Dvorak Poll: What Should Be Done About The Expiring ‘Temporary’ Bush Tax Cuts?

Published on December 26th, 2009

Posted by Uncle Dave in Politics, economy

In the back of every Washington politician’s mind is this sobering fact: Unless Congress acts, the temporary tax cuts it passed when George W. Bush was president will expire at the end of next year.

If the Democrats who control Congress do nothing and let the tax rates on the highest income brackets return to their pre-2001 levels, their Republican rivals and many Americans will slam them as tax hikers.

If they prevent the legislation from expiring, however, they and any Republicans who support this approach will add $2 trillion to the already-growing federal budget deficit over the next decade. The news media and influential watchdog organizations will slam them for that.

What does the President want to do? Remember his watch word: Change.

President Barack Obama has said that he expects to retain most of the Bush tax reductions, letting them expire only for individuals or couples who earn more than $250,000 annually in taxable income. This would apply to income taxes and to capital gains on investments, making Bush’s tax cuts Obama’s tax cuts.

Under Obama’s plan, high earners no longer would fall into a 35 percent top tax bracket, but into new 36 percent or 39.6 percent brackets. Capital gains taxes would rise from the current 15 percent to 20 percent for long-term investments, and up to 39.6 percent for gains from short-term investments.

And how will this affect “Jobs, jobs, jobs”?

19 users responded in " Dvorak Poll: What Should Be Done About The Expiring ‘Temporary’ Bush Tax Cuts? "

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# 1 Uncle Don said, on December 26th, 2009 at 9:43 am

Obama’s plan is fair, though for my benefit keeping the deficit-generating Bush plan is the only way.

On the other hand, another 1929 depression isn’t for me.

# 2 Pmitchell said, on December 26th, 2009 at 12:03 pm

keep the Bush tax cuts add more for small business to stimulate the economy and then cut govt spending to only what we take in.

Dissolve the NEA, dept of education, dept of health and human services, hud and any other that is not explicitly allowed by the constitution and leave it up to the states to fund the other programs them selves if they choose to.

then line up and shoot every single congressman and senator and lobbyist (after a fair trial where they will be found guilty of treason)

that should be a good start to restoring our country

# 3 dusanmal said, on December 26th, 2009 at 12:10 pm

Keep tax cuts as even that much is too much. Cut Govt. spending at every single possible place. Realize that we are now country in economic trouble, poor, in overwhelming debt and adjust spending accordingly. And savings exist everywhere: return most (90+%) of troops from Europe, cut troop levels from tense but relatively safe places around the World (50+%); stop completely Govt. driven International aid of any kind (we are poor as a Country and can’t/shouldn’t give until we do not owe anything; individuals should take over that humanitarian duty [instead of using money to undermine our political system ex. Soros]); cut Govt. agencies and scale their average pay to Country-wide average pay; stop paying any domestic non-govt. agencies for whatever they do (again – move this obligation to concerned individuals); sell Govt. real estate which is not essential; raise money by emergency sale of unrestricted natural resource expl. rights (overriding any State and Fed. regulations);- just for the start… Make commitment for no new or increased taxation for a decade AND commitment of the budget with 1 T$ surplus per year for a decade (via budget cuts of everything not essential).

# 4 Postman said, on December 26th, 2009 at 12:17 pm

#2,

There are not longer any small businesses in the USA, so giving them a tax break does nothing. Think about it, I bet in your town, every restaurant is a big corporate chain. Every retail is the same, and you probably also have a NAFTA impact zone where all the smaller manufacturers used to exist, but are now barren and empty buildings.

We should go back to a confiscatory tax scheme where individuals making more than 250k and couples making more than 500k are subject to a 90% tax rate, on all their income over those amounts, be it income or capital gains.

Also, the top rate for capital gains should match or be greator than income tax, because it is bad policy to not tax people for not working… It causes them to invest in risky investment schemes, like the ones that created the current economic climate.

# 5 Dwight David Diddlehopper said, on December 26th, 2009 at 1:54 pm

“What should be done about the expiring tax cuts.”

Sell your stocks and take the capital gains before the tax cuts expire, of course. And probably sooner is better than later because there will be a lot of “profit taking” as we get further in to next year.

# 6 The Ox said, on December 26th, 2009 at 2:47 pm

The Bush tax cuts had nothing to do with jobs and everything to do with gutting our government’s ability to deal with the issues we face. The tax cuts went to those with plenty and were paid for with borrowed money. I’d say it’s about time for the people who received that borrowed money to begin paying back at least the interest. So yeah…the tax loans…they need to go.

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” – FDR

# 7 stopher2475 said, on December 26th, 2009 at 3:40 pm

I feel bad Postman has no restaurants to go to. The best ones in my town are the smaller ones. That would be a nightmare.
Anyhow, I don’t necessarily agree with 90% but letting them go back up to the Clinton era rates for people making 250k isn’t going to put anyone out and is more fiscally responsible. It’s a couple points and I’m sure after the accountants get done with it it will be even less.

# 8 brm said, on December 26th, 2009 at 6:22 pm

#4:

“There are not longer any small businesses in the USA”

You’re dumb.

# 9 Dallas said, on December 26th, 2009 at 7:05 pm

Let’s leave them in place since they worked wonders.. oh wait.

# 10 tydas said, on December 26th, 2009 at 7:49 pm

don’t forget that in this game the ‘rabble’ must be kept content lest we face a revolt…and please, if you are going to say cut..cut..cut then also say defense, corp. welfare, etc…

# 11 Pmitchell said, on December 26th, 2009 at 9:43 pm

#10 you need to read the constitution defense is one of the only things that it explicitly tells the federal govt to do, But i am all for letting Europe fend for them selves, lets see how much faster their so called socialist utopias last when they actually have to pay for their own defense instead of depending on the good ole USA to cover their asses all the while they subsidize their failing industry to undercut ours. I say bring our troops home form Europe and other not battle front countries and spend those defense dollars here in America in our bases on our soil let Europe and the middle east fend for them selves

# 12 bill said, on December 26th, 2009 at 10:42 pm

It’s simple math:

more taxes = less jobs
less taxes = more jobs = more taxes (eventually)

# 13 Uncle Patso said, on December 27th, 2009 at 2:29 am

Think tax rates are high now?

From Wikipedia
http://en.wikipedia.org/wiki/Taxation_history_of_the_United_States

“Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War I. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000) in 1945. Top marginal tax rates stayed near or above 90% until 1964 when the top marginal tax rate was lowered to 70%. The top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988.”

Chart of the highest income tax brackets in the U.S. in the last 95 years at

http://portfolio.com/interactive-features/2008/03/Tax-Brackets/

= = = = =

It amazes me how many people want to live in a weak country. Want to see what it’s like living in a weak country? Try a vacation in Somalia, Liberia, the Balkans, the ‘stans, Haiti. Then imagine what it would be like in your state if there were no U.S. government.

And the Laffer curve is still as laughable as ever. If collections go up as rates go down, we should lower the rates to ZERO and get INFINITE collections! Why, negative rates should provide TRANS-INFINITE amounts! We’ll rule the UNIVERSE! HA-HA-HA-HA-HAAAAAA!!!

Let the tax cuts die!

# 14 Cursor_ said, on December 27th, 2009 at 5:38 am

“Eisenhower believed that taxes could not be cut until the budget was balanced. “We cannot afford to reduce taxes, [and] reduce income,”

“Eisenhower kept the national debt low and inflation near zero”

Kill the tax cuts. They have not worked, we need money to fix all the problems we have and rebuild our aging and crumbling infrastructure.

We have more “I-35W” bridges waiting to happen.

Take care of the USA now, don’t put it off.

Cursor_

# 15 HeeHee said, on December 27th, 2009 at 7:33 am

#6 is correct
#14 is also correct

Taxes hurt the middle and lowest earners much more than the high earners (who can afford to pay them). Yet, the highest earners are helped most by the benefits of being Americans – and they wail the loudest against paying taxes.

Lottery Republicans: Low wage earners who don’t owe much tax; but IF they hit the lottery, they don’t want to pay taxes on it.

You live here, shut up and pay your way.

# 16 RTaylor said, on December 27th, 2009 at 8:11 am

The estate tax shouldn’t be reinstated at the million dollar level. That’s a 45% tax. At least keep it at the $3.5 million exception. This tax can destroy family businesses.

# 17 LOWER CASE SCREEN NAME said, on December 27th, 2009 at 8:13 am

#4 – You must wear a goatee: only is some mirror universe would a confiscatory tax have something to do with a “free” country.

#11 – I agree. Cut Eurinal loose. We’ve been carrying them for decades. As has been said, the biggest problem with socialism is eventually you run out of someone else’s money. It’s a lot easier to create a socialist hellhole when you don’t have to pay for your own defense.

The Fair Tax is probably too much for most people to gt their heads around probably too difficult to implement in an abuse-proof way so the next best option is a flat tax. Scrap the entire tax system and go with a 10% flat tax on all income. No deductions or loopholes. For example: you have kids? Tough, it was your choice and your tax is not reduced. Investment gains are simply considered more “income” and taxed at 10% as well. Can’t bitch about “fariness” since everyone is taxed the same, no exceptions for anything.

States, counties, cities etc. can do what they want with their own taxes knowing they’re in competition with each other to provide an environment people want to live in. Overtax and people move out.

# 18 Thomas said, on December 27th, 2009 at 6:50 pm

#13
> And the Laffer curve is
> still as laughable as ever.
> If collections go up as
> rates go down, we should
> lower the rates to ZERO
> and get INFINITE collections!

They say that ignorance is bliss which would explain your laughter. Apparently, you never learned about curves in mathematics. To present the other side of your laughable analogy, why don’t we raise tax rates to 100% if increasing taxes increases tax revenue?

The tax revenue as a function of tax rate occurs on a curve where at the optimal rate any increase would lower tax revenue just as any decrease would lower tax revenue. This the Laffer Curve and it is not in dispute. Where there is great disagreement is knowing our exact location on the curve. Are taxes too low or too high? Given Obama’s increase in tax rates (both direct and indirect) and his desire to let the Bush tax cuts lapse, we are about to find out.

Would you be in favor of increasing tax rates if you knew it would lower tax revenue?

# 19 Rick Cain said, on December 27th, 2009 at 7:39 pm

Who honestly cares.

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