Is Obama planning on raising taxes by $3tn or more? James Pethokoukis lays it out:
Since Obama already wants to get rid of the income and capital gains tax cuts for wealthier Americans that expire at the end of 2010, clearly what Romer is referring to is the rest of the 2001 and 2003 Bush tax cuts. Letting all the 2001 cuts — rate reductions, child tax credit marriage penalty relief — expire would raise tax revenues by $2.5 trillion through 2019. (These CBO numbers assume no negative economic feedback impact from higher taxes.) And letting the 2003 tax cuts on capital gains and dividends expire would be tantamount to a $350 billion tax increase through 2019. And none of this includes possible plans for a VAT that could raise $400 billion a year more to close the huge projected gap — maybe 7 percentage points — between spending as a percentage of GDP and revenues as a percentage of GDP.
At a time when even economists like Brad DeLong are admitting that the federal government can only do so much, this spend-tax-spend more-tax more style of governing is downright scary.
Deficit reduction is priority one. But you can’t achieve it at the expense of the overall economy. We should stoke the economy, and follow the Gingrich-Clinton model of paying down the debt when times are good, and not the Bush-DeLay model of hiking spending when times are good.
But the idea that the government can simply do more and more and take more and more is unsustainable and is just plain wrong.
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You got all that out of one line from Romer?
Check out Promises #1 and #38. Basically, to keep the income tax cuts for those under $25oK but let them expire on those over $250K. And, to let the capital gains and dividend taxes go back to 20% from 15%.
That is the campaign promise. The tax cuts expire automatically and Dems will have to introduce new tax cuts for the middle class. We’ll see how the legislation turns out.
I have my popcorn ready for watching Repubs filibuster middle-class tax cuts until they get their tax cuts for the rich added to the package.
And does anyone remember why the tax cuts expire instead of being permanent? It’s because Repubs passed the tax cuts in reconciliation. And the longstanding Byrd Rule for reconciliation states that anything that increases the deficit has to be sunset unless it passes by super-majority. And guess what, it turns out the tax cuts did increase the deficit. Nicely done, Sen. Byrd.
To put a finer point on it:
The Byrd Rule was invoked because CBO scored the tax cuts as increasing the deficit. So Repubs were told before they passed the tax cuts that they would increase the deficit. They can’t say they didn’t know. But they passed them anyway. And here we are today. Ready for more tax cuts?
Is there a Republican tax cut proposal being considered right now that I’m unaware of?
And had they not spent so much money and created a new entitlement, the tax cuts would not have added to the deficit. Those tax cuts were good for the revenue stream. The problem during the Bush years was spending, not taxes.
“You got all that out of one line from Romer?”
Actually Pethokoukis did, but you can’t tell me with a straight face that all of that is not on the table.
Is there a Republican tax cut proposal being considered right now that I’m unaware of?
There will have to be a Dem middle-class tax cut bill if Obama plans to keep his pledge. Repubs will stamp their feet and whine about class warfare until their inevitable tax-cuts-for-the-rich amendments are added.
“And had they not spent so much money and created a new entitlement, the tax cuts would not have added to the deficit. Those tax cuts were good for the revenue stream. The problem during the Bush years was spending, not taxes.”
Wow, is that why you were supporting the fiscally-responsible Democrats all those years? You couldn’t possibly have voted for Bush, right?
“Those tax cuts were good for the revenue stream.”
ROFLMAO
Those tax cuts were good for the revenue stream.
Let’s assume for a moment you are correct in this. So what? We have created a large class of people who used to be lower middle class who are now paying virtually no taxes (well, income tax anyway), and poor people who are receiving EITC, and a small class of very very wealthy people who are sopping up all the income and paying most of the taxes. “Good for the revenue stream?” – I don’t think so. Bad for the nation.
The problem during the Bush years was spending, not taxes.”
Guess what, the tax revenue coming from the top 50% was driven by the deficit spending. If you cut the spending, bye-bye revenue.
“Guess what, the tax revenue coming from the top 50% was driven by the deficit spending. If you cut the spending, bye-bye revenue.”
I disagree. I believe the tax revenue came from the growth in the economy due to speculative bubbles built by Fed monetary policy.
a1 — I just noticed that a comment from you from the other day got caught in the spam queue because the filter thought you were a spammer due to your use of the words “prescription,” “generic” and “price.” Pretty doggone funny if you ask me.
That is really funny. I wondered what happened to that comment.
Now the double-dip warnings are starting to come out.
Actually, if you click the Brad DeLong link in my post, he’s saying there’s a small chance of it being worse than that.
What? Me read links? C’mon!
OK, having read that, suddenly I feel like saying, “Yay, double-dip!” Doesn’t seem so ominous anymore, after reading that link.
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