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Taxes and fiscal cliff

Races for the Senate, U.S. House, etc. and other issues of national importance.

Re: Taxes and fiscal cliff

Postby fisticuffs » Wed Jan 02, 2013 1:28 pm

My payroll tax increase will directly affect my spending power and ability to save for stuff like college education, home improvements, vacation, etc. That 2% increase comes out of the disposable income bucket for middle income families with kids and out of the essentials bucket for low income families.


It sure will. But I survived in 2008 just fine before this temporary tax break and I'm pretty sure I'll survive now as well. Considering what we were up against it could have been a lot worse than losing a temporary 2% tax cut.
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Re: Taxes and fiscal cliff

Postby jjoyce » Wed Jan 02, 2013 2:14 pm

2013 isn't 2008. Maybe it is, but it's because every year since 2008 has been pretty much without growth.

Read the news, particularly the financial news. Billionaires are cashing in their consumer product stocks (guys like Buffett and Soros). Inflation is on its way. Meanwhile, we're staring at a tax increase coupled with a significant decline in social services.

Those interested in keeping score (cable news, talk radio, this forum) will continue to chew over who won, who lost, what this means for 2016, etc. Others are worried about what this actually means.
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Re: Taxes and fiscal cliff

Postby fisticuffs » Wed Jan 02, 2013 2:22 pm

Meanwhile, we're staring at a tax increase coupled with a significant decline in social services.


So you want lower taxes and increased services? Move to CA. I would have preferred higher taxes on the rich and slashed military spending. It's just not politically possible. Don't let the perfect be the enemy of the good.
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Re: Taxes and fiscal cliff

Postby O.J. » Wed Jan 02, 2013 2:26 pm

jjoyce wrote:2013 isn't 2008. Maybe it is, but it's because every year since 2008 has been pretty much without growth.

Read the news, particularly the financial news. Billionaires are cashing in their consumer product stocks (guys like Buffett and Soros). Inflation is on its way. Meanwhile, we're staring at a tax increase coupled with a significant decline in social services.

Those interested in keeping score (cable news, talk radio, this forum) will continue to chew over who won, who lost, what this means for 2016, etc. Others are worried about what this actually means.


Subpar growth, but still growing.

http://www.tradingeconomics.com/united- ... gdp-growth

Inflation has to hit us at some point, but there's still too much slack in the economy for it to make a big difference anytime soon.
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Re: Taxes and fiscal cliff

Postby jjoyce » Wed Jan 02, 2013 2:52 pm

fisticuffs wrote:So you want lower taxes and increased services? Move to CA. I would have preferred higher taxes on the rich and slashed military spending. It's just not politically possible. Don't let the perfect be the enemy of the good.


I think you're accepting incompetence as the enemy of competence because your man is in the White House and you're rooting for him to "win" this battle. I voted for him, too, but this payroll tax thing is the result of a Washington game that he's playing.

The fiscal cliff deal is being peddled as avoiding a middle class tax hike. Well, this is a middle class tax hike. You can call it the sunset of a tax cut that was meant to be temporary if you'd like, but that sounds more like water carrying and spin than the truth. Middle class taxpayers like myself are paying more in taxes today than we did a week ago. Republicans bargained the cliff deal for raising taxes up to $450k or whatever and Democrats never put the payroll tax on the table despite winning on that precise issue in a year when they lost everything else (2010). The whole gist of both presidential campaigns and (guessing here) the vast majority of Congressional campaigns was that the middle class wouldn't be paying more taxes.

Two months later, we are. Since the Republicans weren't going to do anything about it and the president never brought it up, they all get the blame. Let 2013 be the year when we stop apologizing for the people we vote for like a bunch of Republican phone bank workers.
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Re: Taxes and fiscal cliff

Postby O.J. » Wed Jan 02, 2013 2:56 pm

jjoyce wrote: I voted for him, too, but this payroll tax thing is the result of a Washington game that he's playing.


To be fair, the payroll tax holiday itself was, too.
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Re: Taxes and fiscal cliff

Postby jjoyce » Wed Jan 02, 2013 3:00 pm

O.J. wrote:To be fair, the payroll tax holiday itself was, too.


Disagree. It was actual stimulus that put more money in people's pockets, immediately, at a time when nearly everyone agreed that the country needed more economic activity.
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Re: Taxes and fiscal cliff

Postby pjbogart » Wed Jan 02, 2013 3:04 pm

Jason, that 2% reduction was coming out of the Social Security payroll tax. It was a temporary reduction aimed at jumpstarting the economy by putting a little bit of extra cash in workers' pockets, but it was doing so at the expense of Social Security collections. I would say that if people are concerned about economic slowdown related to the expiration of the payroll tax cut, they should lobby for a 2% reduction in federal taxes unrelated to Social Security.

There is plenty of fat to be cut from the federal budget without weakening our social safety nets.
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Re: Taxes and fiscal cliff

Postby fisticuffs » Wed Jan 02, 2013 3:10 pm

It was actual stimulus that put more money in people's pockets, immediately, at a time when nearly everyone agreed that the country needed more economic activity.


And no doubt the man you voted for will be pushing for more actual stimulus that will put money in people's pockets during his next term. Of course every bit of it will be shot down by the Teahdists who only allow for corporate stimulus as any other stimulus equals communism but it's not like stimulating the economy is dead now that this bill has been passed.
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Re: Taxes and fiscal cliff

Postby snoqueen » Wed Jan 02, 2013 4:12 pm

When it comes to taxation, the devil's in the details. Are you so sure you'll be taxed more?

Here's a graphic showing what percentage of people at each income level will see an increase versus those who won't. Pick your level and see your chances:

http://www.washingtonpost.com/politics/ ... aphic.html

I don't know if they drew up a graph like this before writing the legislation, but to my mind the results are nicely progressive. Of course this is only federal income tax, and considering other kinds of taxes would give the profile a less progressive contour.

I don't have time to look for it right now, but maybe someone else can find a representation of what kinds of stimulus (less income taxes, more public works spending, etc) actually produce the most bang for the buck in our economy. For example, less taxes for the very rich produce relatively little impact because the very rich tend to save the money instead of return it to the economy through immediate spending.
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Re: Taxes and fiscal cliff

Postby Stebben84 » Wed Jan 02, 2013 6:17 pm

jjoyce wrote:It was actual stimulus that put more money in people's pockets, immediately, at a time when nearly everyone agreed that the country needed more economic activity.


You just nailed it. It was part of the stimulus. We knew that wasn't going to last forever. This had nothing to do with the fiscal cliff bullshit and I guarantee if they tried to add it back in, it would get shit on by the republicans. They never liked the stimulus stuff to begin with. I got my first paycheck today sans about a hundred bucks because of this. It sucks but we knew it was coming. It wasn't supposed to be permanent.

For what it's worth, I saw it come out of my paycheck before any fiscal deal was made. It showed up as more paid towards S.S., yet I also saw a reduction in my state and federal taxes withheld. That I didn't get. Luckily that was offset by yet another increase in the amount of insurance and retirement I pay for through the state.
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Re: Taxes and fiscal cliff

Postby jjoyce » Wed Jan 02, 2013 7:11 pm

I'm not drinking this particular flavor of kool-aid. Every tax cut or hike is "temporary." Blaming the Republicans for this is like blaming Wisconsin Democrats for not doing a better job of blocking Scott Walker's legislation (I've tried that. It doesn't stick.). Blame goes to the lot of them. In particular, the guy in the White House gets the blame when taxes go up and mine just did.
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Re: Taxes and fiscal cliff

Postby Stebben84 » Wed Jan 02, 2013 7:30 pm

jjoyce wrote:In particular, the guy in the White House gets the blame when taxes go up and mine just did.


But they didn't go up. They went to the levels they were before. You're now playing the Norquist game when they were trying to end the Bush tax cuts for the rich. He said it was a tax increase when indeed it was just going back to previous levels. Did you think he was right?
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Re: Taxes and fiscal cliff

Postby O.J. » Wed Jan 02, 2013 7:49 pm

jjoyce wrote:I'm not drinking this particular flavor of kool-aid. Every tax cut or hike is "temporary." Blaming the Republicans for this is like blaming Wisconsin Democrats for not doing a better job of blocking Scott Walker's legislation (I've tried that. It doesn't stick.). Blame goes to the lot of them. In particular, the guy in the White House gets the blame when taxes go up and mine just did.


I don't necessarily disagree, but how about I blame you for complaining about your taxes going up in the same breath as lamenting a decrease in services? In another thread, you suggest increasing spending on mental health. Would it be acceptable for you to pay for this by returning the payroll tax back to its regularly scheduled rate?
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Re: Taxes and fiscal cliff

Postby Huckleby » Thu Jan 03, 2013 12:39 am

jjoyce wrote:I'm not drinking this particular flavor of kool-aid. Every tax cut or hike is "temporary."


Bingo. The Bush tax cuts were once temporary, now they are permanent for all but 0.7% of the population. Yet the payroll taxes were not similarly treated, and there was hardly a whimper of resistance.
Why? Because the upper middle class have the most political power of any constituency in Washington. The lower half of the middle class suck the hind teat.

The payroll tax is the most regressive and offensive tax we have anywhere, local, state or federal, in my opinion. You people who are cheering the rise in the payroll tax to preserve social security have bought-into a false choice argument. Why do you surrender the obvious fix of raising the cap?

Ahhhh, but the payroll tax is far from the worst part of the deal that Obama has struck. Obama has traded the cow for a bag of magic beans. Everything Obama got out of this deal is short term. The Republicans get every long term advantage.

Obama's speech today about how he is not going to stand for any more obstructionism by Republicans in future debt ceiling confrontations was farcical. Obama just gave away all Democratic leverage, and now he expects the Republicans to respond in kind out of the goodness of their hearts?

My brother is a republican, fiscal conservative, and he is depressed by today's deal for reasons that might surprise you: it will be impossible for many years to raise taxes. Any and all debt reduction will have to come from spending cuts alone.

The Tea Party Republicans in the House have been empowered long-term by this bargain. Pragmatic fiscal conservatives know this is bad news for country, the end result will be gridlock and little progress on debt problem. Liberals of all stripes will be most unhappy of all, because government programs are likely to shrink modestly, and lower income people will pay the greatest price.

If Obama was going to surrender the Dem leverage on the Bush tax cuts and the sequester, he should have at least gotten a formal commitment to end the debt ceiling stickups in exchange.
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