Obama Jobs Plan To Include $447 Billion In Tax Increases
The "how to pay for it" part of the President's jobs plan seems destined to be rejected by the GOP. Which may be exactly what the President wants.
When he announced that he was sending his jobs bill to Congress today, President Obama said that the other half of the plan, which would pay for the plan and include additional deficit reduction next Monday. Details are already coming out, though, and it looks like he’s proposing something that I can only characterize as a direct confrontation with the GOP:
The White House said Monday that President Obama wants to pay for his $447 billion jobs bill by raising taxes on the wealthy and businesses.
Jack Lew, director of the Office of Management and Budget (OMB), said the tax hikes would pay for Obama’s entire bill, which the administration is sending to Congress Monday evening.
The chief provision announced by Lew would be to limit itemized deductions for individuals who make more than $200,000 a year and families that make more than $250,000, something the Obama administration has previously pushed to do through its budget proposals. Lew told reporters at the White House press briefing that this would raise about $400 billion.
The administration would tax the income investment fund managers make, known as “carried interest,” as regular income instead of as capital gains, which has a low 15 percent tax rate. This is another longstanding administration goal that has been resisted by Wall Street as well as some Democrats.
The administration estimates the capital gains change would provide $18 billion in revenue.
The administration also wants to eliminate tax breaks for the oil-and-gas sector, which would raise $40 billion, the administration said.
Another $3 billion would come from changing the way corporate jets depreciate. With a few other revenue increases, Lew indicated the total measures proposed by the administration would bring in $467 billion, $20 billion more than the cost of the bill.
As one commentator noted already, it seems on the face of it as if the President has just given the Congressional and Senate Republicans a reason to defeat his entire jobs bill that has nothing to do with the actual “jobs” part of the bill. If it’s the opening round of a negotiating position, I suppose it makes sense for the White House to come out strong. If they’re really going for the “all or nothing” approach that has been suggested over the days that have elapsed since the President’s speech, though, this would just seem to confirm my suspicion that this entire jobs “plan” is nothing more than a political maneuver aimed at the 2012 re-elect. The White House knows, from bitter experience, how these tax provisions are likely to be treated on Capitol Hill, and they have to know that any chance that they’d be passed as part of an “all or nothing” jobs bill is essentially zero. In fact, Majority Leader Eric Cantor has already ruled any such possibility out:
In a Capitol Hill news conference this afternoon, House Majority Leader Eric Cantor, R-7th, reiterated his desire to work with the presidenton certain elements of his job package, but added a caveat.
“I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators that we’re actually counting on to reduce unemployment,” Cantor said.
These comments were made before Jack Lew briefed the press on the President’s plan, but I cannot imagine that Cantor would react any differently to this proposal. So, while the possibility of a genuine compromise on the jobs bill was a naive expectation to begin with, this would seem to guarantee that it won’t happen at all. There’s also the problem that many of Obama’s proposals are likely to be opposed by mainline business Republicans as much as the Tea Party crowd. For example, the elimination of “carried interest” is a great concern to real estate and construction groups because of the impact it could have on commercial real estate investment:
The scenario that I have come up with to illustrate the strangeness of this is one that is not entirely unrealistic. Moe, Larry and Curley form a partnership to develop shopping centers with the idea that the centers will be held for a considerable period. They will raise equity and borrow money to accomplish this. They won’t put in much of their own money. They are able to raise equity pretty easily based on their previous track record. The way it is going to work is that Moe will scout out locations, negotiate purchases and arrrange financing. Larry will oversee developing, permitting and construction. Curly will handle operations – hiring the securty guards to chase the mall rats and similar things. After 15 years of this the partnership liquidates and they each get $2,000,000 as a share of the proceeds. I think what the Proposed Code Section says is that Larry gets capital gains treatement and that Moe and Curly do not. Moe and Curly were selecting, acquring and managing specified assets. Larry was not. This is an arguable interpertation. There will be many such arguable interpretations. It may be that if there are enough operations the malls will not be considered “real estate held for rental”. One more thing that will have to be defined.
(…)
I asked someone I knew in a real estate related industry if there was much concern in his industry about the possibility of the attack on the hedge funds harming them. He indicated that the common thought was that it only affected the “big guys”. Someone else told me that there is sentiment among some people in real estate to throw the hedge fund managers under the bus by advocating a more focused solution. Of course that would not raise as much revenue.
If there is such a negative impact on real estate investment, it would in turn impact the still-slow real estate market and the moribund commercial side of the field particularly badly.
There’s another side to this argument, of course. If you look at the polls, you’ll see that the President has public opinion behind him when he talks about increasing taxes on “the rich.” If that ends up becoming one of their 2012 campaign themes, which it likely will, then this can be seen in the opening shot in that argument. Whatever the case, though, it seems to me that the White House has just added a poison pill to the American Jobs Act that essentially guarantees that it won’t become law. But then, that may be exactly the outcome President Obama’s is hoping for.
Whatever the case, though, it seems to me that the White House has just added a poison pill to the American Jobs Act that essentially guarantees that it won’t become law. But then, that may be exactly the outcome President Obama’s is hoping for.
Or he could be hoping they pass, even if that’s highly doubtful. There is no point in the White House constantly compromising with Republicans, only to have them reject everything after they are on the receiving end of all compromises, giving none themselves. It’s time to play hardball and shoot for something that would actually help rather than give in to all Republican demands and get a crap sandwich in return.
I said that when Obama made his speech. Obama has no intention of wanting anything to be passed. It’s his reelection campaign starting a bit early. Nothing more and nothing less.
-Polaris
Well give the man credit; many of his critics did not think he would be specific about revenue-raisers, but would deflect such a task to a committee or generalities.
I personally believe the stimulus proposal is not worth much. I also don’t think these tax increases are that significant either, but would probably do as much to slow economic activity as the stimulus would increase it. I won’t be upset if it doesn’t pass.
Poison pill?? Maybe for the GOP. Obama will frame this simply and powerfully. He has presented a plan, it is payed for, it provides tax cuts for the middle class and and programs aimed at job creation. If/when the GOP kills it it reinforces the argument that the GOP is clearly on the side of millionares and billionares.
Obama needs to drive that point home, this is the vehicle that will will show that clearly.
And can we stop calling money hoarders “job creators”?
If the GOP doesn’t pass at least a big part of it, the ads write themselves:
“President Obama and the Democrats proposed a jobs bill that would help YOU and those close to you. The Republicans chose to support Big Oil, Hedge Fund Managers, and Real Estate Billionaires instead of the American people. At a time when our citizens want to go back to work, the GOP chose to continue tax breaks for millionaires rather than supporting a program that would create the jobs we so desperately need.”
That message will resonate, especially against a Romney or Perry.
@Brutalfacts: Don’t be too sure. The GOP will simply say that it’s more “Job Killing Taxes” on the businessman for more of the same failed stimulus.
Given the state of the economy, I think it’s actually a fairly effective counter.
-Polaris
Oh, I thought that all of this was “already paid for” according to Obama’s exact words in his speech.
Don’t be too sure. The GOP will simply say that it’s more “Job Killing Taxes” on the businessman for more of the same failed stimulus.
I do very much look forward to the Republican response: “Rich people deserve more money, and the jobless deserve to die. Vote Republican.”
I want to meet all those “millionaires and billionaires” that make $200,000 a year!
I want their secret on how to make loaves into fishes.
Oh, I thought that all of this was “already paid for” according to Obama’s exact words in his speech.
Except the word “already.” Hey, you got two out of three “exact” words right! Not bad for a wingnut.
He did, in his actual exact words, say that the bill “will be paid for.” Several times. But we understand accuracy and honesty are anathema to wingnuts.
@Racehorse:
HE LIES! And Joe Wilson was correct!
@EddieInCA:
Are we sure that the Dems will allow any amending it?
@Polaris: You’re on record claiming the economy is a very important factor in whether or not Obama is re-elected, and you don’t think he actually wants this to pass? At least try and remain consistent between threads.
The funding for this isn’t really a surprise. They weren’t going to finance it with spending cuts or just add it to the deficit, so tax increases it is. Are they picking things that are harder for the GOP to defend in case it doesn’t pass? Absolutely, as they’d be fools if they didn’t given the obstruction they have faced so far.
@mantis: You do realize that the so-called millionaires already pay the lion’s share of the taxes. You do know that fifty percent pay no tax at all and those non-payers are concentrated in the lowe income brackets.
Yet you say the rich should pay “more” so they can pay their “fair share”? Really.
This is what happens when the masses figure out that they can get govt to vote themselves unlimited benefits. It killed the Roman republic as well (see Bread and circuses).
-Polaris
I want to meet all those “millionaires and billionaires” that make $200,000 a year!
It’s hard to understand when you’re IQ is below 80, but the taxes are on income above 200,000/year. That means the first 200K isn’t taxed at that rate, but income above $200k is. So that marginal rate affects everyone making above $200k/year, which includes people making $1 million, or $10 million, or $100 million. So it affects pretty much all the millionaires and billionaires. We have a lot of them here in the US.
The person making $201k per year would only be taxed at the top rate for $1000 in income. The other $200k would be taxed at a lower rate.
Do you understand now? Perhaps if I used colored blocks with numbers and letters on them?
@Sam:
It’s a lot easier with $200K income, and a 30% savings rate, than with a 3% savings rate.
@mantis: It’s still a lie. There is a big difference between a 200K/year income and a 7 figure income by any stretch.
The tax system is unfair as it is, and your ilk would make it worse.
-Polaris
@Polaris:
What, do physicists skip math these days?
You do know that fifty percent pay no tax at all
If you’re going to lie, you should make it less obvious. Payroll taxes, contributions to Medicare and Social Security, sales taxes, excise taxes on goods and services, etc. Ever hear of those? I guess not.
Yet you say the rich should pay “more” so they can pay their “fair share”?
You say I said that and even put words in quotes, but I wrote no such words. Your lies are so obvious it is embarrassing. Try harder.
This is what happens when the masses figure out that they can get govt to vote themselves unlimited benefits.
Yes, the problems of your imaginary world are caused by imaginary people doing imaginary things. Do let us know if you ever visit reality.
(playing with this calculator, 60K saved annually, 5% return, millionaire in 12 years.)
It’s still a lie. There is a big difference between a 200K/year income and a 7 figure income by any stretch.
You’re the liar here, not me. You don’t even bother to try, either.
Who said those who make $200k/year are all millionaires? No one, that’s who.
@Polaris:
This makes no sense. Passing a bill would be seen as a political victory. Lowering unemployment, as this bill surely will do, would increase his chances of reelection, aside from being good for the country. Why on earth would he not want it to pass?
@mantis:
Though we really should expect them to be. It’s a new definition of “wastrel,” someone who makes multiples of median family income, and has nothing to show for it.
@john personna:
Though we really should expect them to be. It’s a new definition of “wastrel,” someone who makes multiples of median family income, and has nothing to s how for it.
For some maybe, but it depends on the situation. Someone making $200k and living in Manhattan with two kids is not going to have as much to save as much as someone with no kids making $200k in Des Moines.
Plus someone might have just started making $200k+ per year recently. My income has more than doubled in the past four years after finishing grad school, getting a new job and two subsequent promotions. I’m not making nearly enough to worry about top marginal rates, mind you, but I did have a dramatic increase in income in a relatively short period of time. I’m saving, but savings take time.
@mantis:
Sure, but that might be a corner case. I was driving through Arizona or New Mexico and all I could get was a financial help show. There were a series of callers who complained they were making $250K and were not able to save. The host would drill down, and it would turn out they were paying out $40K or $50K on leases for fancy cars, carrying a credit card balance … stuff like that.
@Polaris:
The tax system right now is rigged to the high earners, and I say that as one of the top 1.50%. Last year, I paid an effective Federal tax rate of about 15.54% (after my medical deductions, corporate deductions, mortgage deduction, commissions to my agent, IRA Contribution, payments to my newphew’s college fund, etc). My sister and brother in law, who made 1/6th of what I made, had an effective rate of about 22%, and that’s with two kids.
Additionally, are you even aware of how many households in the USA make over $200K per year? It was less than 2.87% in 2005, and I’m sure it’s less than that now.
So 97.13% of the population won’t be affected by this additional tax and you think it’s a winning argument to be against it?
Bring it on.
@mantis:
BTW, the trick is to grow the lifestyle slower than the income. That’s the only way to maintain high savings rates.
The host would drill down, and it would turn out they were paying out $40K or $50K on leases for fancy cars, carrying a credit card balance … stuff like that.
Oh don’t get me wrong, most people making $200k+/year in this country should have substantial savings, and if they have maintained that income for many years they should be millionaires. I’m just saying that if someone making that much isn’t a millionaire, that doesn’t necessarily mean they are careless with their money.
Personally, I carry no credit balance and am making triple payments on my student loan, which should be entirely gone by the middle of next year. The only interest I’m willing to pay is for financing on my $20k car (which is the height of luxury from my perspective) and the mortgage, and I’m not all that keen on those! I save ~10% of my net (not counting the 401k).
I do have one costly indulgence: skydiving. But if money got tight, that would be the first thing to go.
BTW, the trick is to grow the lifestyle slower than the income. That’s the only way to maintain high savings rates.
Indeed.
I’m fine with those tax increases except, possibly, for the carried interest change. I need to think about its implications for investment more.
I suspect, however and as you suggest, that the House Republicans won’t stand for it.
Doug, what were you saying about your posting policy the other day?
What did it include?
“Comments that contain personal attacks about the post author or other commenters will be deleted.”
I believe that mantis violates that rule with EVERY POST! Either hold to your policy or not!
“You do know that fifty percent pay no tax at all”
As pointed out above, that is just federal income tax. There are still payroll taxes, state taxes, sales tax etc. But, if you want to address the income tax part, you need to do several things. First, you need to address tax expenditures, but the GOP took those off of the table. Next, you need to reduce the size of personal exemptions. The amount of a deduction for a child for someone making $25k needs to be much less than for someone making $100k. This will be difficult to get past the social conservatives. The third primary cause for not paying income tax is the exemption for social security income. This would be tax increase for this group. Are there votes in the GOP for doing this?
Steve
@Dave Schuler:
That was the one Warren Buffet called out, right? As “his” loophole?
This whole back and forth argument about tax brackets and rates shows how flawed the income tax system is. Here is a plan that is fair, more than doubles the tax base, and will pay off the deficit in 3 years:
have a flat tax of 3%: everyone over 18 pays, from minimum wage earners to billionaires.
people who receive welfare, food stamps, housing subsidies, etc. would pay based on benefits
illegal aliens will also pay
only tax deductions are for dependents (limit of 4 children under 18) and charities
no loopholes for anyone – everyone with any kind of income pays
By broadening the tax base, there will be substantial more income to the government, while most people will actually pay less taxes
@Sam:
Try to turn the psycho down to about 3.
@Sam:
I’ve read through the comment thread and I don’t see what Mantis said that bothers you. Could you point me to it? I am not, however, going to approve the reply you posted to him because of the language that was used.
I’ll just remind both of you to be civil. I really don’t want to have to delete stuff of ban people.
@Racehorse:
I’m always stunned that we can all pay less than we do now, and the government will have more. It seems like magic.
I’ll just remind both of you to be civil. I really don’t want to have to delete stuff of ban people.
I’ll just ignore Sam. I have a hard time being civil to people like that.
@Racehorse:
Racehorse, your plan is a sure way to decimate the middle class, drive the poor deeper into poverty, further enrich the already rich, and it would add greatly to the deficit (contrary to your highly unrealistic claim). A perfect Republican proposal!
Let the LIES from the pathological liar flow like water from the clouds.
http://www.youtube.com/watch?v=aufAtuTwKlE&feature=player_embedded
@mantis:
Re “decimate the middle class” that must be tongue in cheek.
He’s going to slash their taxes … and make it up on volume 😉
@john personna:
John, you broke the psycho meter so I can’t turn yours down.
Sam is truly the King of the Comeback.
@Tano:
If you’ve been paying attention, this bill even if passed with no modifications probably won’t make much of a difference in the employment figure becuase it doesn’t target why businesses are not hiring people. (Hint it’s economic uncertainty which is something this administration with it’s antitbusiness stance has made WORSE not better). It might encourage growth (though I doubt even that) but it just will make some underemployed people less underemployed at best.
As for why he wouldn’t want it to pass, I think Obama has decided that the only way he gets reeleelected is the way Truman did in 1949 and that’s by sliming the opposition. I think he’s resigned to a cruddy economy and his making a bill that he knows won’t pass the GOP opposition as his vehicle to blame congress rather than himself on the continued bleak economic picture.
-Polaris
@Sam:
I’ll take this one…
Um.. Sam… We’re not in a recession. We have slow growth, but we’re NOT in a recession.
I know it’s hard for you to understand, but facts are facts.
If you’ve been paying attention, this bill even if passed with no modifications probably won’t make much of a difference in the employment figure becuase it doesn’t target why businesses are not hiring people.
So you say. A lot of people with a lot more knowledge of economics disagree with you. They’re right. You’re not.
. (Hint it’s economic uncertainty which is something this administration with it’s antitbusiness stance has made WORSE not better).
Two claims with absolutely no basis in reality.
I think Obama has decided that the only way he gets reeleelected is the way Truman did in 1949 and that’s by sliming the opposition.
The opposition slime themselves by caring more about defeating the president than trying to work to improve the economy. It’s not the president’s fault their priorities are so out of whack.
@EddieInCA: True but only by the barest technicality. Right now we’ve hit effectively zero growth and if just a couple of estimates from this year get revised down (and not by very much) then we will be officially in a double-dip recession.
Right now we are on the brink and unfortunately there is a very good chance the Euro-crisis will tip us over.
-Polaris
@EddieInCA:
I’m not so sure, EddieInCA. The NBER won’t call the start of a recession until at least 6 months after it’s begun. I think there’s a possibility they’ll mark a recession starting in the second quarter of 2011.
@Polaris: You make no sense. Just because you don’t think it’ll work doesn’t mean the administration thinks it won’t work. In fact, your objection to my list of economists that think it’ll help was nothing more than “they are liberals and I don’t agree”. You implicitly acknowledged the administration economists probably think passing the jobs package would help. Your argument is incoherent at best.
Right now we are on the brink and unfortunately there is a very good chance the
Euro-crisisRepublicans will deliberately tip us over.FTFY
@Sam:
That’s kinda funny, actually 😉
@mantis:
Funny. It’s the BUSINESSES and business leaders that hire the lion’s share of the workforce and if you’ve read what they’ve had to say recently (including many big Obama backers in 2008), they agree with me. They’ve been asked (by various business and economics magazines) if this will make them hire and the answer is a resounding, “No”, but go ahead and pretend a handful of economists know business better than those that run businesses….
It’s very reality based if you’d get out of your bubble and read the financial sections. Businesses aren’t hiring because of economic uncertainty. They are afraid to spend. That should be contested by no one. As for Obama making it worse, job growth came to a screeching half when Obamacare was passed. Why? Because businesses are afraid of that regulatory climate (and with very good reason). Better not to risk money that’s increasingly hard to come by.
The people don’t believe a word Obama says anymore about the economy. I’m not saying that, Rasmussen and Gallup (and most other major polls) are saying that with Obama’s dismal approval rating on economic matters.
-Polais
@David M: Obama’s economists have virtually no experience with the private sector and it shows.
-Polaris
@David M: Do you think it will work noticeably by the election?
Since the spending looks like its planned over an 18 month period (at least the President recently requested his agencies to identify infrastructure spending that could be completed in 18 months), and the tax cuts would similarly be spread out over 16 months from passage.
To me it seems doubtful, particularly to the extent the benefit of a stimulus lies in the secondary transactions: money given to A will benefit the economy when spent on C, who spends it on D . . .
@Polaris:
Not even close. So wrong in fact, it makes me wonder if you’ve ever taken a math class.
“Obama’s economists have virtually no experience with the private sector and it shows.”
Bush’s did, and it shows. Largest banking crisis since 1929.
Steve
@Polaris:
I find it amusing that you are willing to speak for all US businesses because you heard a couple quotes on FOX, and you consider yourself the the voice of “The People” as well, based on, well, nothing. Quite amusing.
Businesses aren’t hiring because of lack of demand, not uncertainty. Demand drives business, not certainty. Nothing is certain about the future. Business owners know this.
Polls show a majority people are displeased with the president’s handling of the economy, not that all people “don’t believe a word Obama says anymore.” And guess who “the people” are even more displeased with regarding the economy, according to the polls? Republicans.
And as David points out, the PPACA did not stop job growth.
You’re 0 for 3. Try harder.
@ Polaris…
Again – you need to check your facts.
:A general comment…amongst all the craziness there seems to be in here today. This whole thing should come as no suprise. Obama proposed the largest deficit reduction plan is history, comprised of roughly 85% cuts/15% revenue increases. He has never walked away from that, even though so-called fiscal conservatives did.
Teavangelicals refuse to even consider revenue increases, in spite of the fact that we’ve had historically low effective tax rates for ten years and they have produced nothing.
In US history we have only once gone 10 years without a recession…and it happened because of the successive Bush 41/Clinton tax increases in the top tax rates. The supply-siders…and keep in mind that every GOP candidate in the last debate was espousing supply-side economics…declared that these increases would destroy economic growth. Suprise…they were dead wrong.
This “no tax increases ever” catechism is killing us. Enough. The facts line up against it. There is absolutely nothing to support the position. Period.
Now – the so-called Republicans can choose to focus on getting Obama out of office…or they can focus on helping the economy and the American people. That is the choice Obama has left them with.
Meep-f’ing-meep.
@PD Shaw: As to whether it will actually work, I’m not sure. I think the administration is correct to be worried about economic growth next year. The economy has barely been stumbling along for a while now and I think there’s a good chance of negative GDP growth for parts of next year without this. I don’t know this will do much more than keep things from getting worse than they are right now though. It’s still something though, so at least the administration is trying.
@Polaris:
I wonder how you could be so sure it would help growth and the underemployed, but none of the unemployed … but I don’t think I’ll ask.
I worry that I might get another postmodernist paragraph like that one again.
@David M:
PD said “noticeably” work, but it’s worse than that. Stimulus is judged on whether it “unequivocally” worked. An impossible burden, which is kinda sad, because programs which are merely “good” can’t make that grade.
Of course it was a cheap, cynical, political ploy. That is all Obama does, and the only thing he does well, I might add. Throw in a complacent and supportive media, a progressive constituency tip-toeing towards a final death rattle and hoping for a Hail Mary, a dash or two of racism accusations, some faux-populism, and a couple of dollops of class warfare, and voila, JOBS BILL!
@ Tom Mathers…
Getting OBL was a cheap, cynical, political ploy?
Gee – why didn’t W think of it?
Damn, you guys crack me up.
@john personna: Well that’s the rub, isn’t it. We can pursue fiscal policies to subsidize the wealthy, and no evidence of their efficacy is required for some people, because the wealthy are “job creators”. In fact no amount of data to the contrary will shake the belief of some people that helping the wealthy creates jobs, even after thirty years of the same policies coupled with the economic decline of the middle class.
Yet if stimulus fails to work perfectly those same people insist we must never try it again. The goalposts have been moved so far it’s literally impossible for policies which will actually help the economy to get a fair shot.
@Doug:
I think that Obama, and a lot of other people including me, hopes that his proposed bill gets to become a law. I think he believes that it’s a lot better way to fund the bill than to further cut down spending.
I seriously doubt that he hopes for it to fail. I think he believes passing the bill would be a lot better for his chances in 2012 than whatever he would get from the “poison pill” or a watered-down bill for that matter.
Remember, gang, the Resident saying “Pass This Bill” so many times….. well, it seems the bill didn’t exist as such, yet. Nobody should be shocked by the content of the bill now that it actually exists.More of what hasn’t worked before. Go on with your lives, citizen. Nothing to see here.
Or the way that Bush was “reeleelected” in 2004…hey, it worked for both Truman and Bush…speaking of sliming, I notice that you still haven’t corrected your lie about 50% of the people paying no tax at all…
@EddieInCA:
And, the GOP can write their own ads, dealing with what the democatic senate wouldn’t address:
@john personna:
That sounds about right. A while back an escrow office shared that so many of her clients had tendancies to create a higher and more expensive lifestyle for themselves, which they would then have to struggle with in order to financially keep it together. People often have difficulties keeping within their limits.
@Racehorse:
On it’s face value that seems like a tax plan deserving second looks.
@mantis: Oh for God’s sake, you knew he was talking about Federal Income taxes, not all the other crap! And it’s not the other taxes that Obama is talking about raising. It’s the Federal Income Tax, and the Federal Income Tax only.
And yes, it is a problem when almost half the country doesn’t contribute to the common good of the country. Everyone should pay something, even if it was just a nominal amount.
@EddieInCA:
I call bullshit on your claims. To be able to deduct a penny for medical expenses, your out-of-pocket had to exceed 7.5% of your AGI and then only that portion of the expenses that exceeded 7.5% is deductible. To do that, you had to be really sick and extremely underinsured. I’d also love to know how you take a “corporate deduction” on personal income taxes. Add to that the claim that you were able to deduct a contribution to a nephew’s college fund – sorry, it doesn’t work that way. At apporximately $155K joint income, deductions and credits for college tuition start to phase out and are completely phased out long before you get to $250K in AGI.
That just touches on a small portion of your false claims. It’s not worth the effort to debunk the rest of the crappola you claimed.
@jan: I’m really not sure where you copied that list from but I am very thankful none of it will pass.
H.R. 872, the Reducing Regulatory Burdens Act, otherwise known as “the GOP wants more pesticides in rivers”
H.R. 910, the Energy Tax Prevention Act, part of the continuing GOP war on science
HR 1229, 1230 and 1231 could collectively be known as the “let’s not change anything after BP” act
H.J.Res. 37, a resolution against net neutrality. WTF?
H.R. 2021, the Jobs and Energy Permitting Act, another cheer for more pollution during oil drilling
Seriously, this is a jobs program?
@Polaris:
Even before Obama’s Job’s speech, pundits were wondering if he would present a bill that was workable, or one that would be more in the realm of aiding and abetting his re-election chances, by being confrontational with the republicans. I would say the latter is what happened.
Consequently, I agree that Obama didn’t necessarily structure this particular Jobs Act to be a genuine helpmate in creating more jobs, as much as he did to being one appealing to his base, taunting his republican opponents to pass it, knowing full well there would be lots of partisan push-back in doing so, thus giving him a campaign strategy to paint the GOP further as the “Party of No.”
@Hey Norm:
In this November 2009 Forbes piece, the administrations, between 1900 and 2009, were compared, as to the number of people with private sector experience appointed to cabinet positions in administrations from Teddy Roosevelt through Obama. Obama had the lowest number with private sector experience of any Democratic or Republican administration.
This paucity of private sector experience was augmented in another article written in January 2010, suggesting that:
“By broadening the tax base, there will be substantial more income to the government, while most people will actually pay less taxes.”
Do you have details for this? It does not sound mathematically possible. People forget how our income has shifted in the past 30 years. The bottom half of the income distribution makes so little compared with the top that you need pretty high tax rates to get significant revenue from them.
Steve
@David M:
Decreasing regulations, lifting bans on oil drilling would free up business constraints, putting more people back to work, very much like loosening a tourniquet allows more blood flow and oxygen to tissues.
So, yes it’s legislation helping job growth.
Oh for God’s sake, you knew he was talking about Federal Income taxes, not all the other crap!
Did I? How can you say that? Polaris wrote, quite clearly, “fifty percent pay no tax at all.” I know wingnuts expect you to always ignore what they actually say, and instead intuit what they really mean, but I don’t play that game.
And it’s not the other taxes that Obama is talking about raising. It’s the Federal Income Tax, and the Federal Income Tax only.
Really? How interesting. Capping deductions on high income does effectively equal an income tax increase, yes, but there are other taxes and modifications being proposed by the president. Reading helps. You should try it.
And yes, it is a problem when almost half the country doesn’t contribute to the common good of the country. Everyone should pay something, even if it was just a nominal amount.
I love how you acknowledge the “50% pay no taxes” assertion is false, but then go ahead and repeat it immediately afterwards. Your equating payment the federal income tax to “contributing to the common good of the country” is a disgusting, idiotic insult to the many firefighters, police, members of the armed services, health care professionals, teachers, and many many more people with incomes in the bottom 50% who don’t pay federal income tax. Brave of you to claim they do not contribute to the common good. You sicken me. You have no concept of what is good for this country.
“Details are already coming out, though, and it looks like he’s proposing something that I can only characterize as a direct confrontation with the GOP”
No!! Yer shit’n me.
A flat tax of 3%? That’s more like a tax plan deserving second guffaws…
Oh for God’s sake, than Polaris should have written that!
Psst, here’s a little hint, sweetie, that half of the country does contribute to the common good of the country and most people do pay something…
As the resident private equity guy I’d way in on carried interest taxation………………..’cept I think Dave, Jan, Eric and Polaris might be the only ones to get it.
Think about how sad that is!
@jan: “Decreasing regulations, lifting bans on oil drilling would free up business constraints, putting more people back to work, very much like loosening a tourniquet allows more blood flow and oxygen to tissues.”
And here we get a great illustration of the fundamental problem with conservative economic thinking. This analogy only make a lick of sense if you believe the tourniquet was applied for absolutely no reason whatsoever. Once you get down to it, conservatives have faith in this deregulated, small government utopia that has never existed anywhere, especially not in the United States. In some ways, it makes right wingers even stupider than communists, who at least had the brains to put their utopia at some undetermined point in the future. Conservative economics doesn’t claim to be working toward some perfection that will come to be. They claim to be restoring perfection that has provably and demonstrably never been.
Mike
@Moderate Mom:
1. I had a very expensive knee surgery ($55K, including the hospital stay due to a horrible infection). My insurance only covered a very small part of it. And that didn’t include the rehab, which put me WAY, WAY WAY over 7.5. More like 20%.
2. I own real estate. For liability reasons, I own it all in an S-Corporation. That real estate took a substantial loss in 2010 when we sold two properties. This loss allowed me to take a deduction on my personal income tax.
3. Lastly, my two nephews attend a religious school (Catholic, actually). I pay their tuition (and a bit more) as a “contribution” to the church. That makes the entire $30,000+ tax deductible.
As I said, the system is rigged to those who have money.
So I call bullshit on your claim of bullshit.
The whole thread has been sad. I believe that one of the benefits that Al Gore attributed to the growth of the Blogosphere was that the way we got news and our ability to understand and react to it would improve. Instead, we ended up with GIGO.
@jan: Once again you take an opinion piece and present it here as if it’s supposed to be fact. Either you are incapable of understanding the word “commentary” in big black letters on top of the piece or you’re just a liar.
@An Interested Party: I’d like to know what Jan thinks she contributes to the common good.
@David M: ‘
Actually I am dead right and your own source shows it. Job Growth was increasing (that’s second dervative to you math types) until Obamacare was passed and then it came to a screeching halt, and with it the recovery.
Your own source backs this.
-Polaris
@Polaris: It’s a meaningless graph that proves nothing. People that understand the math and still repeat it are not being honest, and are intentionally trying to mislead and deceive others.
Jan has already gone into a lot of detail about how special she really is. Start paying attention.
Job Growth (and GDP growth) was increasing before Obamacare was passed and stopped doing so afterwards. That along with the complaints business leaders (including former Obama supporters) are having about increased regulation and this administrations unfriendly stance towards business tells me it does have meaning.
You don’t get to pick and choose what’s meaningful and what’s not.
-Polaris
@Moderate Mom:
Nice post. You seem to have a background in accounting.
@anjin-san:
Why, thank you anjin!
P.S. I know you don’t mean it…
How was your Obama meeting the other night?
@Polaris: Unfortunately, reality does show that it’s not meaningful, and shame on you and anyone else that pushes this lie. For that graph to mean what you claim, you would have to be able to show why you think the economy should have started adding more than 400k jobs per month when it never has historically come close to sustaining that rate. Once the number of jobs changed to be positive, the rate of change was expected to slow down.
Oh, so the fact that job growth stopped increasing when Obamacare was passed was a complete coincidence then? Same with GDP growth? Even though if you read forbes and ibd, the actual people that run businesses will tell you that the regulatory climate (read Obamacare) is one reason they are not doing capital investment (read jobs)?
You go right on thinking that….
-Polaris
“lifting bans on oil drilling would free up business constraints,”
We currently have a record number of oil rigs drilling.
Steve
Moderate Mom: I get a very nice medical tax deduction despite having expenses well under the 7.5% mark because my company runs a… ummm.. I forget what it’s called, but basically I can have at least $2500 withheld before taxes and use it for medical bills like my daughter’s braces. That’s hundred’s of dollars in my pocket. When my kids were little, I could do the same thing for my child care costs. It’s not available to anyone unless their company runs the program. Why? Because conservatives believe the government should not be involved in such things, only private companies. So my company wastes time and resources managing these programs as a perk. It’s a stupid, wasteful system that is nothing but a distraction and a pain to administer.
@Polaris: No, it wasn’t a coincidence, it was completely expected. Job growth was not going to go over +400k, so yes, once it was at +229k in April, the rate of growth was going to slow. That’s why those graphs don’t show anything. (They do say something about anyone that takes them seriously.)
You honestly believe the months after that would have been +295k, +360k, +425k, +490k, etc. if the PPACA was not passed? That is what you are claiming.
@steve: Sure, but we don’t have enough refineries to process that crude. That is where the real bottleneck is and frankly the misguided green movement gets much of the blame. It would actually be better to build new refineries than try to keep on repairing ones decades old, but no….can’t have that…..NIMBY.
-Polaris
@David M: The rate of increase might have slowed but basically yes. I do think that the upward curve would have continued into a conventional recovery.
Now? Job growth has stalled to a complete halt and I do think Obamacare is a large part of why.
-Polaris
Job growth has stalled to a complete halt and I do think Obamacare is a large part of why.
Based on absolutely nothing.
@mantis: Sure since the actual business leaders that DO the hiring know absolutely nothing about job growth. Othetr than that, sure it’s based on “nothing”.
-Polaris
@Polaris: Now it’s “might have slowed”? There’s no question it would have slowed in a conventional recovery. Whatever, you’re clearly unable to come to terms with being suckered by the pretty graph from Heritage. And suckered is the right description, as there are plenty of reasons growth hasn’t been that good over the last year, but starting the discussion at the PPACA is silly.
@steve:
Here is a WSJ article posted just today detailing Canada’s oil sands production and how it has stimulated it’s job market.
Polaris brought up a good point regarding oil refineries, too. The last one built was over 30 years ago! And, it takes something like 800 permits to even think about getting another on line. Our regulations clog our ability to grow.
The problem is the Supply Side/Trickle Down scam. It’s never worked as advertised and the last big employment boom we had was when Clinton raised taxes. Supply side economics was always a program designed to make the US middle class the US working poor while the top 5% become the US aristocracy. Lowering the capitol gains tax is especially odious primarily rewarding the gamblers on Wall Street who contribute nothing to the economy. When the “job creators'” taxes were reduced by the Bush tax cuts they created no jobs in the US and in fact used much of their new wealth to by exotic financial instruments which in part led to the depression we are in now. The Bush tax cuts created no jobs in the US although they may have created a few in India and China. The few jobs that were created were the result of Alan Greenspan flooding the economy with lots of cheap easy credit and we all know how that ended.
@jan:
Start paying attention, see this: @EddieInCA:
@Ron Beasley:
You’re wrong on this, Ron.
Here’s a piece describing What the ’93 tax increases really did.
It posits that new evidence, published by the IRS, shows that the tax increases only amounted to a third of the revenue anticipated by the Clinton administration. Why this happened is explained as a behavior change by the taxed. Tax payers simply reduced their taxable incomes. President Clinton has since stated that he raised taxes too much.
The same change of behavior would occur should Obama also resort to raising taxes, in a weak economy,in order to leech out more revenue. It would back fire.
Another article written by the Heritage Foundation goes into how tax cuts, not the Clinton Tax Hike, produced the 1990’s boom.
@Scott O.:
Yes, Moderate Mom does seem to have an understanding of accounting. Eddie disagrees with her. So…..?
@jan: Do you have anything that doesn’t come from extreme right wing sources – both the WSJ and the Heritage foundation qualify as such.
If you review income from taxes as a percentage of our GDP since WWII, you find something extraordinary. In spite of the fact that the tax codes and taxation rates varied wildly from a 90% top rate in Eisenhower’s time, to a much lower rate during Reagan’s presidency, the tax revenue as a percentage of GDP is always within 15 to 20%! We are on the low side if it right now simply because so few people are working and thus tax revenue has taken a big hit…but govt spending has kept the GDP up. The average is about 18% (a bit more) [we are currently at a shade more than 15%]
You do realize that almost all the “Progressive” budget plans that involve new taxes (revenue enhancement they call it) call for taxation of GDP rates well above 20% (I’ve seen as high as 25%).
THAT is why increasing taxes will not solve the deficit issue nor raise meaningful new income. No matter how you slice it and no matter what laws you pass, the electorate consents to be taxed at a very narrow range of GDP and if you try to go beyond that, you don’t get the income you think you should “on paper”. Ergo, the best way to increase govt revenue is to increase GDP (i.e. ecnomic growth) and new and higher taxes hinder this.
-Polaris
@Ron Beasley: Not WSJ at least not the news articles. The editorials maybe, but not the actual financial news in WSJ…that actually leans left per Dr. Groseclose.
-Polaris
@Ron Beasley:
I know these articles may not support your sentiments about taxes. However, the WSJ’s information was taken from the IRS. And, Heritage, although it is a conservative organization, was using statistics along with their discourse. Now, you may not agree with their analysis, but their stats back up their analysis.
@jan:
Why do you hate rich people so much?
@Polaris: 3% of GDP is approx $440 billion, almost what one would call meaningful new income. Also, this following quote seems to support the idea the government spending can stimulate the economy:
By that logic, you’re admitting the GOPs planned spending cuts would reduce GDP and Obama’s jobs plan should raise GDP next year. And as you think increasing the GDP is a good goal, sounds like you’d buy into the plan if the letter after the politicians names were switched.
I’m into OHare.
People. The 90’s economy was going nowhere. Then Clinton lowered cap gains taxes. Clue!
Indeed, why can’t we just let the Koch brothers do whatever they want?
More than 60 people died Monday in a densely populated Nairobi slum after an explosion and fire caused by gasoline from a leaking pipe.
At least 116 badly burned people, many of them children, were taken to hospitals. Many were not expected to survive, as medical staff struggled with shortages of blood for transfusions.
http://www.latimes.com/news/nationworld/world/la-fg-kenya-fire-20110913,0,5237204.story?track=rss
David M,
Normally one does not want to do spending cuts in a time of recession. However these are not normal times Thanks to the idiot in the Oval Office and his merry gang in congress for the first two years, our deficit spending is over 100% of our GDP! That is govt spending that even Keynes called irresponsible and unsustainable.
In short, we need to cut spending (esp entitlement spending) because we can’t kick the can down the road any further.
In addiiton, govt spending is probably the least effective way to increase GDP. It’s like eating Sugar instead of something nutritious. Sure it’s calories but it’s empty calories…as FDR himself discovered as far back as 1937 when his new deal govt spending started to fall apart. It was WWII and the buildup to it, that saved him.
Yes, I suppose you could call global war a “sufficient stimulus” to get us out of a depression, but that’s somewhat extreme I think, and I don’t see another WWII that will “save” us this time around.
-Polaris
Edit PS: When you account for all the unfounded liabilities our govt has, 3 trillion is a drop in the bucket.
@ponce: So you want us to cry and endorse bad policy. This is what I mean by having too much empathy.
-Polaris
@Polaris:
The oil companies are not even interested in opening new refineries.
1- they understand peak oil is here soon, and it would be foolish to build a refinery that they can’t keep running long enough to profit from;
2- the artificial scarcity increases their profits in any case.
@Drew:
And do the resulting financial bubbles leave you feeling wealthier, and the country, on the whole, better off than before?
@Xenos: I wouldn’t be too sure.
1. With a high price of oil, there is a natural motive to make a profit, and that means refining oil. Normally you want to refine it as close to your customers as possible, and the US is one of the world’s largest customers.
2. There is also a national security issue. I hope everyone agrees it’s a bad idea for us to depend on unfriendly nations to refine our crude for us.
In short, if it were actually cost effective to build refineries (which it’s not because of the insane regulation around them), we’d actually see more refineries built in the US. I say that because we DO see refineries built outside the US (esp China and the Persian Gulf) which would not be the case if Oil Companies weren’t interested in building them at all.
-Polaris
@Xenos: The cap gains cut was responsible for the housing bubble? Really. That’s new to me. I’d look at Clinton’s botching of the CRA myself along with gross negligence (and refusal to oversee) Fannie and Freddie Mae.
-Polaris
After watching the fringe right freaks applauding the suggestion we should just let sick people die during tonight’s debate, I can’t say I’m not surprised you think we should let the Koch brothers incinerate people if it makes them a profit.
@ponce: After watching the fringe right freaks applauding the suggestion we should just let sick people die during tonight’s debate, I can’t say I’m not surprised you think we should let the Koch brothers incinerate people if it makes them a profit.
I believe that the Kochs give more money to medical research and other non-political causes than politics. However, if you want to talk about a billionaire political activist with some actual experience with incinerating people, might I suggest George Soros?
J.
@Polaris:
It very difficult to pick part the most stunningly naive aspect of this statement. The part that actually believes that environment regulation is the biggest reason refineries are not being built or the idea that oil companies are not bleeding money right now with current oil prices and are desperate to invest to the point where it will bend the retail price of gas down, or the notion that the billions and billions of tax spending and direct subsides to oil producers is still not enough to overcome what few environmental controls that haven’t been gutted already.
@jan- I know what is asserted about oil drilling. However, if you go look directly at the data about the number of oil rigs in operation, you see a different picture.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=e_ertrro_xr0_nus_c&f=m
The increase is almost exponential. I find it hard to reconcile claims of regulations stopping drilling with these kinds of numbers. As to Canada and its jobs, they did not have the banking crisis/mortgage problem that we did. They regulated their banks so that they could not offer risky loans like we did. (Let me know if you want to talk about the Gulf. Good data for their also. Think Petrobras, and, go look at the numbers for Gulf drilling at the same site.)
On refining, that is a classic NIMBY. This is such a problem that maybe the federal government should step in after 30 years and interfere with state and local opposition.
Steve
Polaris,
We currently have a good test of the future of refining. Sunoco has indicated that it will be trying to sell its two remaining refineries in the Philadelphia area, thus leaving the business of refining gasoline.
As the article linked says, “The move is the latest shift in the U.S. refining sector, which has seen a wave of companies disposing of refining assets, selling plants or mothballing them over the past two years as firms reorganize businesses to adjust to changing economics in oil product markets.
U.S. refiners have seen profits squeezed by sluggish demand due to the weaker economy and strong crude oil prices. Sunoco Chief Executive Lynn Elsenhans said the refining segment operated at a loss in eight of the last 10 quarters.
“It is in the best interests of shareholders to exit this business and focus on our profitable retail and logistics businesses,” Elsenhans said in a statement on Tuesday.”
So in other words, the actual companies in the field think the refining business is on the decline, and is operating at a loss.
@Polaris- Kind of wonkish, but Bill Black (criminal finance guy and regulator under Reagan and Bush I) is one of the best looking at the issues surrounding the CRA and the GSE’s . Also, since you claim to have some familiarity with numbers, you should look at the original Pinto/Wallison numbers. You need to be able to explain several things. Why did they leave out ARMs in their analysis. Why do they claim loans are high risk when they have lower than average default rates. Why do the numbers in their set of data run about 10 times higher than anyone else’s, even the right wingers who work for the Fed? Lastly, how did Europe replicate the same exact problem w/o GSEs? (Black is an MMTer if that means anything to you.)
http://neweconomicperspectives.blogspot.com/2011/09/who-put-rot-in-herr-hummlers-wurst.html#more
Steve
@jan: Gosh, Jan, it’s yet another opinion piece you’re claiming is an “article.” One would think a smart woman like you would have learned the difference by now.
@Polaris: A few years back, Shell decided to close one of its refineries in California at a time of high gas prices. Many smaller independent companies wanted to buy the refinery and keep it open, but Shell insisted on shuttering it and tearing it down. Because fewer refineries keeps prices up.
Oh, but Polaris wants us to think that oil companies want to open refineries because it’s in the national interest. Bwah-hah-hah-hah.
@Drew:
Maybe I’m too influenced by the arguments given me by conservatives I meet, but I loved this one … guy said “we need to keep lowering taxes until growth returns.”
Is that what you are suggesting, Drew? That governmfent revenues be independent of spending, and just lowered, ad infinitum?
(Overall this is a really tiring thread, because nowhere in it is a strong case built for “the road taken.” There are claims that changes would be dangerous, but no argument that we are on a right course.)
Oh really? Provide some evidence to go with that suggestion…
@jan: That’s funny Jan. The town I’m living in right now is fighting tooth and nail to keep a petroleum coke fueled power plant from being built here. The water quality here is already terrible and some areas have been evacuated due to contamination from the oil refineries. Despite ruling after ruling against building the plant the company and the state of Texas are proceeding with plans to build the plant. THey have had NO issues getting permits they shouldn’t even be able to have (the air pollution here is near the allowable limit already). So yeah go ahead and pretend that everything would just be perfect in this country of the big bad EPA wasn’t being so mean to big business..
The good side of all of this is that a lot of the die hard Republicans here are starting to re-evaluate their beliefs since this is going to be in their backyard..