What’s your view of tax cut, jobless benefit compromise?

It looks like a deal is in the works to temporarily extend the Bush-era tax cuts for all income levels, as well as jobless benefits for millions of Americans, Associated Press is reporting.

Some details between the Democrats and Republicans need to be worked out, including how long the tax cuts would be extended for. One report says it will be for two years.

What do you think of this compromise? Should the wealthy be able to keep the lower rate?  Do you think they’ll spend it on creating jobs?

This compromise will obviously raise the federal debt, but it’s meant to reduce some of the pain of prolonged unemployment in this weak economy. Which should take priority right now — helping people or the reducing the debt?

- Henry Unger, The Biz Beat

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30 comments Add your comment

Ace

December 6th, 2010
7:32 am

Do neither! STOP this Madness. SPEND SPEND SPEND Neither side gets it. No to tax breaks, no to 99 weeks unemployment.

Larry Kachimba

December 6th, 2010
7:46 am

Respectable economists believe that the problem with the US economy is the political power that the rich have to continue the wide divergence between the wealth and incomes of the top 1-2% and everyong else. Tax reductions for the rich is one the principal instruments of this policy which is turning the U’S economy into a banana republic.
Republicans simply lie when they say that tax cuts for the rich is good for the economy. It is bad for the economy and places the economic burden on those who can least afford it. Republicans are paid by the rich to get them these tax cuts and will in consequence have even more money to continue payingpoliticians to get even worse policies designed soley to further enrich the rich while impoverising the rest of us.
Unemployment benefits are an entirely separate matter. They are paid by insurance, and are standard policy for stimulating the economy in times of economic downturn which is cuase by the disparity of wealth discussed above. The argument for continuing unemployment benefits is both humanitarian and economic. The case for taxing the rich is to prevent economic stagnation as well as a matter of resisting our current corrupt politics initiated by the Supreme Court’s fatuous decision in 1976 equating money and speech, the evils of which are now reinforced in the Citizens United case.
Tax cuts for the rich is an indicator of the decline of democracy in the decades since 1976, and the extent to which only money is represented in Congress. No representation without taxation. Only the rich should be taxed and the rest of us should join the Real Tea Party of no taxation without representaiton

JG

December 6th, 2010
7:47 am

These proposals are ludicrous. A business/financial institution doesn’t continue to spend as their situation spirals out of control! They tighten their belt and cut spending. If our representatives truely believe spending is the answer, lets double all tax breaks and double all unemployment!

mhpro

December 6th, 2010
7:50 am

I do not feel the wealthy should keep the lower rate. They will NOT spend it on creating jobs. They haven’t yet so why would anyone think they’d start now. Unemployment benefits should be extended. For every dollar that is put into it, it gets circulated at least twice–money into the econmy.

JG

December 6th, 2010
7:51 am

Larry, the top 2% of the weathy Americans already pay >50% of income taxes.

TnGelding

December 6th, 2010
7:59 am

The problem is we’d have this argument again two years down the road. At some point we have to bite the bullet and return the tax rates to realistic levels. The wealthy could get a reduction on their first million bucks of income if the GOP would compromise, but I’m for letting the rates expire for everyone. The deficit is that bad. And you can’t keep extending unemployment benefits forever. Once this issue is settled, one way or the other, corporate America will no longer have an excuse not to start rehiring.

TnGelding

December 6th, 2010
8:03 am

JG

December 6th, 2010
7:51 am

But we’re having to borrow 1/3 of the funds needed to run the government. They can pay what they were before, and so can the rest of us, plus a minimum tax of a dollar a week on those that still wouldn’t be paying anything. And the EITC needs to be eliminated or suspended. As much as I like the concept, we simply can’t afford it anymore, and probably never could. But the entire tax code needs to be scrapped for something simpler and less costly to comply with.

shadow7071

December 6th, 2010
8:23 am

In the AJC this morning we have a story about Tax Breaks, another about the rising price of gasoline caused by the devalued dollar, and this ongoing discussion about extending the tax cuts. Add to these last week’s announcement that unemployment jumped from 9.6 to 9.8 percent. And, that the number of Americans underemployed is 17 percent.

We are in an economic meltdown and all we can talk about is this class warfare stuff. We don’t need to waste one more breath on discussing rich versus middle-class versus poor. We need to be discussing how to scrap this current tax system across the board and replace it with something that will allow us to compete in this global economy and put folks back to work.

Road Scholar

December 6th, 2010
8:40 am

When you are overdrawn on an account, you don’t cut your income for debt payment, AND you cut spending! Until the income tax removes all/most deductions for businesses and the general public, keep the higher rates, esp for over $400K.

I thought that the interest deduction for homes was only applicable for your main house. Last night on the news they stated that one plan being considered was to remove the deduction for any home beyond the initial one and only giving the tax break up to a home valued at a half million. I can live with that!

Finally, while Repubs state that tax cuts create jobs and help the economy, where are the facts? Where are the jobs? This tax cut has been in effect for 10 years, and the job growth? I still want more facts like what is the tax rate in the laws, and what is the effective tax rate ACTUALLY PAID by all income classes. Nobody is using facts, just emotion, which will get us nowhere, or where we don’t want to be!

shadow7071

December 6th, 2010
8:58 am

Imagine the savings if government eliminated the cost of monitoring, managing, reporting, prosecuting, auditing, and constantly updating and changing the current tax system.

RGB

December 6th, 2010
9:02 am

“Finally, while Repubs state that tax cuts create jobs and help the economy, where are the facts?”

ANSWER:

See:

Bush, George Walker.
Reagan, Ronald Wilson.
Laffer, Ph.D, Arthur.
Wanniski, Jude.
Kennedy, John Fitzgerald, et. al.

It has been my pleasure to provide an answer to you this morning.

George Bailey

December 6th, 2010
9:30 am

The mantra up to this point is that businesses will not hire because there is too much “uncertainty” about the tax rate. Fine. Then I will expect hiring across the board to increase ten fold as of January 1, 2011 if the compromise is reached. If hiring remains stagnant after the tax cuts are extended, I will expect the GOP to bring pressure to bear on companies to release the TRILLIONS of dollars they are sitting on to spur hiring, research, expansion etc….. Afterall, once the tax problem is resolved, there should be nothing holding big business or small business back from putting people back top work. Right?

TimInAtl

December 6th, 2010
9:33 am

A progressive flat tax is the answer where your gross income is taxed without deductions.

$0- $30K – No taxes on the first $30K
$30K – $50K taxed at 15%
$50K – $100K taxed at 25%
$100K – $250K taxed at 35%
Over $250K taxed at whatever rate is necessary to balance the federal budget plus pay off 2% of the national debt.

This balances the budget and pays off the debt in 50 years. Don’t give me the garbage about how the wealthy will leave. Let them. It’s not like they’re been creating jobs now with their Bush tax cuts and they’re certainly not going to start creating jobs now. Let the outsourcers move to the places where they’ve outsourced our jobs and enjoy the view of the sweatshops.

TnGelding

December 6th, 2010
9:33 am

Was it the tax cuts or the deficit spending that created the jobs? Reagan and Bush both increased deficit spending considerably. If they had reduced spending I wouldn’t have an argument.

Laffer is a laugher. Ok, let’s return the rates to the Kennedy era.

SonnyFab

December 6th, 2010
9:38 am

Since 1945, the government has taken in revenue which is 17.1% of GDP, and this rate is increasing by .1% per year. The lowest intakes as a percent of GDP were in 1949-1950 and in 2009, when the rate was just under 15%. The highest was 2000, at just over 20%. If you plot the total government revenue as a percent of GDP on the same plot as the years that the US was in recession, you’ll see that a recession followed EVERY peak since WWII in the revenue vs GDP plot. So there are two reasonable conclusions that one can draw: one is that increasing government revenues leads to recession, so clearly increasing government revenue as a percent of GDP is a bad idea now. Alternatively, one can conclude that the government revenue increases when the economy grows and then dips when recession hits, so the only thing the government should do is help the economy grow and ignore tax rates. Either way, the government has shown will take roughly 17% of GDP as revenue, and regardless of what conclusion you draw, we MUST STOP SPENDING.

top 1%

December 6th, 2010
9:40 am

LG, the top 1% of the wealthiest in the US control 38% of the wealth… I’d expect them to pay AT LEAST 38% of the taxes

The big secret no one is addressing is the amount of debt that the states are now shouldering. The Bush push to shrink federal government has saddled states with huge debts. When they start to default over the next 24 months – look out below

ml

December 6th, 2010
10:03 am

at first I thought it was just ignorant or foolish but now after everything that has happened for 30 years watching middle class people vote, support and even be willing to angrily defend the Republican Party it’s the craziest and dumbest thing I’ve ever witnessed. watching Republicans blatantly support rich, the same rich people that have done so much to hurt the middle class is just beyond belief! saying they will NOT help anyone else unless their rich buddies get more than they will ever need in their life time, it just has no logic to it. to watch middle class people that have been trapped into the lie of Reagan Conservatism so much that they can actually see the price on the gas pumps spinning upward and be able to force themselves to ignore what that will further do to damage their family budgets is a level of stupidity and even arrogance that I have never witnessed from anywhere ever. when will this country wake up? when will middle class people stop giving charity to those that don’t need or are undeserving of charity? when will so many middle class people stop enthusiastically volunteering for lobotomies? the Dems suck! but the Republican party is evil and made even more evil by hiding behind the good teachings of Jesus Christ. it is time to stop letting them divide us and time to start getting real about everything. TRICKLE DOWN DOES NOT WORK! surely no one but the bigfoot hunters still believe that hogwash. take the nose ring out that was installed by Republicans that has been used to lead you around and for the first time in over 30 years will you please put America first again!

hsr0601

December 6th, 2010
10:05 am

** How do you pay for tax cuts for the wealthy ?
 
1. First attempt : threatening Social Security and Medicare Cut through the deficit panel.
 
2. Second attempt : holding the desperate Hostage, say, the Ransom.
How long will it take for Obama to learn that we think compromise is a synonym for unconditional surrender, or another Bush-era?
 
** The deal based on the outright lies and supportive Dead Media will lead to another Bush-era & irreversible RECESSION.

 
 
1. The reps uses the recession as an excuse for tax cuts for the wealthy.
 
THIS IS A MIDDLE CLASS RECESSION.
 
2. The Republican Senate minority leader has been arguing that the outcome of the midterm elections confers a mandate on Congress to extend the Bush-era tax cuts.
“There’s bipartisan opposition to raising taxes on anyone at this time.”
 
(a). Only 34 percent of Americans believe that tax cuts ought to be extended for those households making more than $250000 a year, according to a new CNN poll.
 
(b). A recent CBS News poll indicated that Only 26 percent indicated they support extending the tax cuts for all Americans regardless of income level
 
(c). In the AP-CNBC poll, 34 percent favor extending the tax cuts for all Americans.
 
(d). A recent Gallup poll found 40 percent favor maintaining the Bush-era tax cuts for all Americans.
 
3. The reps road the waves of deficit reduction just 2 months ago.
 
Now, 2 months later they are set to increase the deficit and increase the governments debt ceiling just so they can give themselves and their rich pals more money.
This isn’t what Americans voted for.
 
4. Tax cut for small businesses.
 
A small business bill was blocked for weeks by a republican filibuster in the Senate.
 
5. Tax cut for job creation.
 
(a). There is no evidence that the tax cuts created even a single job.
Back when Bush was pushing his tax cut packages through Congress in 2001 and 2003, supporters said the cuts (which weren’t balanced with spending reductions) would initiate an era in which the American economy would grow so robustly the nation would be running a surplus of more than $5 trillion at the scheduled expiration date. U.S. now runs a deficit of about $1.3 trillion.
In fact, the available evidence is the exact opposite:
Former President Bill Clinton left a record surplus and created 20 million jobs, despite the warning of potential economic disaster over tax increase for the wealthiest.
 
(b). Your Waterloo = our windfall.
Even when the economy was on the cusp of entire collapse just like Lehman Brothers ahead of the roll-out of stimulus package, it was held hostage by Audacity of Nope, and the time was running out.
Power first then said : Nope ! How do we pay for it ?, Just let it go under exactly like Lehman Brothers.
 
6. The GOP along with Big Business bought this past midterm election.
The structure that the last champion is authorized to pick the next match winner .
 
The ruling that allowed Corporate money to back Political Candidates destroyed the very fabric of the Elections and Americans are paying dearly for it.
The incessant barrage of negative campaign ads drove most Americans towards something they knew nothing about, the Republican­/Corporate take-over of the US. Millions upon millions were spent to defeat certain Democrats.
 
7. From my perspective, Communism & extreme Capitalism have one thing in common : Power First, Corruption at the cost of people !

Road Scholar

December 6th, 2010
10:18 am

Sorry RGB, these names aren’t facts! Under reagan, didn’t the size of the government grow? Aswell as the deficit? And back then “it didn’t matter”?

George Bailey

December 6th, 2010
10:23 am

hsr – Why so negative? Don’t you know that when the uncertainty of the taxes issue is resolved, it will be like Christmas year round. Unemployment will immediately drop to 3% because finally businesses will have enough information to promote hiring again. The only thing standing in the way this whole time was Obama, and thanks to the freshly empowered GOP, we’ll finally get out of this recession and put people back to work because taxes are going to stay the same as they have been for the last 10 years. I mean, you can’t seriously expect businesses to run budgetary forcasts, do cost analysis, look at labor models without knowing “exactly” what the tax rate might be in 2011. Gosh man, that would be as foolish as investing in the stock market without knowing “exactly” what the return is going to be. Luckily the GOP has been able to come in and save us all from speculation and worry.:)

al

December 6th, 2010
10:32 am

Stop tax cuts for the rich. Throughout history every time the middle class shrinks or becomes disenfrachized the nation falls. This has been happening for thousands of years. As early as rome this has been documented. I am not against people profiting from their investements, but the pendalum has swung too far towards favoring the rich. The middle class needs a few years of prosperity to get this country back on track. We are the consumers we need to the fund to keep this country running.

U.S. Army Retired

December 6th, 2010
10:44 am

Obama and the democrats need to grow a set and fight back against these idiots. Extending the tax breaks for the rich is going to do nothing for job creation. These tax breaks have been in place for years and where the h e l l are the jobs now? Come on people, pick up the clue phone!
Obama also needs to quit “compromising” with the republicans and make the top 1 or 2% pay more. They have too much money for the higher taxes to even make a difference to them anyway.

Mr. Cool

December 6th, 2010
11:58 am

I recommend that we go to a system where each business, each organization, and each citizen just pay standard taxes rate for every legal/illegal good, transaction, or service purchased in this country. It could be simple jail time or a penalty for anyone who tries to avoiding paying taxes under this method.

A simple government website could be created for everyone to input transaction, goods, and service purchased.

Is this not what the ———- want any way?

Also, we should get rid of the income tax like some ___ have done.

andyZep

December 6th, 2010
5:07 pm

Let the tax Breaks expire and force the Republicans to the table or let them take the hit for being the bad guys. Do you honestly feel like a middle class American who gets hit with a higher tax burden is going to praise Republicans for fighting the good fight and holding out for the wealthy??

ATL Guy

December 7th, 2010
5:37 am

Although I have always voted Democrat, I don’t see why people are complaining about this issue. We had an opportunity to stop the Republicans at the ballot box and instead we rewarded them with more congressional seats and governorships. The President is dealing with political reality here: either he does something he doesn’t want to do or more people will lose their unemployment benefits or see their taxes go up which would be a double whammy to the economy. If you’re upset at the Republicans, you know who to vote for come 2012. But the time for complaining is over; we had an opportunity to kick those guys off of the bus and instead we brought more of them onboard.

HENRY

December 7th, 2010
7:17 am

THE TAX CUTS WILL CERTAINLY ALLOW THE RICH TO PRODUCE MORE JOBS. THEY NOW KNOW WHAT THOSE JOBS WILL COST. THOSE THAT DISAGREE…….TRY GETTING A JOB FROM A POOR PERSON. THE LONGER PEOPLE DRAW UNEMPLOYMENT, THE LONGER THEY WILL NOT WORK AND BE UNEMPLOYED. NOW ISN’T THAT FUNNY. HANDOUTS BRING OUT THE LAZY IN PEOPLE. MAYBE IN TWO YEARS WITH A NEW PRESIDENT, THE TAX CUTS CAN BE MADE PERMANENT.

Tony

December 7th, 2010
7:40 am

I am more upset with the POTUS and the Dems for allowing the republicans to whimp them out. The POTUS has lost my vote because I want a fighter. That he is not!!!! As for the horrible horrible republicans, GOD will deal with you for playing with peoples lives. The Bible speaks of greed and to hold people’s unemployment hostage was just wrong! The Dems may have an identity issue but I would never want to identify with the likes of a republican!

AR

December 7th, 2010
9:49 am

I guess its time to quit expecting Obama to man up. he has finally convinced me to vote republcan. At least they follow through with their promises and don’t quit on the American people. He can rationalize it however he wants to, but the american people are not idiots, the know a wimp when they see one. A former democrat, I will be voting fro anyone other than Obama in 2012.

Oldmansam

December 7th, 2010
9:51 am

If tax cuts for >250K household income create jobs then either 1) those jobs pay about $2000 per year or b) those imncopmes are >>>>>250K for the difference of a few percentage point sto create jobs! I’m sorry we are in the >250K income group and have othing to do with small business, do not employ anyone, and feel the rates should go back UP! My wife and I are willing to do our part. The small business where individual income is large enough that the tax cuts pay for someone;s salary are NOT small businesses!! I would like to see some real DATA to back up that claim (which too many people apparantly accept as fact since it;s on the web and tv) where are THOSE tough questions??

Oldmansam

December 7th, 2010
9:52 am

sorry for the typos above but my fingers don’t work well when they are only partially thawed out….