Surprise Surprise...... 2008 Democrats Propose a Ceiling on Bush Tax Cuts - Mercedes-Benz Forum

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post #1 of 32 (permalink) Old 04-21-2007, 09:55 AM Thread Starter
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Surprise Surprise...... 2008 Democrats Propose a Ceiling on Bush Tax Cuts

April 21, 2007

2008 Democrats Propose a Ceiling on Bush Tax Cuts

By EDMUND L. ANDREWS
WASHINGTON, April 20 — Grappling with one of the biggest domestic policy choices that will confront the next administration, the leading Democratic presidential candidates say they would raise a variety of taxes on affluent people but extend President Bush’s tax cuts for middle- and lower-income families.
Virtually all of Mr. Bush’s tax cuts are set to expire at the end of 2010, and the issue of whether to extend some or all of them sharply divides the parties and is a complex one for the Democratic candidates on both political and fiscal policy grounds.
Already, Republicans are signaling that they will attack the Democrats for what they say would be a mammoth tax increase that would threaten the economy and fuel growth in government spending. Democrats say the shift they are advocating would bring more fairness to the tax system and help pay for needed expansions of social programs while helping to keep the budget deficit under control.
Although they have yet to release detailed proposals or to talk about the issue in any depth on the campaign trail, Senators Hillary Rodham Clinton and Barack Obama, and former Senator John Edwards, said through aides that they were backing variants of the same approach, which would result in higher taxes on income, capital gains and stock dividends for upper-income people. All of them, as well Senators Christopher J. Dodd and Joseph R. Biden Jr. and Gov. Bill Richardson, have made clear that they would support keeping in place the tax cuts that have benefited the vast majority of people, roughly speaking households with income less than $200,000 or so. In that way, the Democratic stance would ensure that a substantial portion of one of Mr. Bush’s signature policies would outlast his presidency, even if his party loses the White House.
But Democrats have also signaled that they intend to undo a central principle of the Bush tax cuts — that they should extend to all income levels — by rolling back reductions that have benefited the wealthiest Americans in recent years.
“Yes, we’ll have to raise taxes,” Mr. Edwards declared in February in one of the first statements by a Democratic candidate on the issue.
Democratic strategists said the candidates were all keenly aware that Republicans are eager to attack them over tax increases. Vice President Dick Cheney accused Congressional Democrats last week of already planning “the biggest tax increase in American history.”
“The result would be a staggering tax increase on the middle class, on families and small businesses, and a return of the federal death tax from zero back up to a confiscatory 55 percent,” Mr. Cheney said.
But Democratic campaign officials have not shied away from the conflict, asserting that the Bush tax cuts were tilted in favor the rich and need to be rebalanced.
“Americans know there is a difference between keeping taxes as low as possible on the middle class, and giving away the bank to the wealthiest Americans,” said Bill Burton, a spokesman for Mr. Obama. “If President Bush’s tax cuts are extended, the wealthiest 1 percent will save more than the bottom 80 percent combined, at a cost of $1 trillion over 10 years.”
The Democratic candidates would be trying to recapture a big chunk of the revenues that were allocated to tax cuts in the Bush years. And they would be challenging one of the main arguments offered by conservatives in favor of tax cuts, that reducing rates on upper-income people spurs more investment and job creation.
To keep in place the entire package of Bush tax cuts would cost the government about $1.8 trillion over the next decade, according to Congressional budget analysts, a period when the nation will also begin confronting the costs of an aging population to the Medicare and Social Security systems.
Simply extending Mr. Bush’s tax cuts for families that earn less than $200,000, and most of the reduction in estate taxes on inherited wealth, could cost about $900 billion over the next decade, according to new estimates by the Tax Policy Center, a nonprofit research group whose tax estimates are considered reliable by most analysts.
For people with incomes of more than $200,000 a year, roughly the top 3 percent of earners, the Democratic candidates would essentially revert to the tax regime under President Bill Clinton in the 1990s. The top marginal tax rate would return to 39.6 percent, up from 35 percent currently, for people with taxable incomes of more than $336,550. People with incomes between $200,000 and $336,550 would see their top rate climb to 36 percent from 33 percent today.
Mr. Bush’s signature tax cuts for capital gains and stock dividends would all but disappear, because people earning more than $200,000 receive the vast bulk of such earnings.
None of the Democratic candidates would eliminate the estate tax on inherited wealth, long one of the Republicans’ goals. Under law, the estate tax becomes smaller each year until it disappears in 2010, only to bounce back in full when the tax cut expires at the end of that year.
Several Democratic candidates said they would let the estate tax dwindle to levels set for 2009. At that point, estates worth less than $3.5 million — and less than $7 million if owned by a couple — would be excluded from any tax.
But the candidates have not said how they would reconcile their goal of leaving a portion of the tax cuts in place with the Democratic Party’s professed objective of doing nothing to aggravate the budget deficit. Indeed, the presidential candidates are on a collision course with Congressional Democratic leaders who have adopted rules that require paying for new tax cuts with savings or tax increases elsewhere, a stance that would presumably apply to an extension of the existing tax cuts.
At the same time, leaving even a portion of the Bush tax cuts in place means that the next president and the next Congress would have less money to allocate to spending programs than they would if they allowed all the tax cuts to expire, leaving them with a choice between further increasing the budget deficit or limiting their plans for addressing health care, education, energy and other needs.
Robert Greenstein, director of the Center on Budget and Policy Priorities, a liberal research group, said Mr. Bush had left Democrats in a very difficult position.
“What strikes me now is the degree to which the fairly fiscally irresponsible policies of the last six years have put Democrats in a box,” Mr. Greenstein said. “They’ve got these large tax cuts in place, they have even larger fiscal problems in the coming decades and they have large unmet needs right now, such as 45 million uninsured people. Addressing all three of those things will be very difficult.”
Even preserving just the so-called “middle class” tax cuts could reduce revenues almost $150 billion a year, a bigger cost to the Treasury than the war in Iraq or marquee Democratic initiatives like expanding health care for low-income children.
None of the Democratic candidates has laid out a detailed agenda for Mr. Bush’s tax cuts, but Mr. Edwards, of North Carolina, has been the most explicit. He has said he would not even wait for the tax cuts to expire and would immediately seek to repeal them for everybody earning more than $200,000. He would use the money for his plan to deliver health care to all Americans.
Measured as a share of the gross domestic product, which many economists say is the best gauge for measuring the size of tax cuts and increases, a repeal of all Mr. Bush’s tax cuts would be smaller than tax increases imposed during World War II, the Korean War and the tax increases signed by Mr. Clinton.



2008 Democrats Propose a Ceiling on Bush Tax Cuts - New York Times
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post #2 of 32 (permalink) Old 04-21-2007, 11:57 AM
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I wish that was the only thing the democraps were doing to hurt our country. They have once again put short-term political ambitions ahead of long-term national security and success. From their rogue international mis-adventures designed to make our President and nation look bad, to their taxing economic programs that make a few people feel better at the expense of our national economy, to the feel-good social programs that reinforce the worst in our society at the expense of the national good, etc., etc., etc... Their "success" seems to depend on our nation's failure. It is a sad sad time in our nation's history.

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post #3 of 32 (permalink) Old 04-21-2007, 03:52 PM
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Top 1 % of wage earners pay 37% of all income taxes, bottom 75% pay 15% of all income taxes. Go figure that they got more of a tax cut.

More interesting reading:

The Tax Foundation - Summary of Latest Federal Individual Income Tax Data

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post #4 of 32 (permalink) Old 04-21-2007, 04:32 PM
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I deserve better things from government. I want to take money from rich people (anybody who makes more money than me) and give it to the government so I get have better stuff that I don't have to pay for. Also, I want you to pay for my retirement.

It's only fair. Do it for the children.

B
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post #5 of 32 (permalink) Old 04-21-2007, 04:37 PM
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Quote:
Originally Posted by Botnst
I deserve better things from government. I want to take money from rich people (anybody who makes more money than me) and give it to the government so I get have better stuff that I don't have to pay for. Also, I want you to pay for my retirement.

It's only fair. Do it for the children.

B
That sounds like Hillary, Obama, Al, and the other usual suspects... Have you gone over?

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post #6 of 32 (permalink) Old 04-21-2007, 05:36 PM
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Quote:
Originally Posted by edfreeman
Top 1 % of wage earners pay 37% of all income taxes, bottom 75% pay 15% of all income taxes. Go figure that they got more of a tax cut.

More interesting reading:

The Tax Foundation - Summary of Latest Federal Individual Income Tax Data

You're right, this is wrong. They should be paying 50%.
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post #7 of 32 (permalink) Old 04-21-2007, 05:42 PM
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post #8 of 32 (permalink) Old 04-21-2007, 07:17 PM
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Wonder if those Devil Democrats are going to do anything about that $250Billion annual tax increase Bush levied to pay for the $5Trillion National Debt that he ran up? And that tax is if the rates stay at only about 4% and only includes his part of the debt.

And if ed's figures are correct that means that the 24% at the upper middle class pays 48% of all taxes, and those are the folks that get squeezed by the current Bush plan.

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post #9 of 32 (permalink) Old 04-21-2007, 07:24 PM
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Quote:
Originally Posted by mcbear
Wonder if those Devil Democrats are going to do anything about that $250Billion annual tax increase Bush levied to pay for the $5Trillion National Debt that he ran up? And that tax is if the rates stay at only about 4% and only includes his part of the debt.

And if ed's figures are correct that means that the 24% at the upper middle class pays 48% of all taxes, and those are the folks that get squeezed by the current Bush plan.
And the top 25% pay 85% . . . soooo . . . ?

And, if you read the link, you'll find that block you mentioned did just fine under the tax cut. What I have a distaste for is the manipulation of statistics (namely the ones mentioned in the article) to imply that 1% got more than their share of the tax reduction. You pay less, you get less, pure and simple, and fair.

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post #10 of 32 (permalink) Old 04-21-2007, 07:56 PM
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Originally Posted by edfreeman
And the top 25% pay 85% . . . soooo . . . ?

And, if you read the link, you'll find that block you mentioned did just fine under the tax cut. What I have a distaste for is the manipulation of statistics (namely the ones mentioned in the article) to imply that 1% got more than their share of the tax reduction. You pay less, you get less, pure and simple, and fair.
Understand that I am all for tax cuts. I believe that everyone should have to pay as little as is necessary in taxes to run a fair government.

What I have opposed with this past tax cut is that Bush gave a percentage of people a tax cut, not everyone but some BUT at the same time ran up record deficits. To me that is just piss poor money management. It would be as if you went to your atm every day with your credit card and withdrew $500 [your "tax cut"] yet ignored that you were running up a large credit bill directly associated with your tax cut.

If the tax cut had come without the associated deficit spending I would be fully onboard because the arguments for a tax cut are correct [spurs growth, CAN raise revenue]. It's just that the butcher's bill is due and will need to be paid for the next THREE DECADES to accomodate that little tax cut that only helped some of the people.

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