Boehner Has Wimped Out Again; Tax Increases On the Way

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It’s the last straw. I’m guessing this Wall Street Journal report is accurate; and, if so, the American people and the pathetic John Boehner should begin weeping.

House Speaker John Boehner (R., Ohio) said the White House and congressional leaders have stopped pursuing the major deficit-reduction deal tackling entitlement programs and an overhaul of the tax code that he and President Barack Obama had been seeking.

A statement from Mr. Boehner issued late Saturday, after a conversation with Mr. Obama, said efforts by both parties to reach a deal to reduce the federal deficit by $4 trillion over the next decade reached an impasse this weekend over the issue of taxes. Mr. Boehner said negotiators will instead work toward an agreement closer to $2 trillion.

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Mr. Boehner said. “I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase.”

…Messrs. Obama and Boehner had agreed to shoot for a $4 trillion deal that would include up to $1 trillion in tax increases, which Republicans have resisted, and significant savings in Medicare, Medicaid and Social Security, which drew criticism from Democrats. Their hope was to go beyond the minimum deal necessary to win votes in Congress necessary to raise the federal debt ceiling and to make a landmark strike at deficit spending.

…”The White House would not agree with the core elements of tax reform proposed by the speaker,” the Republican familiar with the discussions said. “A gulf also remains between the Speaker and the White House on the issue of medium and long-term structural reforms.”

Hey, schmuck: you don’t need to do anything. The government isn’t going to default; it isn’t going to renege on Social Security; and it could run for a year on current revenues.

James Pethokoukis called it earlier tonight: Obama is “snookering Boehner on taxes”.

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Boehner is the WORST speaker at this time in history. We need someone like Newt Gingrich who has some balls. Boehner is selling the American people down the river because he is afraid of what? Like Rush said on Friday, 78% of Americans have his back. He has absolutely NO REASON to give in to Obama and the Demonrats. ABSOLUTELY NONE. If he doesn’t hold strong, he should be replaced. I’ll tell ya, the absolute high that I felt after Novemeber has dissipated to Zip because of the spineless RINOs. Like Palin said yesterday, 2012 will correct this monstrosity. We need representatives that actually represent THE PEOPLE – not themselves and lobbyists.

Boehner originally wanted $2T in cuts and zero tax increases.

The WH proposal was $4T in future cuts (that we all know won’t happen) and $2T in tax increases immediately.

The two sides could not come to an agreement on the larger package, because of the tax increase issue, so Boehner fell back to his original $2T position.

According to everything I’ve read, there are no tax increases included and Boehner is holding out for immediate cuts that will exceed whatever the final debt increase number is.

AYE, hi, this is enough to him get out of it , he can’t take the heat, so get out of the pot, THEY ARE NOW SO NEAR THE END RESULTS and all that work from the other elected, would be turned to zero or close,
GINGRIGH WOULD HAVE HOLD IT, I BELEIVE,

@ilovebeeswarzone:

Remember that Boehner has not given in on his original proposal. He has been pushing for $2T in cuts and zero tax cuts since early on.

It’s the Dims who lost out here. They wanted tax increases and the Republicans, at this point anyway, have held them off of that.

This is a win for Boehner and the GOP.

http://online.wsj.com/article/SB10001424052702303365804576432164007052674.html

More troubling than these details is the staggered timing. Republicans would be putting their fingerprints on a tax increase in return for spending cuts as a first order of business, which would raise the dividend and top income tax rates to 39.6% (from 35%), or 41% if you include the phase-out of deductions. (Plus the 3.8% payroll tax hike baked into ObamaCare.) Only then would Mr. Obama and the Democrats negotiate the details of tax reform and lower overall rates.

But why at that point would Democrats want tax reform? They’d have achieved their main political goals of a huge debt-reduction deal, getting GOP cover for a tax increase, and putting Republicans cross-wise with the tea party. Raising tax rates first also makes the math of tax reform that much harder to negotiate on both revenue and income-distribution grounds. Under the Beltway’s scoring rules, cutting rates would look like an even bigger gain for higher-income folks and an even bigger revenue loss for the Treasury.

AYE the DEMOCRATS are trying all to make the REPUBLICANS guilty of what is going on,
and it shows in their appearance in CNN news, one was SHADOWSKI AND THE OTHER IS THE SPEECH FROM OBAMA, shifting the blame to REPUPBLICAN,
that is sensitive for REPUBLICANS AND GOPS AND OTHER IN SAME SIDE,
again the MEDIA is playing the game to cover the DEMS
so they have to reshif the blame back to the DEMOCRATS WHERE IT BELONG,
THAT IS THEIR ASTRONAUMICAL SPENDING BEING THE CAUSE OF THIS STAND OUT

What’s actually wrong with raising high-end tax rates back to where they stood during the Clinton administration? Was the economy better or worse then? Were deficits skyrocketing from one year to the next? Were the majority of mainstream Americans generally more or less optimistic about their futures? Were the rich actually suffering, or were their own fortunes generally and steadily improving?

High-end rates through the Clinton years were actually much lower than at any time during the Reagan administration. The Laffer curve, much lauded by conservatives, doesn’t signify that there’s no end to the benefits of additional tax rate reductions; the graph clearly displays the existence of a point at which the curve turns downward–a point beyond which further reductions will produce increasingly negative results.

Abundant evidence strongly suggests that the point in question may have been experimentally determined by way of the Bush tax cuts. While tax cut obsessives point to the increase in economic growth that accompanied them, that level of growth was obviously accompanied by a sharp upturn in the growth of both public and private debt–unrestrained excesses which arguably had far more to do with a transient period of economic boom times than tax cuts. Close examination of past surges of growth following significant high-end tax cuts reveals similar spikes in debt growth, contributing to the continuously accumulating total that we never quite get around to paying down.

Tax-cut proponents deny any such relationship, of course. They conveniently ignore the fact that their iconic Laffer curve actually has a flattening stretch of diminishing returns followed by a downward slope. That’s because the benefits of further reductions continue well beyond the downturn point for those having the highest levels of wealth, income, and power. The process can be sustained for a while, to their additional benefit, provided the negative consequences of that downward slope can be shifted to someone else.

What form would shifting the negative consequences to someone else actually take? Maybe we need only look at the established trends in wages, employee benefits, middle class assets, unemployment rates, and at what’s being proposed with regard to some of the nation’s foundation-level social programs for the working and middle class.

I think real, long-term solutions must involve both spending cuts and a return to Clinton-era tax rates. Everybody will have to take a hit. Neither social programs nor defense spending should be off limits on the spending cut side of the equation. As unpleasant as this is, it’s the only real way out of our dilemma.

To Boehner’s credit is the fact that, unlike some extremists, he really doesn’t want to risk seeing the entire system come crashing down around our ears. He’s apparently not convinced that a better system, truer to what our ancestors really had in mind, can be assembled from the economic rubble.

Isn’t there any politician in Washington that has a set of balls? geesch they disgust me. boehner is disgusting. remember these men and women come next election, they need their butts outta there. phewww I just had to say it.

Poor Gregster…he’s got his pretty pink redistributionist panties in a twist because the GOP won’t go along with tax hikes.

Some questions for Greeyore…

1) If raising taxes is the penultimate answer to all of the nations issues, then why didn’t Obie and the gang take care of that piece of business whilst they had control of the White House, and both houses of Congress (including a super majority in the Senate)?

2) When an economy is inarguably struggling at best, how is it a good idea to raise taxes?

3) How many jobs will be created if taxes are raised?

4) If gov’t spending will help the economy, please point out the stellar results of the $787 stimulus bill.

5) Have you learned anything at all from past examples of failed big government Keynesian solutions?

This article, from Christian Science Monitor, seems like a balanced presentation of the current impasse.

The political problem seems to come down to the inflexibility of tax cut extremists on the far right, and the inflexibility of social program protectionists on the far left. Polls indicate that a majority of voters in the middle ground would likely support a compromise solution.

@disenchanted:

Don’t be so quick to cast stones at Boehner.

The headline on this article does not match the facts of this issue as closely as it should.

Refer to my comments above. #2, 4, and 5.

@Greg:

What’s actually wrong with raising high-end tax rates back to where they stood during the Clinton administration?

How about we raise All taxes to where they were in the Clinton administration. And while we are at it, let’s lose all the tax credits put in place as well. Would you be for that?

Was the economy better or worse then?

That question cannot be answered in relation to the Clinton administration. Yes, the economy was better. However, there was a couple little things that happened to change it, between then and now, such as the Dotcom bubble burst and 9/11, and the recession that hit late 2007/early 2008. Therefore, the economy then, in relation to tax rates, has very little to do with the economy under Bush or Obama. There were, however, other things happening with the economy, that due to taxes, no matter what the rate, increased the federal tax revenue percentage compared to GDP. The tech boom of the late 90’s helped to obfuscate the issue of federal spending, which leads to;

Were deficits skyrocketing from one year to the next?

Again, there were other things going on, separate of the specific tax rates, that caused an higher than historical revenue vs. GDP percentage during Clinton’s. Those percents were very close to 20 percent. Those percentages, under Bush, started at 17.6% in 2001, dropped to 16% the next two years, and then rose until 2008, after the recession hit. Those drops in revenue, as a percentage of GDP, did not happen due to the tax cuts, but rather, the dotcom bubble burst and9/11.

Meanwhile, government spending did increase at a higher rate under Bush(until 2009 fiscal year) than under Clinton, at 31% for Bush, and 21.5% for Clinton.

What does this mean? That federal revenues have, and had, little to nothing to do with the deficit increases seen under Bush, but not under Clinton. You attempt to link the tax rates to the deficits, or surpluses, of both, without looking at the other half of the equation that figures the deficits.

Were the majority of mainstream Americans generally more or less optimistic about their futures? Were the rich actually suffering, or were their own fortunes generally and steadily improving?

Again, there were things going on in the world under Clinton that weren’t under Bush, or under Obama, for that matter. And none of what you ask about had anything to do with tax rates, and some perverse idea that the “rich” paying “more” somehow made life under Clinton better than now.

I think real, long-term solutions must involve both spending cuts and a return to Clinton-era tax rates. Everybody will have to take a hit.

Ok. Again, let’s go back to the tax rates under Clinton. All of the rates, and drop the tax credits put in place under Bush. Take the entire system back to the Clinton era. By your reasoning, the economy, particularly the portion of the government, would be helped by higher tax rates on the “rich”. Would it not, therefore, be safe to assume that the higher rates for All would help it even more?

Any arguing to the contrary, that only higher taxes for the “rich”, and not for the middle to lower classes, will help the economy, completely contradicts your argument, Greg. Not to mention that if we were to put in place the same tax rates, and take away the credits under Bush and Obama, that the “rich”, then, would be paying a significantly lower portion of all federal tax revenues than they did before.

GREG, IT’S THE DEMOCRATS WHO WON’T COMPROMISE,
they are not even participating as much as the others to solve the problem, and obie accused the REP. TO BE LAZYING ON THE JOB TAKING TOO MANY OFF TIMES, WHILE HE DOESN’T REPRESENT HIMSELF IN THE DEBATE,THIS ALWAYS PUBLICLY TO MAKE HIMSELF LOOK GOOD BY DEMONAZING THE REPUBLICANS.
SO WHOEVER SAY THE EXTREMIST RIGHT ARE FAR FROM IT, THEY SHOULD HAVE DONE THAT SOONER, BUT GAVE OBAMA A LOT OF CHANCES TO STOP SPENDING ROCKET STYLE,
SO DON’T COME HERE AND GIVE US THAT CR.P

E-BULLETIN: SUNDAY, JULY 10

Tax Hikes Will Hurt Job Creation

We have three major problems in America: government spends too much; our country is in a debt crisis; and our economy still isn’t creating enough jobs.

House Republicans recently unveiled our Plan for America’s Job Creators to encourage private-sector job growth, as well as a budget, The Path to Prosperity, that takes on Washington’s out-of-control spending and addresses our nation’s growing debt. Neither plan includes tax hikes because we understand that increasing taxes on job creators will only hurt job growth even more.

Now we are facing tough negotiations for an agreement on our debt limit. And unfortunately, despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes.

House Republicans have been very clear that tax hikes will not included in any agreement. The American People do not want higher taxes and the new GOP majority will stand with the people.

Sincerely,

John Boehner

Note the date….today.
____________________

Also see:
Weekly Column

Growing Private-Sector Jobs In America Can Only Be Done Without Tax Hikes

Jul 10, 2011
(Same date, today)

@Aye, #9:

(1) Given the instability of the economy, that might have been a case of less-than-perfect timing.

(2) How was unemployment during the Clinton years, with the pre-Bush tax rates still in effect? Which way were deficits trending then?

(3) How well would the people of a majority of states have managed without the stimulus money? How bad might the situation have become? Republicans seemed very quick to accept whatever they could get. Of course that didn’t keep them from criticizing the policy that helped them get through.

(4) Yes. You do what seems necessary to keep your ship from sinking, and worry about the resultant problems and complaints after the immediate crisis has passed.

@Greeyore:

1) Straw man.

2) Straw man.

3) Straw man.

4) Straw man.

Care to try again?

You cannot answer the questions because the factual data flies in the face of what you’re trying to shovel out here.

@johngalt, #12:

Ok. Again, let’s go back to the tax rates under Clinton. All of the rates, and drop the tax credits put in place under Bush. Take the entire system back to the Clinton era. By your reasoning, the economy, particularly the portion of the government, would be helped by higher tax rates on the “rich”. Would it not, therefore, be safe to assume that the higher rates for All would help it even more?

Fine. The Bush tax cuts boosted after-tax income for people earning less than $1 million a year by an average of 2%, and for average earners by even less. For those earning $1 million and over, the after-tax gain averaged 7% and increased with income level. I guess the Bush tax cut formula would be the opposite of progressive taxation.

Would the average person would be willing to give up 2 cents on the dollar to get the federal deficit under control? When the GOP alternative seems to be accepting deep cuts in social programs to give high earners even bigger breaks?

Somehow I get the feeling that even with the GOP plan, average American workers are eventually going to be out that 2 cents on the dollar anyway. If nothing else, inflation and stagnating wages will see to that.

@Greeyore:

The Bush tax cuts boosted after-tax income for people earning less than $1 million a year by an average of 2%, and for average earners by even less. For those earning $1 million and over, the after-tax gain averaged 7% and increased with income level.

Source please.

@Aye, #18:

The source is The Economist’s View. Third paragraph down.

Citizens for Tax Justice has all manner of data regarding the distribution of the Bush tax cuts, their effect on the federal budget, etc.

@Greg:

Those upper income brackets pay more in, as demonstrated to you repeatedly, so it is logical to expect that tax cuts would fall more heavily on those brackets:

Image Source,Photobucket Uploader Firefox Extension

It’s also been repeatedly demonstrated to you that under the Bush tax cuts the taxation burden actually shifted toward the upper income brackets so your point is entirely moot:

Image Source,Photobucket Uploader Firefox Extension

Allow me to state the obvious: The shares of total taxes paid have have shifted because the shares of total income have shifted. When 95% of the population’s share of income drops even further, those who that money has shifted to will, as a group, likely be paying an even higher share of total taxes. (Unless, of course, they get more tax cuts.)

John Boehner Backs Away From ‘Grand Bargain’ on Debt Ceiling

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes.
I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner.
http://www.christianpost.com/news/john-boehner-backs-away-from-grand-bargain-on-debt-ceiling-52100/

@Greg:

Fine. The Bush tax cuts boosted after-tax income for people earning less than $1 million a year by an average of 2%, and for average earners by even less. For those earning $1 million and over, the after-tax gain averaged 7% and increased with income level. I guess the Bush tax cut formula would be the opposite of progressive taxation.

What you fail to understand is that with the Bush tax cuts, the bottom quintile of wage earners received even more back from the government than they paid in, and the second quintile actually started getting more back than they paid in too. This was mainly because of the addition of another tax bracket at the $8500 income level(2011 figure) at 10%. Previously, this had been 15%.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456

I don’t see those people agreeing to a tax hike on themselves, just to allow the government to take more from the higher income earners, let alone taking away the government dollars many of them are collecting above and beyond what they are paying in. Do you? And that makes this nothing more than an act of jealousy, to limit the incomes of the higher earners simply to subject them to some sort of taxpayer “justice” by the people.

Two words come to mind;
Quitter and Sellout, this is his great big “Thanks Suckers” for putting the republicans back into power in Washington D.C. . Essentially they chewed up the grass roots and spat them out. But what do you expect from his ilk? You were promised and he is not delivering I keep saying a third party is needed and I hear the screaming “No! it will be a spoiler! The democrats will stay in power!” Well it looks as though they did anyway, just leave on the jackass ears and put on a trunk there apparently is no difference between the parties.

@Aye: 2T over 10 years is **NOTHING** and doesn’t even begin to address the problem.

More “smoke and mirrors” from Bone-head, Spaker of the House.

Mune Shadow, hi, I had the same tought, but check with AYE’s comment at the beginning,
he is explaining that the REPUBLICANS and GOP are not giving up,
on the contrary, they are holding up,
It’s the DEM who are trying to shift the blame to REP. in their speech on the MEDIA also. we must not fall in the trap
bye

Time will tell, but I believe these guys and gals say one thing and turn around an stab you in the back and do another.