OMG! It's the Fiscal Cliff!

[tw]

Originally Posted by Lamplighter

That's what Thelma said.

It must be a good thing. She's famous.

[Lamplighter]

OK, I have not thought this through, so maybe someone else can improve on my question...

Elsewhere I posted about a few Republicans changing their attitude
towards Grover Norquist's pledge to never raise taxes.
Those Republicans, and a few others, are saying that they are not willing to raise the tax rates,
but instead want to "raise revenues" by closing loopholes and "capping the deductibles".
One of them said that capping deductions at (maybe) $30K - $40K
might be acceptable, but only if the Democrats would cut entitlements.

So, my question is this:
Why are Republicans pushing the idea of capping deductions ?

My distrustful mind wanders through ideas like these...
If tax rates are generally around 28% on upper levels of taxable income,
a cap at $35K seems as though it would be equivalent to such a deduction on (only) $125K.

Why is that OK with Republicans ?
Is it because it is applied to "earned income",
as opposed not to income from "interest", "capital gains", "return of capital", etc.
Or, are the wealthy looking to remove all foreign income from their taxes completely.

I like xoB's current signature: "Everything is interesting... look closer"

[glatt]

I'm not sure. Maybe the ones changing their positions are not pure evil? Maybe they know we need to put taxes back to where they were. Maybe they figure that by reducing deductions for the rich they can raise taxes without "raising taxes."

Obviously, the devil is in the details.

[classicman]

1) There are only 824,584 tax filers making over $500,000 a year.
2) There are only 2,761,934 tax filers making over 250,000 a year.
Combined that's about 3.5 million taxpayers.
There is NO WAY we can solve anything by addressing only this group of "rich" people.

3) 142,892,051 - Total number of tax returns filed 2010.
Only 84,475,933 - Total number of TAXABLE returns.
Thats is under 60%. Conclusion - Its simple math. The tax revenue base must be broadened. There is no other way.

[piercehawkeye45]

No one is seriously considering solving the deficit problem solely by taxing the rich. I think the "rich pay a little bit more" talk is just a reaction to the general feeling that the rich disproportionally benefit from the current tax code. I understand Republican fear that 'tax the rich' will become a scapegoat solution for future deficit problems and their belief that Obama is leading us towards that possible slippery slope but their current talk is just fueling that populist anger.

Our tax code needs to be simplified and I'm waiting for Republicans to propose a serious plan. A lot of independents and liberals would get behind that.

[DanaC]

Originally Posted by classicman

1) There are only 824,584 tax filers making over $500,000 a year.
2) There are only 2,761,934 tax filers making over 250,000 a year.
Combined that's about 3.5 million taxpayers.
There is NO WAY we can solve anything by addressing only this group of "rich" people.

3) 142,892,051 - Total number of tax returns filed 2010.
Only 84,475,933 - Total number of TAXABLE returns.
Thats is under 60%. Conclusion - Its simple math. The tax revenue base must be broadened. There is no other way.

So what, just leave them paying at the current rate and just increase the burden on everybody earning below that amount?

Just because they cannot be the only solution doesn;t mean they shouldn't be a part of the overall solution. Redressing an imbalance is all that's being asked for.

The wealthy in America pay proportionately less tax than they have ever done. As a group, the highest earners have increased their share of the wealth as well as their wealth in real terms during a period which has seen everybody else's wealth stagnate. They have been the biggest beneficiaries of the financial meltdown and they have continued to reap benefits from the whirlwind that has swept so many of their countrymen to personal ruin.

As a class, the 'job creators' have changed the employment landscape to suit themselves at the cost of millions of lost / outsourced jobs and insecure employment at home.

The people scratching around in the fucking dust, desperate for work and living in temporary accomodation did not create the current economic crisis, they shouldn't be the ones who have to pay for it through the loss of yet more services and assistance and the creeping rise of less direct taxes, whilst the super rich squirrel away their ever-increasing piles of cash into off-shore tax havens, because they're too fucking selfish even to pay the minimal levels of tax currently expected of them.

[classicman]

So what, just leave them paying at the current rate and just increase the burden on everybody earning below that amount?

Did I at ANY POINT say that? EVER?

What I did say was:

Conclusion - Its simple math. The tax revenue base must be broadened. There is no other way.

The only resolution to this problem if for EVERYONE to pay more. One party is implying that "taxing the rich" will solve the problem. MANY believe that. They are incorrect.
Nice rant though.

[DanaC]

No, you didn't. I am sorry I assumed. I think because I see that point made so often by right wing conservative peeps on Fox News as part of a general 'rich people are the real victims of class war' attitude. Usually before some enlightening little segment on how the poor aren't like the real poor of yesteryear.

[classicman]

Thanks, Dana. By the way - I AM the poor.

[DanaC]

That doesn't always stop people making those arguments though :p

[tw]

Originally Posted by DanaC

That doesn't always stop people making those arguments though

We know what works. Put taxes back the way they were in the 1990s. Unfortunately that contradicts pledges made by too many Republicans to Norquist, Limbaugh, et al. What works is evil - because it was done by Clinton.

What worked so well, before tax cuts destroyed jobs, is how we start fixing the economy again. By ignoring ideology preached on Fox News. By using well proven economics.

[classicman]

In your bubble perhaps. There were other factors besides the tax rates which impacted the state of the economy in the 90's.

[tw]

Originally Posted by classicman

In your bubble perhaps.

So we should keep destroying jobs because Eric Cantor says making America fail is good? Patriotic Americans instead restore tax rates that created deficit reductions and more jobs.

George Jr tax cuts destroyed jobs and contributed to record deficits. Only fools still think tax cuts do anything good or useful. The educated can understand why predictions, based in history and economics, were so accurate. Tax cuts that create recesssions were predicted repeatedly in the Cellar including 2001 and 2004. Those predictions were spot on accurate.

Tax cuts were based in lies when implemented. Tax cuts destroy jobs; complete with reasons why tax cuts are destructive.

Money games (ie tax cuts) to make a productive economy only create less jobs. Nothing new: Economics will take revenge. So let's keep the tax cuts and destroy more jobs because extremists do not want to admit their mistake.

[classicman]

sadly, nothing new. Ignoring every other facet doesn't make them go away.

[BigV]

I'm in favor of taxing the rich because that's where the money is.

I heard recently that the 400 richest people in the US have as much wealth as the bottom (economically speaking) 185,000,000. Top four hundred same wealth as the bottom one hundred and eighty five million. You want more filers? What about redistributing the wealth of one of those 400. That translates into 462,500 po' folks.

When I hear the whining about how taxing the rich won't solve things, then I think the same logic applies to the bottom 185 million people too. They have the same amount of money, right? Except when you divide how much they have by the number of people you have to spread it all around to, it gets scraped pretty thinly.

I'm working out the math on the proposed changes to the tax code I've seen put forward by the President. When I have that math, I'll post it here.