Watchhttp://www.latimes.com/news/politics/la-pn-boehner-fiscal-cliff-taxes-20121129,0,4107018.story
a down payment of $900 billion in new revenue from allowing the upper-end tax rates to expire, as Obama proposed, for those couples earning more than $250,000 or $200,000 for single households. The top tax rate would increase, to 39.6%, and the 15% tax rate on dividends would also rise, to 20%.
Under Obama’s proposal the other tax rates would remain at today’s level, averting the $2,200 average tax hike that would come at year’s end if they are allowed to expire.
The Republicans have no offer on the table other than the Ryan bill that they already passed. The same bill that would have lowered Mitt Romney's taxes to $0.00.
In fact I haven't been able to find any Republican plan published anywhere that doesn't simply deny any tax increases of any kind.
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AverageBear says
How do they have leverage ?
Keep in mind, by definition, the rich republican benefactors all make over 250K, so they really want the tax cuts on the first 250K they make. THey also need the economy not to go in the tank.
Plus, when they go over the "cliff" big defense cuts that are hard to make and other huge cuts in spending will be made.
COOL !!
Then the democrats will immediately propose tax cuts for the 98%. They will be in the media's face over and over and over and over and over and over and over and over saying "why will the republicans not agree to cuts for the 98% ?"
And you think the democrats are going to be politically hurt ?
You watch WAY too much Fox News.
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As far as I can see, the democrats have SO SO SO much leverage here, that they don't even exist anymore in my opinion, if they fuck this up.
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Bellingham Bill says
How's that working out for them?
Europe's jobless lines keep growing
http://money.cnn.com/2012/11/30/news/economy/europe-unemployment/index.html?iid=HP_LN
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iwog says
--------------------------------------------------
This thread is about Obama's tax offer. And using Geitner as a proxy? What a pussy. We don't have a Republican counter-offer because they haven't stopped laughing yet....
http://www.weeklystandard.com/blogs/mcconnell-geithners-presentation-obamas-plan-serious-blow-his-credibility_664233.html
......"The top Republican in the Senate, Mitch McConnell, revealed to THE WEEKLY STANDARD that he “burst into laughter” when Treasury Secretary Tim Geithner outlined President Barack Obama's fiscal cliff plan yesterday. McConnell believes the plan is "completely unserious."
......"In an interview with radio host Hugh Hewitt, McConnell elaborated, calling Geithner's water-carrying "a serious blow to his credibility." He said the treasury secretary "ought to be embarrassed."
"Did he outline what other taxes he wants to raise?" Hewitt asked McConnell.
"Yeah, you know, it’s all on the usual poll-tested, oil and gas, raise the estate tax, there’s hardly anything they missed," responded McConnell. "It is a massive, whopping punch right in the nose to the American economy. I can’t imagine the Democrats would support it. I mean, Max Baucus, the chairman of the Finance Committee, is certainly not going to support the estate tax proposal, Mary Landrieu, the Democrats from Louisiana, is not going to support the gas tax. Neither is Mark Begich of Alaska, completely unserious, and here we are witnessing the President running around the country thinking the campaign is not over yet. And they’re presenting laughable suggestions from the Secretary of the Treasury. He ought to be embarrassed to be asked to go up here and do something like that. It’s a serious blow to his credibility."
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AverageBear says
Not calling you Elvis. You don't believe the stimulus worked, I believe Elvis is alive. They are both equally credible.
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marcus says
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Last I heard, they control the House.
marcus says
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I'm OK with this... As opposed to Obama's latest hilarious 'offer', that has ZERO cuts.
marcus says
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I can't comment or argue on 'What If's", and "you know the (fill in name/party here) will do (fill statement here)", and other hypothetical BS. I can only argue or want to talk about the present..... Nice projection on my TV-viewing habits. With 2 kids, work, and my hobbies, I really don't watch too much TV. Much of my info is off the 'net....
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AverageBear says
I thought it had 400 billion in cuts?
http://www.businessweek.com/news/2012-11-29/geithner-said-to-offer-fiscal-plan-with-entitlement-cuts
"Treasury Secretary Timothy Geithner shuttled among congressional leaders yesterday with a plan to trade $1.6 trillion in tax increases for $400 billion in unspecified entitlement program cuts, Republican congressional aides said."
Hey, republicans should have taken the deal last year offering 2.5 dollars in cuts for every dollar in revenue increases.
Now, they have deep automatic cuts on defense and tax rates increasing unless they do something. Republicans have no leverage - most of what Obama wants is already going to happen without compromising - in fact, he is offering to reduce the defense cuts and Reduce tax increases.
So republicans, unless they change their tune, would be voting against reducing defense spending and against tax cuts for 98% of the electorate.
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david1 says
--------------------------------------------
I think the stimulus worked as well, in stopping the markets from panicking. But it also didn't work because it didn't fix the fallout from the original problem, 'passed the buck' and pushed the problem into the future. Immediate fiscal crisis over? Yes. Deficit spending? No. Sustainable budget? No. Unemployment fixed? Nope. Economic Growth fixed? Nope...I'd trade in those blue-suede shoes for some gold or silver. It's gonna get nasty....
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david1 says
--------------------------------
By this, do you mean a 'pinky promise' to cut spending for the next 10 years into the future, instead of now? Sorry, that won't work at all...
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david1 says
------------------------------------
"Unspecified" ?!! You gotta be kiddin' me. You are basing an argument on this?
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The Republicans don't have the balls to let military spending drop because all their constituents would be out of cushy government jobs and those constituents would fire all their representatives.
The only question is do the Democrats have the intelligence to realize this and make no compromise. The Democrats should turn the tables and dictate the terms for letting military funding stay at anything more than 10% of its current value. The Dems should tie this to getting every reform, including real healthcare reform, passed.
But then again, the Dems are pussies and they'll probably end up sucking Republican cock.
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AverageBear says
That's not leverage, that's just agency.
Leverage is the ability to extort what they want.
Two years ago the Republicans had the sudden expiry of the 73 extra weeks of unemployment benefits back when in economy was a lot worse off that it is now, so being the evil fucks they are they insisted on extending the tax cuts on the top 2% in return for re-extending the extra unemployment.
This time around, things have been structured such that doing nothing hurts Republicans massively, since this bullshit situation is entirely of their own incompetent design.
It is true that nothing is going to pass without some Republican support in Congress. Time for the Republicans to man up here. We don't need to find many sane ones in the House, just 12.
nb, seeing Geithner as messenger boy kinda gave me the notion that Obama's strategy as Pres is to identify all the non-insane, competent Republicans and coopt them into working for government as opposed to party.
This marginalizes the remaining Republicans more, into the pack of screeching monkeys they are now.
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AverageBear says
The Republicans are perfectly free to propose the spending cuts they do want to see.
Hop to it!
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Lafayette, CA
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AverageBear says
Yes.
AverageBear says
Obama is offering a very moderate increase in taxes. It's the job of Republicans to counter-offer with spending cuts they want in return. The reason they don't counter-offer exposes the rotten core of Republican politics and Republican lies and is the true reason the country is fucked as long as Republicans hold any political power at all.
Why? It's very simple. Republicans:
1. Cannot cut "defense" spending and most want defense spending increased.
2. Cannot cut Social Security without losing a key demographic in retirees.
3. Cannot cut Medicare. (ditto)
4. Cannot cut pensions, unemployment, and food stamps during a recession.
There literally isn't anything left. The entire debate is a lie and a fraud. Republicans NEVER had a legitimate plan. They floated the Ryan bill which essentially eliminated Medicare as a test balloon guaranteed to fail and it was shot down along with Republican dreams of returning to the White House.
Republicans are bluffing without even holding cards.
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AverageBear says
The Ryan plan would have literally cut Mitt Romney's tax bill to $0.00. Literally, no bullshit here. This is the gospel truth. A man who took $20-$25 million per year in profits as a corporate raider who doesn't give one single cent to the federal government.
This was not a serious proposal, this was an anti-American atrocity. It was an insult to every person who has ever received a paycheck in this country. Bringing it up shows just how much of a fucking moron Krauthammer is and again illustrates why Newscorp is a joke.
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iwog says
That may be true but it still will lead to financial destruction without any spending cuts, math just is and doesn't lie, let alone care about politics:
http://market-ticker.org/akcs-www?post=214443
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mell says
Math doesn't lie but people often lie about math.
Japan has printed double what we have and has suffered NONE of the ill effects predicted here. This would be like the government spending ANOTHER $16 trillion tomorrow. There will be no financial destruction.
I do agree that we need a balanced budget eventually, however it will require tax increases. The Democrats are in full control now that Republicans have failed in the 2012 elections. If Republicans don't capitulate, taxes go up far more than any Democrat is currently proposing.
It will be a Republican time bomb going off from a Republican tax bill with Republicans standing in the way of fixing it.
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iwog says
Wait, you mean we can't balance the budget by eliminating the National Endowment for the Arts and the Center for Public Broadcasting?
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AverageBear says
We would be at 50-60% unemployment and the stock market would be at 6000 DOW if we had not pumped all the QE into the system. So yes, it did work to at the very least. .maintain jobs.
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BoomAndBustCycle says
Mostly very low wage jobs, no good if 1 in 7 is on food-stamps. You need decent paying jobs in manufacturing, but that ship has sailed a while ago and is not easy to turnaround.
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mell says
QE is exactly what we need to weaken the dollar to get US wages more competitive against German and Chinese workers.
It's medicine, LOL.
Too bad it kills the patient in the end.
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47 male
Lafayette, CA
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There will be a time in this country where there is no such thing as skilled labor. Mental ability will be replaced by computers and physical ability will be replaced by robots.
Even today you see doctors and lawyers relying on technology instead of their own expertise, and it's only a matter of time until they become obsolete.
http://www.ama-assn.org/amednews/2011/11/21/bisb1121.htm
As a society we have some very complicated decisions to make. Are we going to consider anyone who doesn't own capital to be a leech and a burden, or are we going to recognize that the vast majority of humans on planet earth will have to be given "welfare" because there isn't anything left for them to do?
This is not hypothetical. In my lifetime I have seen airline pilots go from being one of the highest paid professions to one of the lowest.
Why? Because experience doesn't matter anymore and most large planes can fly themselves. I was on a Virgin flight yesterday and the pilot couldn't have been more than 28 years old. The co-pilot was even younger.
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Bellingham Bill says
I can see the edge for the Chinese, but how do you explain that the Germans are such great manufacturers/exporters? After all, they keep inflation very low and oppose money printing and can still pay decent wages while staying competitive. Well for one they are less hooked (if at all) on cheap shit from china ;)
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Because the Germans don't give all their wealth to the top 1% like we do. When you enforce high wages and tariffs, you keep all the manufacturing jobs at home.
http://en.wikipedia.org/wiki/File:Gini_since_WWII.svg
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iwog says
Some truth to that, but that's one of the many parts to that like them not being hooked on inferior chinese goods or Obamaphones. This is a lengthy topic, but in many ways Germany is way more capitalistic in its original sense than the US. Germany doesn't privatize gains while socializing losses (at least up until now) and if they can stand their ground and tell the PIIGS, the bankstas & politicians and the EMF to fuck off then they can maintain their way.
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mell says
Stop. Germany has a social market economy. This is keynesianism on steriods. They ensure full employment despite capacity under-utilization.
Every worker in Germany is a member of a government central union. The supply of labor (and therefore, private corporations) are controlled by the government.
Germany's economy does well despite not having control of its currency because its spreads it wealth around and has much less hoarded capital than other more capitalistic states.
Basically, Germany is the complete opposite end of the spectrum from the US when it comes to "free-market" vs. "pure Capitalism." And that isn't because it is "more capitalistic" than the US.
If we proposed any one of Germany's social programs in the US, it would be labled socialist. Germany's health care system is 77% funded by government. In the US, 45% is funded by government (fed and state combined) Germans pay social security insurance of 20%. The US pays social security insurnace of 12.4%. As I mentioned before, the social market economy allows the goverment to control the labor force.
All of that with relatively few natural resources to exploit.
I love it when right wingers point to Germany's economic model. They don't even know what they are saying...
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One of my college profs remarked (on the subject of the relatively high industrial productivity of Communist East Germany), "No one yet has devised a system of government capable of preventing Germans from working".
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david1 says
Dude, I grew up in Germany and have no idea what you are talking about. There were quite a few things wrong, plenty of Germans do not belong to any union is just one example. How they handle SS has nothing to do with socialism, let alone keynesianism. It's just a contract that you have to pay in enough to get out enough agreed upon by the majority of the population instead of receiving more than you pay in like here in the US and have the children foot the rest of the bill. The US is the keynesian on steroids. The most important difference though is that they don't socialize losses while privatizing gains, which makes them capitalistic and distinguishes them from the US crony capitalism (which has a lot in common with socialism). It wasn't always like this, but it has evolved that way, Germans are very responsible with their money and don't consider going in debt a good thing to do and don't expect to get bailed out or bail somebody else out who did.
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david1 says
They don't, UE has been around double digits, but those who are employed make enough to pay for non-inflated goods. No food stamps proudly sponsored by Bank of America debit cards necessary. They also don't have a right to own a house, just a right to find basic shelter. If you can't or don't want to afford it you will never own a house and still be functional member of society. If you do want one, you have to start saving soon enough and spend less money on iCrap.
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david1 says
The US has left the path of free market or pure capitalism a long time ago - ask the Fed for more info ;)
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The sixteenth amendment was yet another sad product of the "progressive era," which was really a dark age.
Woodrow Wilson was the worst US president ever, by far.
It would be great if all amendments starting from the 16th could be rolled back.
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Melmakian says
You might almost have a point if, like your straw man, I used the term "Obama's plan" instead of "Obama's tax plan". It would be a trivial argument and it would mean nothing but at least it would be defensible.
Melmakian says
Nothing in history backs anything you say here up.
Anyway it doesn't matter because I don't care about closing a trillion plus deficit. All I care about is distribution of wealth because in the end, that's all an economy is used for. I'll acknowledge all the reality you want but you never support anything so there's nothing for me to confirm or deny.
Example: Claiming history backs you up with no discussion of what history backs you up.
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Sunnyvale, CA
iwog says
Most people would not consider a 59% tax increase "moderate" which if he gets his way is what we'll have compared to when Obama took office
In 2004 the capital gains rate was 15%.
Obama passed a 3.8% surtax increasing it to 18.8%.
His proposed 5% increase will bring the total to 23.8%.
23.8% is 59% more than 15%.
Assuming constant tax rates, brackets and exemptions/deductions indexed to inflation, and wages keeping up with inflation a software professional could coast through a career of 45 hour a week positions earning the last $3M of their career in current dollars working another 20 years for a $150K salary with an effective tax rate of 15.4%, 12.5%, or 11.7%.
( $150K gross income, $4800 above the line for health insurance, $1500 for FSA expenses, $11900 standard deduction, and $7600 in exemptions. Rates are married filing jointly with one wage earner. The three come from no deductions for 401K contributions since they'll eventually be taxed as ordinary income, with the legal maximum, and the maximum plus catchup contributions for those 50 and over ).
Or that individual could work over twice as hard for a few decades and land $3M in a liquidity event from a successful venture funded startup and skip the last twenty years of working for a paycheck (where the attractive alternative is bootstrapping companies without a salary which then create jobs if funded).
They should be paying the same income tax for the same earnings and similar work regardless of whether that was spread out over 20 years or 40 unless taxes are being used for social engineering purposes.
If this is about encouraging behavior we're better off rewarding the high-work high-reward behavior that creates jobs with lower tax rates.
We already do that for wealthy investors (50% of the capital gains are tax free on the greater of $10M or 10X original issue stock price on companies with a value of $50M or under at the time of purchase) and ought to be doing it for the people putting in sweat equity.
A cynic would suggest we don't because worker bees can't afford politicians while the big cash investors can.
America already has the most progressive income tax system (defined as the top earning decile's ratio between share of taxes and share of income) out of the OECD 24 including Australia, Austria, Belgium, Canada, The Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, The Netherlands, New Zealand, Norway, Poland, The Slovak Republic, Sweden, Switzerland, and The United Kingdom. Becoming more punitive is taking things even farther past the bounds of reasonableness.
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Progressive taxation is a symptom of democracy running amok. Soon enough, all we have left is demo-crazy and medio-cracy.
You ask those who pay no income tax if the top-earners should pay more. What do you expect?
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iwog says
This is an important point in considering allowing wealth to concentrate upward (the trend since ~1980) versus a progressive tax structure that prevented concentration of wealth upward (with the problems of hoarding/economic stagnation and dynastic power structures emerging) and fueled an era of single-worker families with good quality of life, and accomplishments such as the interstate highway system and space program.
Consider the science fiction of the era, which sometimes explored the theme that improved productivity by technological means (versus sheer manual labor) would reduce the age of retirement to birth... for virtually ALL of society, not just the few that reached a scale able to game the system to their advantage to the detriment of others.
After 30+ years of Voodoo Economics, we have the exact opposite: Age of retirement increasing.
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Automan Empire says
Median rent in Sunnyvale is now $2000/mo.
That's half a (well-paid workerbee) paycheck right there. The housing stock used to have rents in the $500-700 range; the sticks & bricks haven't changed but the community's ability to pay has, so we pay more for the same stuff.
Seeing this basic dynamic has ruined my life : )
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drew_eckhardt says
the usual conservative cant from the Conservative Book of Bullshit.
robbing banks is high-work high-reward.
All returns to capital in this economy are not the same. At this point we really need to sock it to the rich to save our society from turning into a Mexico or Brazil.
http://research.stlouisfed.org/fred2/series/GINIALLRH
http://research.stlouisfed.org/fred2/series/CP
Conservatives see these two trends as good things, "Winning."
Well, yes, you guys are. Right until this experiment blows up in all of our faces.
Becoming more punitive is taking things even farther past the bounds of reasonableness.
Check your data. While I agree we're all undertaxed and everyone needs to pay a lot more in taxes, the top marginal rates in the eurosocialist countries are not as low as ours currently are.
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Bellingham Bill says
Yeah, but not everybody can be a banksta and only the banksters can rob banks while ordinary criminals usually fail at that and get caught (or shot).
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47 male
Lafayette, CA
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http://research.stlouisfed.org/fred2/graph/?g=dkA
blue is corporate profits
red is corporate tax on profits