The general line in corporate media coverage of the so-called “Supercommittee” tasked with coming up with a long-term budget plan is that both sides aren’t willing to budge: Republicans won’t agree to raise taxes, and Democrats want to protect “entitlements” like Social Security and Medicare.
While some might find the idea of Democrats standing up for Social Security and Medicare, it’s not really true–Democrats have offered to make such cuts if there are some tax increases to go along with them. This insistence that a compromise involve a compromise has been depicted, oddly enough, as a refusal to compromise.
But things got slightly more confusing when it was reported that the Republicans had broken their anti-tax stance, and were putting a $300 billion revenue increase on the table. In the Washington Post, Lori Montgomery‘s piece led with this:
Congressional Republicans have for the first time retreated from their hardline stance against new taxes, offering to raise federal tax collections by nearly $300billion over the next decade as part of a plan to tame the national debt.
That is big news. In the New York Times (11/9/11):
Republicans, long opposed to tax increases, said Tuesday that they might allow $250 billion to $300 billion of additional tax revenue as part of a deal to shave $1.2 trillion from federal deficits over the next 10 years.
One slight problem: The GOP tax increase is, it turns out, a massive tax cut for wealthy Americans. As Steve Benen noticed (Political Animal, 11/9/11):
Way down in the same article, in the 16th paragraph, the piece gets around to mentioning that Republican want to trade nearly $300 billion in new revenue for “permanently extending the George W. Bush-era tax cuts past their 2012 expiration date, a move that would increase deficits by about $4 trillion over the next decade.”
That’s the kind of detail that more or less debunks the article’s headline and lede. Think about it: as part of a debt-reduction deal, Republicans want to increase tax revenue by less than $300 billion and cut tax revenue by roughly $4 trillion.
This bit of trickery is still being misreported–in today’s Post, for instance:
Some conservatives in the Republican House majority said they could not support the latest GOP offer to raise taxes by as much as $300billion over the next decade as part of a broader deal to cut spending. The offer marked the first time Republicans other than Boehner have proposed raising taxes above current levels.
Readers had to keep reading several paragraphs to learn that this tax increase is actually part of a massive tax cut–bringing the top rate down to 28 percent.
Perhaps the most bizarre exchange on this topic came on Sunday’s Meet the Press, where NBC host David Gregory insisted that his own reporting should be trusted over the word of Democratic Rep. Debbie Wasserman Schultz of Florida:
GREGORY: They did agree for tax increases that Democrats have not accepted this week. But I want to ask you about, specifically, about the debt.
SCHULTZ: Well, no, no, no…. Come on, David, that was not a serious proposal. What they proposed was, you know, reducing the number of itemized deductions in exchange for a passage, an extension of all the Bush tax cuts, which actually would’ve resulted in less revenue and brought the overall top tax rate down to 28 percent. So that was not a serious proposal. We need a serious proposal that balances the revenue the super committee generates and the cuts.
GREGORY: All right. Well, there was new revenue that was proposed, but I realize that’s still a subject of debate. But let me, let me focus…
SCHULTZ: That would result in less revenue overall.
GREGORY: Let me–well, again, that’s in dispute, according to my reporting on that.
It would be of great value to the country–and to the GOP–if Gregory could explain what his investigation turned up.
Talk is cheap.Proposals(this one in particular) from either side no more than bullshit in the winds.The Republicans seem to be holding to their stance of no new taxes(amazing isn’t it?).Read my lips seems to be cut in stone this time.No games,no finagling ,or fudging.No smoke filled rooms where deals are cut against their constituents in the dark of night.For years before we can all remember taxes have generally been created and grown like weeds on a lawn.Well the weed killers are here folks.Growth(in revenue) will come in only one way now.Expansion of business,jobs and a recreation of wealth.Picking the bones of an ever dwindling tax base, or the richest among us will accomplish little.Time to move past the feel good moments that do nothing.Speaking of Obama………
@michael e: Since you are such a deep thinker, I have some questions for you. What is so hard about getting the spacing right in and between sentences? How do junior high school naughty words improve political discourse? What is “Speaking of Obama………” supposed to mean?
Michael e: Take your hateful opinions elsewhere, every single blog you are on you do nothing but shout out your hateful, inaccurate, negative, ignorant, slander and lible, using defamation on everyone you speak of!! No one cares what you think, in fact I would recommend every person on this blog or any others start reporting you not only to the owner of this blog, but to the authorities! You are extreme and eccentric in your thoughts and words and I happen to support both OWS and President Obama and don’t appreciate listening to your BS about them! If you don’t have an intelligent thought or word, keep it to yourself!!!!!!!!!!!!!!!!!!!!!!!
There is only ONE realistic WAY to tame America’s $1+ trillion annual federal budget deficits and begin trimming back the U.S. Public Debt of some $10 trillion (external) and $5 trillion [internal, i.e., America’s depleted trust funds, e.g., Social Security ($2.5 trillion); Medicare; Military Retirement; Nuclear Waste Disposal and 14+ other trust funds]. See the following link for a summary of the external U.S. Public Debt, and an itemization of the internal U.S. Public Debt (i.e., a list of the 18+ empty trust funds according to the debt owed to each): http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_may2011.pdf
That ONE realistic WAY is to return to the basics of the progressive income tax as reflected in the Woodrow Wilson democrat party’s Revenue Act of 1913 [which implemented the 1909 William Howard Taft republican party’s 16th Amendment to the Constitution that created the income tax in the first place (ratified by 75% of the states in 1913)].
That is, the privileged class traditionally paid ALL America’s BILLS from the very beginning of the progressive income tax in 1913 until the Kennedy/Johnson years—while the tax exempt working class moved into a growing tax exempt middle class that created small businesses, working and middle class jobs, economic growth and prosperity through two world wars and the Great Depression. The 1913 revenue act (actually a tariff act with a supplemental income tax) had a bottom marginal rate of 1% and a top marginal rate of 7%. Because of exemptions of up to $91,500 (in 2011 dollars), few single or married taxpayers paid income tax on the bottom marginal end, and so America’s bills (including defense & war) were paid for on the top marginal end. This is something that the privileged class of 2011 is either ignorant of, or refuses to acknowledge.
Progressive income tax rates accelerated in order to pay for American participation in World War I. The top marginal rate eventually ended up at 25% in the republican years immediately preceding the Stock Market Crash of 1929-32 and the onset of the Great Depression (the DJIA losing 89% of its value by 1932).
Over a period of 98 years, the bottom marginal rate gradually averaged out at about 10%, and the top marginal rate also gradually averaged out at around 70%. During World War II, the top rate was as high as 94%, and 91% thereafter until the Kennedy/Johnson years.
There are stories about famous millionaires such as Humphrey Bogart grumbling about their top marginal rate being so high (after World War II, the top rate stayed at 91% until the Kennedy/Johnson years, when it was lowered to 70%—staying at 70% until the Reagan years, when it was lowered to first 50%, and finally 28% under the guise of trickle-down privileged class job creation which never actually materialized). As a matter of fact, American-in-name-only corporations have moved 75% of their jobs overseas, primarily to China (wages in first Japan and then Mexico becoming “too expensive” over time). Apple computer is a prime example. When Chinese wages become “too expensive”, it is anybody’s guess where these corporations will move their jobs—certainly not the United States of America, that’s for sure. We have to rely on middle class small business job creation in today’s America.
As for Mr. Bogart—he and his fellow millionaires (along with a myriad of other millionaires of the 1930’s, 1940’s & 1950’s) continued to maintain their base of operations here in the United States. After all, this was a good place to become a millionaire and to remain a millionaire. There were no despots and dictators to take one’s millions away.
As to our original premise at the beginning of this post, i.e., the ONE realistic WAY to tame $1+ trillion annual federal budget deficits and begin trimming back the U.S. Public Debt of some $15 trillion…well…we strongly support (of all things) a Reaganesqe tax rate schedule with only TWO RATES and ONE sliding THRESHOLD.
However, there is a PROFOUND DIFFERENCE between Mr. Reagan’s (1988) 28%/$29,750/15% tax rate schedule and ours. His top marginal rate of 28% merely enriched the already wealthy—all the while congress beginning its engagement in a massive 30-year long “trickle-down” borrowing binge to pay America’s bills and keep the economy humming (supply-side, trickle-down, top-to-bottom job creation being for the most part a mirage, except during the dot-com boom and bust of the 1990’s). Not only that, Reagan’s bottom marginal rate of 15% was actually a massive tax increase on the middle class, the bottom rate being 0% prior to the effective date of Reagan’s 1986 revenue act (effective in 1988).
We propose a two-rate/single-threshold tax rate schedule of 70%/$350,000/10% to replace the present 6-rate tax rate schedule of 10%, 15%, 25%, 28%, 33% & 35% for 1) individual taxable incomes (after exemptions/deductions). Likewise, we propose jettisoning the current 35% top marginal rate for corporations on 2) net business profits—and rescinding the present 15% top marginal rate on investors’ 3) long-term capital gains.
In other words, ALL TAXABLE INCOME would be taxed at the two rates included in our sliding scale of 70%/$350,000/10%. In order to stabilize the income tax system (something republicans generally always say they want), we propose that the 70%/10% rates stay in place for at least 20 years, and that the $350,000 threshold remain in place for at least 10 years. Let’s not forget that America has a $15 trillion U.S. Public Debt to pay down—and a AAA credit rating to recoup.
One must take into account that within the 1) individual 2) corporate and 3) investor elite of this country, fully 2/3 of their taxable income is primarily derived from capital gains on investments in and the buying and selling of stocks, real estate and other capital assets. It’s no wonder then, that the government is starved for revenue and must continue its borrowing binge (along with printing & minting…something that merely reduces the value of the U.S. dollar through massive increases in the money supply).
We’ve learned just recently that the elite investors of this country (spearheaded by the republican party) are seeking to eliminate all income taxes on capital gains (in addition to eliminating the federal estate tax). In so doing, America’s elite would be taxed at 0% on 2/3 of their incomes (both in life and in death).
The economy of the U.S. has “flipped” in the past 30 years since Mr. Reagan’s time in office. Small businesses create 75% of middle class jobs INSIDE AMERICA. Our proposal of a 98-year average 10% bottom marginal rate on ALL TAXABLE INCOME below $350,000 would take the pressure off of middle class 1) individuals 2) small businesses & 3) small investors—thereby encouraging the middle class to create middle and working class jobs producing products & services that can be consumed right here INSIDE AMERICA by the middle class.
On the other hand (and as during World War I and World War II), our proposal of a 70% top marginal rate (also the 98-year average) on ALL TAXABLE INCOME above $350,000 would ensure that something concrete and lasting is done about taming America’s $1+ trillion annual federal budget deficits (i.e., paying America’s bills) and trimming back the U.S. Public Debt of some $15 trillion ($10 trillion external/$5 trillion internal).
Are we being politically realistic? No. Are we being economically realistic? Absolutely—yes we are.
Will congress and the president put aside politics and get serious about economics and America’s shrinking middle class economy? That is the question that must be answered, and very soon. Does the average American want to end up like Euro Zone citizens whose governments must continue to keep refinancing their sovereign debt in order to avoid going down the proverbial financial drain? We think not.
These European countries (e.g., Greece, Italy, Portugal, Spain, Ireland…and now even France) must maintain a steady stream of borrowed money to create the illusion of prosperity. However, when the value of their bonds goes down and down, these countries’ find that the truism of higher and higher rates hits them right between the eyes. In other words, at some point (if not already) many of these countries will no longer be able to borrow…no longer be able to refinance (restructure) their burdensome sovereign debt. Then the Euro Zone will come tumbling down like a house of cards.
Right now, the U.S. can still borrow at relatively low rates. But does that make it wise. No, we think not. Should we continue to borrow from say, China, while also allowing Chinese products to flood our markets—putting the squeeze on America’s small businesses and preventing the creation of jobs for lack of demand for America’s small business products & services? No. Absolutely not!
OKJack┞¢Group┞¢
Middle and Working Class Disabled American Veterans┞¢
We Paid the Dues that Aren’t Required!┞¢
I hate these fuckers with all my heart. They don’t give a flying fuck about this country and are actually willing to plunge this country into absolute chaos just to force the middle class into desperation, as they see this as a chance in a lifetime to subject us all to servitude and wage-slavery in ending any and every new deal program. They will destroy every public program imaginable, except of course the ones that benefit the ultra-rich, which is really the POINT of destroying any other program in order to CROWD-OUT spending on the middle class, I.E. they want to SOCIALIZE the costs of their cronyism on us. I pretty much want them dead.
Maynard and JMT.
I simply am saying, that I do not feel that raising taxes at this time in our history is a smart move.And Im happy that there is representation in Washington that is not just pandering to peoples fears(while working overtime to instill them)I think the math is better on the Republican side of the isle this time around.I think when Obama moves on to what i hope is a wonderful life,that things will get much better for everyone involved.I think we can all work to remove the divide between left and right,and remember who we are(please access Australia’s Julia Gillards speech on America).Now above you will read Yer Mama says say “I pretty much want them dead”.In your world though -Im the hater
OK JACK
Thank you for telling the simple truth.Finally a liberal who says it like it is.
Take what the rich have to support everyone else- who can then be relieved of their tax burden so that they can go on to create the brave new world.Having no skin in the game will of course explode their love and worth for whatever they have NOT paid for Im sure.I do wonder why the so called rich wont just work a hell of a lot less to get under the ‘earn level”,but lets not muddy the waters.Should we also forgive all debt on anyone except the so called rich?It sounds two fold like a failure to these ears.Creation of a nanny state.And asking the middle class to take over the creation of a new economy that you have deemed the upper class unworthy of.This leading to a destruction of those who try to create on a large scale(Bill Gates) in favor of those who create and live on a small scale(my uncle Rons hardware store)Im wondering again though……what happens when the Bill Gates of this world realize it is not worth it so they just open a hardware store next to uncle Ron?All those taxes gone poof!You believe that by taking what the rich have ,and giving it to everyone else will instill in those people a drive to earn what they have in the past taken ,so that it can be in turn taken from them.interesting.Again thank you for making our choices so clear.
As with most things, when the pendulum swings too far one way, it has to come back. If it doesn’t the walls start to crumble. Strengthing the middle class and small to medium business is where we need to be headed. Large corps will need to search the world for their best labor rates if the want to be competitave. Fine, let them go. But if they want the benefits of our laws, constitution, courts. military, defence inteligence and general infrastructure to be based here, then they need to pay. Bankers and investors that have more than benefited from obsurd capital gains taxes need to pay for the same benefits as above. Americans want to work but we are raising a generation that doesn’t know how and they won’t won’t pass on the desire to succeed to their children unless we figure this out soon. Raise revinues and cut spending. Bring the pendulum back to the middle.
Republicans are douchebags.
We should go back to what worked in our past when our leaders had courage and morals.
The corporations didn’t get where they are by playing fair. Make them, or break them up.
We seem to forget that the government they always talk about BEING THE PROBLEM is the same one that GIVES THEM THE VERY RIGHT TO INCORPORATE. It’s a right that can just as easily be removed by the people of the country.
You don’t have a society when there is this much inequallity. You have Lords and serfs.
Only this time, the serfs are armed citizens who are just waking up to the truth that they’ve been had.
God help us if our leaders don’t wake up too. It’s only a matter of time before we get more cases of people like that guy lately taking pot shots at the white house, only they’ll be targeting a wide range of upper class individuals who didn’t seem to care before the shooting started.
I don’t support or advocate this sort of thing, but you’d have to be completely stupid to not see where this is gonna end up if the Republicans keep destroying America with their GREED.
Michael I would say your beliefs are very much in line with the liberal mindset.I hope the next group to take power will be filled with people brimming with positivity and drive.Love of country and the amazing possibility the future holds.This country is just waiting to explode forward.Read what the leader of Australia just said of America.She said it so much better than Obama.Truly sad but true.Enough of this living and thriving in sadness and misery.As we promised would happen under Obama and liberalism.God what an endless wet blanket.