Schultz attacking President Bush for high gas prices way back when.
    Today, Ms Wasserman Schultz claims we can’t place any blame for today’s high gas prices on President Obama, because it’s just plain silly to blame any President for such a thing!
    But has she retracted these statements? Goodness no!
    If President Bush was at fault for high gas prices back then, don’t you think it’s only fair to assign at least some blame to President Obama today?
    Learn more at HelloVoter.com!
    https://www.youtube.com/watch?v=SWeLGOHx2qQ&feature=autoplay&list=PL9D0B48C06F91E2C0&playnext=2

    BLA BLA BLA BLA BLA BLA LIARS LIARS

    Sick of them ALL!!

    ReplyReply

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