FOX News reports (yeah, I know) that Pelosi has said she might let all the Bush tax cuts expire if the House Republicans don’t agree to the Obama plan. They say that in the Senate, Democrat Patty Murphy has suggested the same thing.
Obama’s Democratic allies in Congress only want to pass that partial, one-year extension. Republicans only want to pass an extension that continues those rates for everyone. Each side is accusing the other of threatening to trigger tax hikes in 2013.
Right now, both parties want to do the wrong thing. So let’s allow the tick-tocking clock to make the decision for us. Let the damn things expire.
I dearly hope this happens. Letting those cuts expire for everyone – even us little guys – is the best way to bring the deficit under control. We can deal with the tax code and the social security cap later, but for now, letting the taxes revert to 2001 levels might be the least painful way to address our debt.
Now, just to be annoying, Let me add that I actually also believe we should be investing right now in infrastructure – borrowing for that is as cheap as it will ever be.
Let the economists explain if that’s contradictory or not. Borrowing cheaper money today and paying off yesterday’s more expensive debt, which continues compounding at a higher rate, seems to be a good idea.
Meanwhile, let the tax cuts expire. Please.
You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.
Whatever Works 
In general, raising corporate taxes during a recession is stupid. On the other hand, reverting all the personal income taxes to 2001 levels makes sense as those breaks were SUPPOSED to sunset many years ago.
Sadly, the tax package in question is snarled up and nobody in office wants to separate out the significant parts of it correctly so that they can be pragmatically addressed.
Me, I’d lower corporate and capital gains taxes even further but raise personal income taxes back to at least 2001 levels.
And yes, I’m at the income level where that would really nail me since a stable 2nd marriage allowed me to dissolve my overseas accounts.
LikeLike
Something we agree on – let the damn tax cuts expire. I thought they are only income taxes, aren’t they? If they include corporate, I’m of two minds, but certainly that part could be put aside and dealt with as part of overall taax refore – which of course will nevver happen because Congress can nevver get it done.
LikeLike
No, they’re not only income taxes. They smushed a bunch of things together in the original legislation and the personal income taxes are really the least important part.
That’s actually why – I think – there’s so much argument over them.
LikeLike
Ah well. . . . I’d better read a little more I guess. Sigh …
LikeLike
those breaks were SUPPOSED to sunset many years ago.
Well, they were set to expire only because the republicans passed them in reconciliation. They really wanted them to be permanent.
LikeLike
Did they pass the originall tax cuts with reconciliation in ’01 or just use it to prevent expiration?
LikeLike
Then we can set to work instituting a modest income tax here in FL. I’ts long overdue.
LikeLike
Agree. Everything else is just a bandaid.
LikeLike
Letting those cuts expire for everyone – even us little guys – is the best way to bring the deficit under control.
Just a question – No judgement.
In an effort to reduce the deficit, do you insist on raising taxes or would you be happy realizing more tax revenue?
In other words, do you want more tax revenue or do you want higher tax rates?
LikeLike
Honest answer pino – revenue is what we need. It can come from tax code revisions or raising taxes or . . . however we get it of course, taxes are our only source of income, so any fiddling we do will be there.
I DON’T consider letting the tax cuts expire to be a tax increase. Now if we raised them above the pre-Bush level, the 2001 level, that would be raising taxes.
Our congress right now is incapable of addressing anything complex like the tax code itself, and even if they were up to it, nothing’s going to happen in an election year. So I say let the damn things expire and then the 113th Congress damn well better step up to the plate and start doing their jobs.
LikeLike
I truly hope that one side or the other wins overwhelmingly this November . If the Scrooge McDucks win taxes will be cut, the economy will boom and Democrats will scream bloody class warfare murder . If the Bolsheviks win, they will finish what they started in 09, and economic death will be swift and sure . This collective suicide of raising the debt limit every year or so is taking much too long .
LikeLike
Ok….
Lets have a HISTORY LESSON HERE….
for the past almost 4 years we all sit in the theatre and watch the SAME
Performance on the stage in Washington DC….
The same will occur this time coming up….
The media will hype the ABSOLUTE date needed….
Someone will discover that Congress can actually go past that date…
They will…
At the moment the curtain is gonna drop ….
There will be a SURPRISE!
There will of course be COMPROMISE!
I don’t care WHAT Democrats say NOW…
They are NOT gonna leave themselves in a place where the GOP in the House can run on the campaign that Democrats raised middle class tax rates….
NOT GONNA HAPPEN!
Having it happen in 2010 was enough….
KNOW YOUR HISTORY!
LikeLike
james, you mean that our politicians will commit, gasp, POLITICS? Of course they will . . . but like everything else, they’ll deal with it by pushing it down the road yet again.
LikeLike
The Bush “tax cuts” have been in place for so long now they should be considered the “tax rates”. It’s funny how Obama “allowed” the so called Bush “tax cuts” to continue and then claimed it as his tax cuts. Anyway, personally, I don’t care if they expire or not. It’s fine with me either way. However thinking that will solve the problem of or even slow down the deficit is being naive. That isn’t going to happen. Unless spending and waste is brought under control the increased revenue from taxes will simply be absorbed, and that, very quickly.
I find it absurd that people buy into the class warfare tactic of the left. To think for a second there are only rich and poor (1% ers and 99% ers) and nothing in between is ludicrous. Through the eyes of Obama that is what society should look like and that’s why he works so hard to destroy the true middle class.
LikeLike
Steve – let me rebut a few things you said:’
1. Our income tax rates are the lowest they’ve been in 70 years.
2. When we went into WWII, we immediately raised taxes and Americans bought billions of dollars of war bonds. Wheb we went into Afghanistan ad Iraq, we cut taxes. So ’nuff said about that.
3. Solving our debt problem – there is no single solution and no one has evver claimed that it can be solved by taxes or any other thing. Our debt problem will be solved by multiple actions, of which those tax expirations would be one. And by the way, there’s ample evidence that if the tax ccuts were appllied to EVERYONE, that would have enormous impact on our revenue and thus our ability to deal with the debt.
4. no one, again, no one has said that there is nothing in between rich and poor. What is true is that the middle is shrinking and that bodes ill for all of us. And as for that shrinking middle class, that’s been undersway for over 30 years – thru Reagan, Bush I, Clinton, Bush II and Obama. It’s America that’s been doing it to itself, not any president.
LikeLike
Sigh … Moe, you know I love you dear and we disagree on any number of things. Okay, let’s just say the “Bush tax cuts” are extended. Would letting people keep more of their own money, which they will spend on “stuff” help the economy? (isn’t that ridiculous … “letting people keep more of their own money”) Perhaps no one has actually “said” there is only rich and poor, but I spend many hours visiting liberal blogs and that’s the message they hear. It’s always 1%ers and the 99%ers; the haves and the have nots. I visit liberal blogs literally every day and I see the same stuff every day. I’ll buy the point about the shrinking middle class, but from Bush 1 through Obama. Regardless of how the left tries to demean Reagan, he was a pretty damn good president and turned this nation around after the Carter disaster. The debt and the deficit are two different things. Deficit spending and unfunded social programs vs available revenue is crippling the U.S. Give the government more money? Why? I ask you the following question: if you were in debt, would you continue to rack up your credit cards? If you have a certain amount of income would you spend more than you take in? If you did do you think your boss should/would pay you more because you’re irresponsible? Anyway, I gotta go for right now because I’m at work. I’ll be back.
LikeLike
Gotta wonder, with the “deadline” looming, if the lame duck Congress would address some form of tax reform. I know that is a long shot and will also depend on election results. Of course tax reform means lower rates, higher revenues – thus most of us will pay more while thinking believing we got a tax cut.
LikeLike
“Of course tax reform means lower rates, higher revenues ”
Not sure what you mean. Clarify please? 🙂
LikeLike
I like to ask which is more important to a person: a lower tax rate or a lower tax bill? Odd are, rates will go down in tax reform, but because either less of deductible and/or more is taxable, one’s tax bill actually increases. Therefore, as people believe taxes went down, they actually went up …. just like they did for the middle class due to the Reagan Tax Cut.
LikeLike
Ahhh, I getcha! 🙂
LikeLike
BTW – I admire how you calmly respect those who are tightly wrapped within their own box. 🙂
LikeLike
Thank you Frank. I try, but don’t always succeed.
LikeLike