Monday, August 01, 2011
A short note on the argument over the "Bush tax cuts"
There has been, and will continue to be, an enormous amount of hoo-ha over the relevance of the "Bush tax cuts" to our current fiscal problems. They are indeed relevant, at least in a static model of the economy, to the tune of trillions of dollars over the ten year budget window. However, that part of the tax cuts reserved for the "rich" -- the bit defended by Republicans alone -- are very small beer compared to the total package. See, for instance, this nifty graphic prepared by the Christian Science Monitor during last year's argument over the extension of the cuts, which ultimately passed a Democratic Senate and which President Obama signed in to law.
Point is, if you believe the static model of tax-cutting (a belief that is embedded in virtually all liberal political rhetoric on the subject), then you really need to repeal all of the Bush tax cuts to have a meaningful impact on the budget.
Candidly, I'd support a repeal of all the Bush tax cuts long before I would support soaking me the "rich" alone. If we are going to demotivate people, we might as well get some actual deficit reduction for our trouble.
11 Comments:
By 
, at
Mon Aug 01, 08:22:00 PM:
The Bush tax cuts were progressive; they increased the tax burden on the top earners. But apparently more progressive than Clinton is not progressive enough these days for the Dems.
By , at
Tue Aug 02, 08:44:00 AM:
I really wonder about you and others of the Rich saying "We need to pay more"!
You could tax the rich at 100% and the Democrats will spend it all! They will even think of more stuff to spend on!
What about Earmarks Tigerhawk? How about ending all Earmarks before we end Bush Tax Cuts? How about ending all the Socialist Welfare crap before ending Bush Tax Cuts!
If there were NO Tax cuts even, the Democrats SPEND, SPEND SPEND. The Republicans join in with Earmarks, after Earmarks after Earmarks. Both Parties spend like there is no tomorrow!
What makes you think that ending the Bush Tax Cuts is going to solve the Financial mess of our government? It Ain't! You are just listening to the squeaky wheel!
They are going to burn thru cash like crap thru a goose! It ain't going to stop.It is about Spend Spend spend. They will cook up more stuff to spend on if you give them more money!
Tell, me Tigerhawk with ending the Bush Tax Cuts will Congress pay off the PRINCIPAL of the National Debt with it?
Hell NO!
You are out of your mind.
End Bush Tax Cuts and three years from now they are going to increase the National Debt another 2.4 Trillion dollars!!!! Nothing will change!
Really, you take the cake.
By , at
Tue Aug 02, 10:38:00 AM:
Joseph Farrar has laid it out the newest debacle this voting on the debt ceiling has become.
He writes "They did not trade for "cuts," as you have heard. There are no cuts in the plan. Charitably we could describe what they settled for was reductions in planned increases in spending. But no cuts have been mandated. The federal government will continue, under this plan, to spend more and more and borrow more and more for the next 10 years. Red Ink as far as I can see
He is talking about the complete and utter betrayal of the Republicans in this case. They bent over backwards and gave Obama everything they wanted. There was NOT even a single cut in the plan.
Here is something I did not know that Farrar points out
Amazingly, they even agreed to allow him to raise the debt limit a second time unilaterally – over the objections of Congress.
This is totally scandalous! An absolute betrayal. Farrar went to a lot of effort to stop this. Organizing this and that, he writes in his piece, but it all ended up not only being useless, but even more double worse. Obama got everything he wanted.
What a crok of s...!
With the vote of the NY Senate Republicans and this, just goes to show how worthless it all is.
And with Vox talking here in his comments on Farrar, the demographics of this country do not portend to go well either. It is all gone. This country is Hell. You can read Vox's comments here Scales fall from the eyes of Farrar
I will never vote Republican, Independent or anything anymore. To hell with America.
By , at
Tue Aug 02, 11:19:00 AM:
I'm more concerned with getting the 47% of the taxpayer base that has no federal income tax liabilities to get back on the tax rolls. Everybody should have to pay something in income taxes if they have any income at all.
Without skin in the game, they are gung ho for more government spending, in the hopes that they derive personal benefit.
If they are on the hook for at least some of the taxes, any new spending plan could result in a higher tax bill that they would personally feel.
Let's give the country a proper incentive structure so that the peoples' representatives will think about imposing the tax burden for their latest and greatest spending ideas on the maximum number of potential voters.
By 
Tim Abbott, at
Tue Aug 02, 01:52:00 PM:
The Bush Tax Cuts included conservation tax incentives in the Pension Reform Act of 2006 that have been extended in subsequent years and are extremely popular with land trusts as well as landowners who voluntarily place permanent conservation easements on their land with the potential to realize a substantial reduction in federal income tax liability. These incentives have doubled the rate of land protection in some parts of the country, saving family farms along with the views of the wealthy and having tangible public benefits as well as positive impacts on local economies. They have strong, bipartisan support and in the blue section of the graph.
By , at
Tue Aug 02, 02:44:00 PM:
There's a lot to still digest over the outcome of Debt Ceiling Chicken, but this may be a important point: The one-year FICA payroll tax holiday will end this December. So there will be a tax increase at the beginning of the year, which will be unevenly felt. It's about $120 billion a year.
That may not seem like a lot, but we're only actually cutting spending by $21 billion in 2012, with promises to do much more later. So Congress just voted to make the federal government $100 billion bigger in 2012, mostly through a regressive tax increase.
If the Republicans don't find a way to spin this, you can bet Obama will.
By , at
Tue Aug 02, 03:25:00 PM:
WLW,
Obviously you have strong feelings on this matter. Also, just as obviously, you haven't looked around the world lately. You may think that this country should be better, but there aren't many better places around the world. Especially with respect to taxes.
I should know, I just got back from living in London for the last 2 years. The taxes in the US are still lower than over there.
If you think the taxes in the US are so bad, why don't you move over there so you can see how it feels to pay a 50% income taxe and 20% sales tax.
By , at
Wed Aug 03, 08:06:00 AM:
WLW, you have somehow managed to completely misunderstand Tigerhawk's position.
He isn't saying 'tax the rich' or 'tax me more.' And he's not saying we should repeal the Bush tax cuts. He's addressing an argument some make for their repeal, not making that argument himself.
I'm pleased to say, though, that we do agree on one thing: You shouldn't vote. At least, not until you calm down enough to bring your reading comprehension skills back up to average.
By , at
Wed Aug 03, 11:03:00 AM:
Tom, Tigerhawk ends his post this way
Candidly, I'd support a repeal of all the Bush tax cuts long before I would support soaking me the "rich" alone.
I read this blog daily. At other posts, he has specifically said, he is 'ok' with ending the Bush Tax cuts. He has said this two previous times.
By TigerHawk, at
Wed Aug 03, 04:10:00 PM:
My first choice, in a world where I get everything I want, is a massive reduction in the size of government, including particularly demographically unsustainable entitlements that to create long-tail liabilities. Since I do not expect that my choices can ever garner the votes necessary to prevail unmodified or without compromise, the next question is what am I willing to give up. Well, if the only want to get a big reduction in entitlements is to also submit to higher taxes, I would agree to that trade as long as we also increase the number of actual taxpayers by repealing the 80% or so of the Bush tax cuts that went to the not-rich.
By , at
Thu Aug 04, 08:20:00 AM:
WLW,
Your first reply began with the two lines,
I really wonder about you and others of the Rich saying "We need to pay more"!
You could tax the rich at 100% and the Democrats will spend it all! They will even think of more stuff to spend on!
So I thought that you thought Tigerhawk was all for increasing taxes on the rich alone. As the final line from Tigerhawk you quoted states, he doesn't.
The line itself, 'I would support X long before I would support Y,' doesn't imply that he supports X, just that X is preferable to Y if one had to make the decision.
Anyway, Tigerhawk himself has weighed in on what he thinks, so enough of that.
I do agree with you on something else, though. If we raise taxes, the government will just spend it. Our elected representatives have spent decades proving they can't be trusted with other people's money.
