Any thoughts on the tax bill?

Obama promised to stick it to the rich, and he didn't. Pelosi in 2012!

While I'm usually in agreement with lower taxes, I can't understand why they decided to lower SS withholding. I don't think the small difference in paycheck size will matter to most people, and it's going to put a further strain on SS, which is already in dire straits.

SS was always a scam, every penny put into it is stolen from us to pay for you old people who ruined America.

YDN- Hey, I'm delighted we have ruined it for you. You're too cowardly to fight for your country, whine like little bitches when you have to do a days work and know nothing about your country, national or world economics and life in general.

We have raised a nation of girly boys - you have a lot of company. Now go back to feeding at your mommy's breast. Little whiner.

There are strong arguments pro and con, no one knows for sure how it will in fact workout, and the cuts may work out badly (or positively), but what I can't bear is the political doublespeak about it. The Pelosi doublespeak is that the extension of tax cuts:

1. Is "welfare to the rich"--No, it is not "welfare" to let people keep more of the money they earned, it is "welfare" when you give that money to people who did not work for it (I am not saying welfare is bad, just stop the doublespeak).

2. The tax cuts are going to have to be "be paid for by our grandchildren"--No, people don't "pay for" tax cuts, they have to pay for the federal programs that the tax revenues otherwise would have paid for, it is those expenditures that the grandkids will have to pay for if they are not cut.

3. The tax cuts should not be made unless they are "funded"--Again, tax reductions are not an expendture,you don't "fund" tax cuts, you have to fund the federal programs taxes support.

The greedy rich get everything they want yet again.

What a surprise.

The SS w/holding tax cut is one more attack on the SS system. The greedy rich want it all and to leave nothing for us.

Obama. Meet the new boss.

OldXCguy wrote:

While I'm usually in agreement with lower taxes, I can't understand why they decided to lower SS withholding. I don't think the small difference in paycheck size will matter to most people, and it's going to put a further strain on SS, which is already in dire straits.

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Actually, SS has paid every single penny of every single benefit for over 75 years and is projected to be solvent without change for decades. This is an attempt to worsen it's financial situation as a prelude to taking this away.

This SS wrinkle puts some more money in everyone's paycheck for a year but sets almost everyone up for a 2% pay cut the next year.

In a year from now they will be going to battle to extend this cut and borrow more money for SS funding.

Similar thing in two years with the tax rates.

I think we have learned that once you put a rate cut in it is hard to take it back.

CousinB wrote:

OldXCguy wrote:

While I'm usually in agreement with lower taxes, I can't understand why they decided to lower SS withholding. I don't think the small difference in paycheck size will matter to most people, and it's going to put a further strain on SS, which is already in dire straits.

.

Actually, SS has paid every single penny of every single benefit for over 75 years and is projected to be solvent without change for decades. This is an attempt to worsen it's financial situation as a prelude to taking this away.

Social Security is already insolvent.

"Social Security is projected to pay out more than the $41 billion it is expected to take in this year in payroll taxes, the trustees disclosed." Kenneth R. Bazinet. Social Security to pay out more than it takes in for first time ever.

(accessed December 17, 2010).

Further, the Social Security trust fund is not funded with real assets. It is funded with special, non-marketable treasury bonds that due to misleading accounting methods, do not count against the national debt. For example, assume the trustee has a $100 billion shortfall and needs $100 billion to pay the SS deficit one year. The trustee submits $100B in bonds to the government. The government must raise $100 billion to give to the SS trust fund. Unless the federal budget is running a surplus - highly unlikely - the government will have to issue $100B in new treasury bonds to raise the funds. The net effect would be to raise the national debt by $100B.

Now, assume that the SS trust fund has zero assets. In order to pay the $100 billion shortfall, the government would have to issue $100B in new treasury bonds. The net effect would raise the national debt by $100B. Thus, the results are EXACTLY THE SAME whether the trust fund has assets or has zero assets.

Hey, fisky, you quoted the NY Daily News. That's a rag, bro. You need a real source.

I wanted to re-post this since it is the most sensible, and simple, explanation I have seen about the tax cuts.

People seem to forget that the amount collected in taxes does not cause a deficit, it is the amount of spending.

X-Runner wrote:

I didn't notice any threads on this.

So everything pretty much stays the same for now.

Tax rates stay the same.

Making work pay credit is gone.

SS withholding goes from 6.2% to 4.2% for one year.

1) I don't mind paying taxes, and I wouldn't mind if my taxes were raised a bit even...takes such a SMALL sacrifice to make up for a little increase in taxes...big deal.

2) What I DO mind though is inefficient government, BUT I recognize government (US Federal Government) will be inefficient no matter who is in charge. I would like to see it be a little better though if not a lot better.

3) While I do believe the current tax structure is unfairly in favor of the wealthy, I don't blame Obama for not pushing harder to remove the tax break for the wealthier Americans. He said he would work for bipartisan solutions, and I voted for him, so here he's done this. Even though he WANTED to remove those breaks for the wealthy, it should be understood that sometimes compromises have to occur.

The 2% tax cut is pretty big (~1000 for the average american making 50k a year) and supposedly SS is going to get the money from the general fund.The trust fund assets are as real as any treasury bond. And yes it is going to be a total bitch to pay back all those trillions. But that isn't a SS problem. That is a problem with the rest of the government who wanted both low taxes and high spending

The bill reflects several things:

-Americans want first class services, but low taxes

-The Democrats stink at messaging. This may be because they are less willing to openly lie (see Bachmann, M), but the fact is that most people believe that those wealthy enough to shoulder more of the burden should, but yet the Dems could not convert this majority opinion into a legislative win.

-Related to point 1: The age of sacrifice for the country is pretty much dead. The current wars are the only ones in which we have met the increased costs by cutting taxes. It used to be assumed that while our soldiers were being shot at for us, we would all chip in and accept a small financial hit. That spirit is dead.

-Finally, this bill just shows that people are too busy sucking in what is spewed by talking heads to recognize a simple truth: when something isn't working, try something else. These current tax brackets were enacted in 2001-3. Since then we've had 7-8 years where growth has been platry, real buying power of average households has declined, and at the end, the great recession. So the solution is, of course, to keep these wonderful cuts going. Strange.

As a liberal, but as one who also sees the problems our current spending/funding problems have gotten us (i.e., social security problems rapidly approaching, health care costs preparing to cream us, and a huge deficit), here are things I think are reasonable, and perhaps even agreeable to people on both sides of the fence:

-Get rid of the cap on SS taxes. I like that come August each year, my paycheck goes up several hundred dollars because I've hit the ceiling of ~$108,000, but frankly I can live without it.

-Raise the age for social security benefits. Age 65 is a relic from the days of Otto Von Bismarck, when life-expectancy was not much over 65. Current US life expectancy is in the high 70's, in countries with real health systems it is in the low 80's, so raise the age limit. People can retire early if they like, but they have to plan for those years through their own savings.

-Health cost containment. I'm a physician, and the current model of medical re-imbursement is killing us financially. Fee-for-service rewards MDs who do things, in particular procedures. This undervalues thought heavy things like: health counseling, smoking cessation, encouraging exercise, weight loss, pre-natal care. In all cases, freezing a few warts (any middle-schooler can do that) is reimbursed at a higher rate then thinking and talking. I always think it is sad/hilarious that when I see a patient with HIV, my 30 minute discussion on the importance of life-sustaining meds is rewarded less than a few seconds worth of spraying liquid nitrogen on some warts, which have no real health consequences.

-Cut defense spending. Even a tiny cut of that huge amount is real money.

Those 4 things would not fix all our problems, but they would make big dents in the deficit, in the SS and medicare problems, etc.

But, none will come to be, so the problems will grow, and the solutions in 2, 5, or 10 years will be even harder to swallow.

OK. A tax cut is not an expense.

But lack of revenue does cause a deficit.

Deficits can be tempered by growth.

Solid future revenue is needed.

Higher tax rates and/or a good pick up in GDP to create tax revenue would work. People making more taxable income on average is the key.

I'm not debating the method right now.

I just know tax revenue must increase.

Does anyone think it is OK for tax revenue to stay flat forever?

Spending doesn't cause deficits, lack of revenue does. If we want the current level of taxes, we need to cut the government services we get by at least 1/3. if we want the current level of government service we need to increase taxes by 1/3.A huge chunk of current deficit is a result of lowered tax revenue. We are collecting less income tax than 10 years ago but we have almost 10% more people to support. That isn't sustainable.

asdfasdfas wrote:

A huge chunk of current deficit is a result of lowered tax revenue. We are collecting less income tax than 10 years ago but we have almost 10% more people to support. That isn't sustainable.

Last year nearly 50% of Americans paid no taxes, so who's supposed to support all those people? I guess we need to get more money from "The Rich."

I'm sorry Ms. Pelosi but it is a mismatch of spending with revenues causes a deficit. If you can't keep revenues at a high level (which the government, like many businesses, is having trouble doing right now), then you have to cut spending to avoid a deficit. Cutting spending will likely result in some cut in services provided, but they do not always track completely. In this recession, many people have been fired by businesses, and the employees who have been kept on have been required to become more productive (take on many tasks previously performed by others now layed off)--it's happened with my job. As a result, many of the business have not only survived the drop in revenue but have become more profitable (and stock market goes up as a result). That accomplished, everyone would now like to see the businesses hire back more people (lower unemployment--avoid a "jobless recovery"), but the businesses will only rehire when they think higher revenue levels will soon return (and they eventually should, but no one knows when). Businesses will not hire people back now if the result will be only to increase overhead and lower profits. I'm not saying it's kind, but it's reality.

asdfasdfas wrote:

Spending doesn't cause deficits, lack of revenue does. If we want the current level of taxes, we need to cut the government services we get by at least 1/3. if we want the current level of government service we need to increase taxes by 1/3.

A huge chunk of current deficit is a result of lowered tax revenue. We are collecting less income tax than 10 years ago but we have almost 10% more people to support. That isn't sustainable.

joho wrote:

I wanted to re-post this since it is the most sensible, and simple, explanation I have seen about the tax cuts.

People seem to forget that the amount collected in taxes does not cause a deficit, it is the amount of spending.

I'm assuming you mean they paid no income taxes. They paid sales taxes, gas taxes, real-estate taxes if they own a home, license fees, liquor taxes, tobacco taxes, etc.

The point of exempting the poor from income taxes is that they spend pretty much all they have to survive (and spending it at local businesses) that there is nothing left to send to washington. People somehow think this is a great disincentive to succeed, but I have yet to see someone aspire to be in a low enough income bracket to avoid income taxes.