Tuesday, April 5, 2011

A challenge from President Obama's favorite conservative

9 comments:

PBM said...

Why don't any of these conservative commentators mention the massive new tax cuts for the rich?!?

There are 3 possible reasons for this:

1. They don't know (highly unlikely)
2. They assume everyone already knows so they aren't worth talking about
3. They know, but will benefit from them/ want the GOP to succeed, and know that such a cut would be deeply unpopular, so want to avoid any mention of them, and hope that the public doesn't notice that part of the plan.

Any other suggestions for why no conservative talking head has mentioned these new tax cuts?

TJE said...

PBM, on what basis do you conclude that plan is massive tax cur for rich? As Brookings notes, the details of tax proposal are not specified:

"What exactly is the tax plan? The budget sets only two targets: The federal government should raise no more than 19 percent of Gross Domestic Product in taxes and other revenues. And the top tax rate for both individuals and corporations should be 25 percent. Beyond that, it is a black box. The fiscal plan says nothing about payroll taxes or estate taxes, and almost nothing about taxes on capital gains and dividends. It calls for repealing or scaling back tax preferences, but does not say which ones or by how much. Watch how the House Ways & Means Committee fills in these extremely controversial blanks."

PBM said...

Alright, well I don't know all the specifics, so I'm going to need Patrick's help but I'll give it a try.

So the tax rate for people making over $250,000 per year or $400,000 for couples, was somewhere around 37% percent in the Clinton years. Then the Bush tax cuts were enacted, putting those rates somewhere between 34% and 35% percent, which for people making $10,000,000 and up is $200,000 dollars back per year and up. (I think the tax rate should be divided at 1, then 10, then 100 million, but that's a different story altogether). So, what Paul Ryan is trying to do is cut that tax rate an extra 10 percent, which would give millionaires and billionaires another couple hundred thousand or couple million to hold on to at the expense of our debt. And, he's doing this at the same time as he dramatically cuts programs that benefit the poor.

Now, it is correct that the tax rate for other income brackets would be capped at 25 percent as well, but that would be a much smaller amount of money to receive back from the government (a couple thousand), and would add less to the deficit than unnecessary hundred thousands and millions towards the rich, who are more likely to save that money than spend it.

So, while the tax picture is supposedly a "black box," a rate of 25% for the richest in our country would still amount to a tax cut about 5 times larger than the Bush ones, which in my view, is totally unacceptable. That doesn't even take into account the tax cuts (estate, capital gains, etc) the GOP could and probably will give the rich once the reach into the black box.

TJE said...

Yes but it also depends on what tax preferences might be eliminated.

PBM said...

I guess we will see when they open up that black box. I can't see the GOP fighting to take any preferences away from the top bracket though.

PBM said...

And I think it would be pretty difficult for the potential elimination of those preference to add up the the large size of the proposed cuts.

Patrick_L said...

I am working on my response, though this discussion seems a little silly to me because I KNOW that YOU (Eismeier) KNOW that Ryan's plan would result in significant tax cuts for the rich. The only question people should be wondering is: just HOW big are those tax breaks for the wealthy?

TJE said...

To borrow a phrase: "We have to see the tax plan before we know what's in it."

Patrick_L said...
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