Tag: tax reform

The surtax would impact around 345,000 taxpayers, roughly 0.2 percent of taxpayers, or one in 500 of them. Those people would pay on average an additional 2.1 percent of their overall income, or just over 1/50th of that overall income, in taxes.

In a majority of states, only one-tenth of one percent, or one in 1,000 taxpayers, would pay this surtax.

And how many people would benefit from the payroll tax cut? According to the group, around 113 million tax filing units — either single workers or families that include more than one worker — would see their payroll tax cut extended. That’s a lot of people — well over 113 million workers, in fact.

Citizens For Tax Justice runs the numbers on the proposed funding mechanism that would extend the payroll tax “holiday” currently scheduled to end December 31, 2011. I don’t have to remind you that Republicans are categorically against this tax increase, because it harms the “job creators” out there in that 0.2 percent.
The vast majority of the GOP’s 1% constituency wouldn’t even see so much as a dime’s difference, whilst everyone earning a paycheck would stand to receive ~$1000 dollars more in an aggregate demand crisis. So, of course, we prevent the tiny increase for a tiny fraction of the richest people on Earth in exchange for a further insult to our tottering economy when the payroll tax extension is worth ~$250 billion to our economy. Great policy.
Source: Washington Post

Upstairs/Downstairs

John Kyl (R, AZ), Saturday: [tax increases are] the wrong medicine for our ailing economy, […] [any possibility of a potential future increase only serves to] put a wet blanket over job creation and economic recovery.
John Kyl (R, AZ), Sunday: The payroll tax holiday has not stimulated job creation. We don’t think that is a good way to do it. [Thus we want to raise taxes on every American that currently receives a paycheck]. The best way to hurt economic growth is to impose more taxes on the people who do the hiring. As a result, the Republicans have said, ‘Don’t raise the existing tax rates on those who do the hiring.’ [That is to say, the 1%. Who aren’t, uh, actually hiring. But still. Don’t raise THEIR taxes. Raise the 99%’s taxes. Only that will get the old economy going again!]
Lemkin: Again, the MSM will see no dissonance whatsoever in these positions. Of course raising taxes on most everyone in the country to avoid a tiny tax increase on a tiny fraction of the country makes the best economic sense in an aggregate demand-based economic downturn. What other conclusion is even possible given this data? Surely both sides are at fault for low aggregate demand in the 99%; this is only fixable if both sides agree to lower taxes on the 1%. Again: what other conclusion is even possible?

The Rub

In all the rush to cast a pox on both houses, most Serious People seem to be missing the underlying point here.

The Republicans want tax rates to remain at current (i.e. Bush/Obama tax cut) levels or to be lowered. To do that without collapsing the Federal Government, they have to end Medicare. Period, the end, no other way to do it. Zero the non-military discretionary budget and you still aren’t getting particularly close. Thus, this:

…committee Republicans offered to negotiate a plan on the other two health-care entitlements–Medicare and Medicaid–based upon the reforms included in the budget the House passed earlier this year [this is what is commonly referred to as the “Ryan plan”; it ends Medicare but leaves in place a voucher system which seniors would use to try to buy coverage on the open market. Good luck with that, seniors. Anyone paying attention will recall that this is the issue Medicare was created to solve. At any rate, under Ryan’s plan everyone that fails to find coverage they can afford with regard to the differential between voucher and actual cost: go die in the streets.]

Republicans on the committee also offered to negotiate a plan based on the bipartisan “Protect Medicare Act” authored by Alice Rivlin, [which would allow seniors to] choose from a list of Medicare-guaranteed coverage options, similar to the House budget’s approach–except that Rivlin-Domenici would continue to include a traditional Medicare fee-for-service plan among the options.

So, the GOP “choices” here are: completely voucherize and functionally end Medicare under the Ryan plan, or vastly extend Medicare Advantage and get to Ryan’s plan stepwise. After all, Medicare Advantage has bee such a smashing success; it’s the plan that delivered a ~14% more costly version of Medicare, the program it sought to “revolutionize.”

Democrats, on the other hand, believe that a return to Clinton era tax rates fundamentally solves the near- to mid-term budget issues. This is widely known to be true; it is also known to be true by Republicans, who are simply using the current “crisis” (which, not coincidentally was invented by them during the run-up and denouement of the debt ceiling “crisis”) as an excuse to attempt various long-held policy goals, most notably: ending Medicare.

Long term issues in our budget do indeed exist, these can only be handled by bringing health care costs under control; Democrats wish to work towards that goal, Republicans choose to address the issue by simply ending that program entirely. This is the point at which it’s worth noting that, if we paid for medical care the per-capita rates that our next-nearest “competitor” pays, we’d be facing surpluses as far as the eye can see. Right now.
But, a massive step in that “solvency” direction would, in fact, be Medicare for all. Instead, the GOP demands Medicare for none or they blow up the country. Those are your two GOP-approved choices. They simply don’t want to talk about it in public, because eliminating Medicare is a wildly unpopular position to hold. You’d think someone in the media would mention something as explosive as this from time to time. Doesn’t ever seem to come up.

Clearly, though, both parties are equally at fault here. Truly a triumph of 21st Century Journamalism.

the current hand wringing about the administration’s pledge [not to raise sub-$250k tax rates] feels like a distraction…especially given that we could achieve medium term sustainability without going there.

Jared Bernstein agrees that we can achieve neutral debt/GDP ratios without savaging middle class rates. Serious People sure love to wring hands. It’s as though they have a vested interest in the tax rates of the trans-$250k class. Oh, right.

Again with the Middle Class

It’s almost as if our media aristocracy of inbred Serious People have a vested interest in seeing to it that the middle class, and only the middle class, gets soaked in any economic “compromise.” Amidst reacting to a particularly poor NYT Magazine piece, Dean Baker nails it:

…the piece too quickly dismisses the possibility of getting substantial additional tax revenue from the wealthy. It presents the income share for those earning more than $1 million as $700 billion, saying that if we increase the tax rate on this group by 10 percentage points (from roughly 30 percent to 40 percent), then this yields just $70 billion a year.

However, if we lower our bar slightly and look to the top 1 percent of households, with adjusted gross incomes of more than $400,000, and update the data to 2012 (from 2009), then we get adjusted gross income for this group of more than $1.4 trillion. Increasing the tax take on this group by 10 percentage points nets us $140 billion a year. If the income of the top 1 percent keeps pace with the projected growth of the economy over the decade, this scenario would get us more than $1.7 trillion over the course of the decade, before counting interest savings. Of course there would be some supply response, so we would collect less revenue than these straight line calculations imply, but it is possible to get a very long way towards whatever budget target we have by increasing taxes on the wealthy.

Shocking. And but also, Baker smartly includes the most important issue in any truly serious discussion of American economics and the proper balance of same: the cost of health care:

We pay twice as much per person as people do in other wealthy countries. Since more than half of the tab for our health care is paid by the government, our broken health care system becomes a budget problem. If we paid the same amount per person for our health care as people in other wealthy countries, we would be looking at long-term budget surpluses rather than deficits. The reason that we pay so much more is not that we get better outcomes – we don’t generally. Rather it is that we pay too much to drug companies, hospitals, medical specialists, and others in the health care industry.

Baker’s being generous. We spend as much as five times more per capita than the best performing countries do, all of which achieve uniformly better outcomes than we do. Obviously, the only possible answer here is just get Big Guvmint out of the way so the poor can kindly go die in the streets. It’s the only serious answer to the problem. Well, that and lowering taxes on the wealthiest 1% of the country.

Read the whole thing.

Again with the Middle Class

You have a one-half of one-percent surtax on the 1,000,0001th dollar – in other words it doesn’t affect anybody who makes $999,000, it doesn’t affect anybody making $999,999 – and if you want to find the guy who make $1,000,0001, it only affects that $1. That’s the only thing the rate goes up on. If you make $1.1 million, and god-willing this passes, you would pay next year, $500 more in taxes. […] I say to the American people: watch your senator. Watch him or her choose: Are you going to put 400,000 school teachers back in classrooms; are you going to put 18,000 cops back on the street, and 7,000 firefighters back into firehouses? OR are you going to save people with average income over $1 million a one-half of one-percent increase in tax on every dollar they make over a million.

Joe Biden and every other Democrat in Washington DC should’ve been talking like this since day one. But now is as good a time to start as any. More please.
Source: tpmdc.talkingpointsmemo.com

Herman Cain: If it’s good enough for Sim City, it’s good enough for America.

gonzodave:

Aside from being an egomaniac, Cain is a plagiarist.

~g

Long before Cain was running for president and getting attention for his 999 plan, the residents of SimCity 4 — which was released in 2003 — were living under a system where the default tax rate was 9 percent for commercial taxes, 9 percent for industrial taxes and 9 percent for residential taxes. (That is, of course, if you didn’t use the cheat codes to get unlimited money and avoid taxes altogether.)

Cut to: Bachmann press conference in which she breathlessly announces that she’s gained access to the secret government cheat codes which, when entered into a secret keypad in the Bible on the day of her inauguration, will allow for unlimited revenue on no taxes whatsoever. Ladies and gentlemen, we have a new national GOP polls leader.

Herman Cain: If it’s good enough for Sim City, it’s good enough for America.

…if you tax achievement, some of the achievers are going to pack it in. Again, let’s take me. My corporations employ scores of people. They depend on me to do what I do so they can make a nice salary. If Barack Obama begins taxing me more than 50 percent, which is very possible, I don’t know how much longer I’m going to do this. I like my job but there comes a point when taxation becomes oppressive.

Bill O’Reilly, considering his future employment options in some Obama-wrought hellscape. 50% top tax rate it is, then.
PS, Bill: Wikipedia has a fascinating entry on just how it is that marginal tax rates work. Surely a man with your tremendous job-creation skill-set (one that has led to the employment of four score and seven employees) can read and understand this. So you know: not actually half your income. Even if it happened. Which it won’t, since it’s a figure (like most you employ) that you pulled out of a falafel.
Source: mediamatters.org

It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. Anybody who says we can’t change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out. They should have to defend that unfairness — explain why somebody who’s making $50 million a year in the financial markets should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying more than that — paying a higher rate. They ought to have to answer for it. And if they’re pledged to keep that kind of unfairness in place, they should remember, the last time I checked the only pledge that really matters is the pledge we take to uphold the Constitution.

President Barack Obama, showing a little fight. It is very late in the game for them to start in on this (frankly, this sort of thing should have been said on January 20, 2009), but it should prove utterly devastating. If (and because it’s a big if) IF they stick to it. For decades. Win or lose. Year after year after poisonous year. Because that is what it is going to take. Repeating this every time a microphone is turned on. Every time.