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There were lots of specific proposals in President Obama's State of the Union speech last night, and as it relates to fiscal policy, this passage contained one of the best:

To help working families, we will extend our middle-class tax cuts.  But at a time of record deficits, we will not continue tax cuts for oil companies, investment fund managers, and those making over $250,000 a year.  We just can’t afford it.

Economically, I don't think it makes sense to worry about the deficit until we are well on our way to economic recovery. Indeed, the best way to narrow the deficit is to grow the economy -- thereby increasing revenues.

Given that President Obama disagrees -- likely on both fiscal and political grounds -- it's good to see that he's not putting all his eggs in the discretionary domestic spending freeze basket. Over the long run, President Bush's tax cuts on the wealthy were reckless fiscal policy, and letting them expire must be part of any deficit reduction strategy.

Again, the best way to bring down the deficit is to strengthen the economy. But to the extent you are going to spend any cycles in 2010 worrying about how to bring the budget into balance, you can't just look at spending. You also have to look at revenues.

Over the past decade, Bush's tax cuts for the wealthiest 5% of Americans cost $1 trillion -- more than four times as much as the freeze proposal.

The fact that President Obama is willing to do both is a major difference between his approach to fiscal policy and that of Republicans like John McCain and Sarah Palin. His approach isn't perfect -- but it is better than theirs, by a wide mile.

Originally posted to Daily Kos on Thu Jan 28, 2010 at 09:39 AM PST.

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Comment Preferences

  •  Slightly O/T but in absence of an open thread... (9+ / 0-)
    ...if anyone wants to live-stream Obama's speech in Tampa today re: jobs and fiscal responsibility, here's a link to do so. FYI it's silent now b/c he hasn't yet started speaking.

    Losing Liberally: Losing pounds, gaining a lighter liberal boof.

    by boofdah on Thu Jan 28, 2010 at 09:41:49 AM PST

  •  I agree-I'd rather have him than them fixing (5+ / 0-)

    these financial problems.

  •  Grow the economy before worrying about the defici (11+ / 0-)

    Sure. But we all know that cutting taxes for the wealthy doesn't do shit for the economy. The theory is that they invest the money they get from those cuts into their businesses; the truth is that they simply enjoy bigger bank accounts. Ending those tax cuts won't hurt the economy one little bit.

    They tortured people to get false confessions to fraudulently justify our invading Iraq.

    by Ponder Stibbons on Thu Jan 28, 2010 at 09:42:08 AM PST

    •  and they use their extra money (7+ / 0-)

      to bribe more politicians, to get even more tax breaks, thus expanding the problem even more.

      The Bush Administration already made a mistake with Bernanke, and the Obama Administration appears desperate to follow suit. -kos

      by vintage clothes on Thu Jan 28, 2010 at 09:45:03 AM PST

      [ Parent ]

    •  When you give more money to the wealthy, (8+ / 0-)

      they save it.  That's how many of them got wealthy to start with.  Trickle down is not good economic policy and anybody that hasn't figured that out by now, hasn't been paying attention.

      •  The wealthy became wealthy (1+ / 0-)
        Recommended by:
        burrow owl

        by investing their savings.  

        There are no fortunes built from putting money in bank savings accounts.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Thu Jan 28, 2010 at 10:03:41 AM PST

        [ Parent ]

        •  Yeah, they invest it (4+ / 0-)
          Recommended by:
          stagemom, milkbone, Egalitare, Wolf10

          into casinos arcane financial instruments such as credit default swaps and hedge funds, rather than the real economy. All thanks to the ridiculous low 15% capital gains tax rate, which needs to be abolished. Fortunes are made, not on sustainable economic growth and tangible products, but on financial arcana.

          Proceeds on investments held five years or less need to be taxed as ordinary income, and financial instrument transactions need to be taxed at 0.25 percent. That would help force these greedheads to actually invest in the productive economy.

          "Big Darkness, soon come"-Hunter S. Thompson

          by NoMoreLies on Thu Jan 28, 2010 at 10:13:34 AM PST

          [ Parent ]

          •  If you look at the list of those who (1+ / 0-)
            Recommended by:

            built great wealth - Forbes 500 for example, very few built fortunes as you describe.

            You have a bigoted view of how wealth is created in the US, and your thinking is no different than the right-winger who sees a few Muslims in acts of terrorism and therefore concludes that all Muslims are at least suspect if not supporting or involved in terrorism.

            The most important way to protect the environment is not to have more than one child.

            by nextstep on Thu Jan 28, 2010 at 10:21:29 AM PST

            [ Parent ]

            •  Then what explains the fact (0+ / 0-)

              that 1) investments and economic growth focused on FIRE industry at the expense of all others in the last 30 years (the size of the financial sector has grown fivefold since Reagan came to power), 2) jobs and wages have been stagnant or declining for the bottom 90% of the population, 3) most new jobs manufacturing for US-based multinationals have been in China or other cheap-labor economy, and 4) proceeds from investments in financial instruments are taxed at a far lower rate than wages or direct corporate profits.
              Perhaps wealth was created in a different way before Reagan-Bush, through broad based prosperity, but that is not the case now.

              And by the way, I agree with your signature line, and limiting population growth. That is why I refused to have more than 2 biological children (I only wanted 1, for environmental reasons; 2 was the compromise with my wife who wanted more).

              "Big Darkness, soon come"-Hunter S. Thompson

              by NoMoreLies on Thu Jan 28, 2010 at 11:23:03 AM PST

              [ Parent ]

      •  Trickle down is good economic policy only (4+ / 0-)
        Recommended by:
        stagemom, rantsposition, Wolf10, SoCalSal

        when it's the middle class you're setting up to be doing the trickling. And then it's not a trickle, it's a hydrological cycle of wealth.

        Strong consumer spending from a strong middle class helps the working class and the poor, and enables significant class mobility upwards.

        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

        by Robobagpiper on Thu Jan 28, 2010 at 10:08:31 AM PST

        [ Parent ]

    •  Considering how small and medium size (0+ / 0-)

      business credit is still weak, and will be less available than in the last decade - much of the higher taxes will come from business investment that would have otherwise created more jobs - the money the government takes in taxes is removed from spending and job creating investing.

      The path to a jobs and budget deficit recovery is through private sector jobs.  

      Keep in mind that direct and indirect government jobs are 100% paid for by taxes and government borrowing - and the job exists only as long as the government continues to pay for the job, so when stimulus jobs end - they contribute to job losses.

      Provate sector jobs pay taxes each year through employee and employer taxes - without the need for net government spending every year to keep the job going.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Thu Jan 28, 2010 at 10:15:27 AM PST

      [ Parent ]

  •  What about the cuts in capital gains taxes? (3+ / 0-)
    Recommended by:
    Gooserock, WisVoter, ZackB
    •  I wondered about that too. How does one define (1+ / 0-)
      Recommended by:

      "small business?"

      That will interesting to find out.

    •  From what I understand he said (5+ / 0-)

      cutting capital gains taxes for investing in small businesses. If I heard correctly, it's hard to argue against that.

      •  What good does it do? (0+ / 0-)

        Small businesses aren't bought and sold all that much, after all, so the possibility of selling way down the line is remote.  Or: it strikes me as more of a lottery windfall than a coherent incentive.

        •  I'm not sure you understand how this works. (0+ / 0-)

          If I invest in a small business (i.e. buy shares) and sell them later, then capital gains comes into play. It's not a matter of buying and selling the businesses themselves. It's about trying to provide an incentive for investors to put their money into small businesses...instead of maybe, Haliburton.   :)

          •  I understand how it works. (0+ / 0-)

            But small business stock is highly illiquid precisely because of how risky the businesses tend to be compared to publicly traded equities.

            Because of that, the decision to invest will be entirely on the underlying business, and any tax considerations will be afterthoughts.  

          •  Also: you may not understand how this works, (0+ / 0-)

            but the more common way to buy and sell businesses is by sales of the assets.  That way any unknown risks and contingent liabilities stay with the empty shell target corp.

            So, even if tax considerations come into play (which, as I note above, will be rare), it won't matter in many small business sales because stock sales are less common than asset sales.

            •  Assets are subject to capital gains. (1+ / 0-)
              Recommended by:
              burrow owl

              But here's one take on what this proposal means:

              If enacted, this would significantly enhance the tax incentives currently available for qualified small business stock. Under current law, the exclusion for purposes of the regular income tax system of 50% of the recognized gain on the disposition of qualified small business stock (which was increased by the recent American Recovery and Reinvestment Act to 75% for issuances in 2009 (after February 17, 2009) and in 2010) is substantially undercut by the combination of the high rate of tax (28%) applicable to the non-excluded portion of the gain under the regular income tax and the interplay between the AMT rules and Section 1202. Thus, historically, the principal federal tax benefit of qualified small business stock has been the ability to achieve "rollover" treatment of the proceeds from the sale of qualified small business stock under IRC Section 1045.


              And the language from the proposal itself states:

              Because the taxable portion of gain from the sale of qualified small business stock is subject to tax at a maximum of 28 percent and a percentage of the excluded gain is a preference under the AMT, the current 50-percent provision provides little benefit. Increasing the exclusion would encourage and reward new investment in qualified small business stock.

              The Tax Policy Center has a somewhat mixed review of it, but the general reasoning behind it is stated:

              The proposal would encourage more investment in some qualifying small businesses, but based on past experience its effect would be limited.  It also might divert some capital from more productive investments in firms that do not qualify for the benefit.  The current 50 percent capital gains reduces revenues by only about $500 million per year, indicating that few taxpayers take advantage of the current exclusion.


              Maybe more will take advantage of it now and investments in small businesses will rise. That would be a good thing.

      •  No it's not. (0+ / 0-)

        "Carried interests" used by hedge fund managers grew out of partnership law intended to "equalize" owners in a business where some invest $ and the others their expertise (services.)  That could be a plumber or chef or Wall St. investment banker.
         Eliminating CG tax entirely for "small businesses" could lead to similar abuse unless some very strict regulations are established to make sure big businesses aren't disguising their investments as such.

        My Karma just ran over your Dogma

        by FoundingFatherDAR on Thu Jan 28, 2010 at 10:44:52 AM PST

        [ Parent ]

        •  First, (1+ / 0-)
          Recommended by:
          burrow owl

          Eliminating CG tax entirely for "small businesses" could lead to similar abuse unless some very strict regulations are established

          I didn't hear anything about "eliminating CG tax entirely" last night as you frame it. I heard "cut", not eliminate.

          Second, of course regulations would need to be in place and enforced. But we already know that (see the last 8 yrs under Bush).

    •  They need customers, not investment (0+ / 0-)

      Just heard a small business owner being interviewed on the radio.  He said they did not need tax breaks for investment, or loans.  They needed customer orders.

      Without a demonstrable stream of orders, a bank is not going to loan them money anyway.

  •  When do those tax cuts expire? (3+ / 0-)
    Recommended by:
    wishingwell, stagemom, I love OCD

    I was very heartened to hear that part of the speech as well.

    Obama has said before (I believe) that he will let those tax cuts expire, rather than push to end them earlier. Perhaps he has changed his mind? I hope so!

    •  At the end of this year, I think (6+ / 0-)

      Dividends will be taxed as ordinary income again instead of the 15% give-away to the rich.  Long-term capital gains rates go back up to what they were before.

      People complain that the top tax rate for the rich is currently 35%.  It's not... for many of them it's 15%.  Warren Buffet pays a lower tax rate than his secretary.

      Big Joe Helton: "I pay Plenty."
      Chico Marx: "Well, then we're Plenty Tough."

      by Caelian on Thu Jan 28, 2010 at 10:09:22 AM PST

      [ Parent ]

      •  They will expire... (6+ / 0-)

        At the end of this year, if not renewed.

        I'm grateful to him for forcefully stating last night that he was dead-set against renewing them. That, alone, will help in reducing the deficit by a huge chunk.

        "Those who forget the past are doomed to repeat it."--Miguel De Santa Anna

        by GainesT1958 on Thu Jan 28, 2010 at 10:16:21 AM PST

        [ Parent ]

        •  I would not rule out negotiations leading to... (0+ / 0-)

          ...a multiple year (2-3 years?) phasing in of that increase in exchange for Carte Blanche on Stim 2.0, if not a full blown WPA 2.0.

          I certainly wouldn't agree to a phase in UNLESS AND UNTIL I had agreement on something really big. That said, I think the GOP is so hell bent on obstruction that they'd dismiss such a deal immediately.

          "Power concedes nothing without a demand. It never did and it never will." -- Frederick Douglass

          by Egalitare on Thu Jan 28, 2010 at 11:44:06 AM PST

          [ Parent ]

      •  Is the higher rate (0+ / 0-)

        for dividends only going to be for those over $250k?

        •  That would require action. (0+ / 0-)

          The present plan is for dividend rates to go up for everyone.  To maintain the current 15% rate (0% for low earners) for anyone beyond 2010 requires action, and any action will most likely result in the usual gridlock.  We'll see if Obama can paint the Rebublicans as "the party of middle-class tax hikes" if they obstruct it.

          Big Joe Helton: "I pay Plenty."
          Chico Marx: "Well, then we're Plenty Tough."

          by Caelian on Thu Jan 28, 2010 at 01:47:48 PM PST

          [ Parent ]

  •  And a Challenge For Us (6+ / 0-)

    to challenge the deficit hawks* when they inevitabily oppose this: "Why do you want America to go bankrupt?"

    *in a way that transcends the noise machines.

    NeoCons' view on torture: if it's good enough for Jesus, it's good enough for anyone!

    by clone12 on Thu Jan 28, 2010 at 09:42:56 AM PST

  •  Kill the deficit... (0+ / 0-) growing the economy.  Supply Side Voodoo doesn't create economic growth, just bigger deficits

    We should've done Government Reform before Health Care

    by jds1978 on Thu Jan 28, 2010 at 09:43:03 AM PST

  •  Not a single net new job created in the last (10+ / 0-)

    10 years. So much for "shotgun" tax cuts.

    Afghanistan:Graveyard to empires-It's not just a bumpersticker

    by JML9999 on Thu Jan 28, 2010 at 09:43:17 AM PST

  •  Nit: Reagan Is Not Spelled "B-U-S-H" (0+ / 0-)

    Gimme a break. A liberal can dream can't he?

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Jan 28, 2010 at 09:43:22 AM PST

  •  Having long objected to those tax cuts to begin (3+ / 0-)
    Recommended by:
    wishingwell, WisVoter, SoCalSal

    with, this is welcome news to me.

  •  Agree, but (0+ / 0-)

    His approach isn't perfect -- but it is better than theirs, by a wide mile.

    As long as "his approach" means words only, not deeds, then it doesn't matter.  From here on at the one-year post, I'm looking at "deeds" and will ignore the words.

    We thought we won in 2006 and 2008. We were wrong. The Corporate team is still in charge. Let's win next time.

    by mrobinson on Thu Jan 28, 2010 at 09:43:50 AM PST

  •  It was a genius bit of political framing... (4+ / 0-) present the end of the Bush tax cuts as a spending freeze.  Gave poor Paul Krugman the vapors for a day though.

  •  I wonder if DC insiders who deal with bureacracy (0+ / 0-)

    every day and with complex budgets involving billions-- even trillions-- of dollars are quicker to applaud spending cuts and bringing down the deficit because, psychologically, it just wears them out having to manage such a huge mess.

    Or maybe we elect most of our representatives out of the same group of penny-pinchers who run private businesses.

    Either way, the orgasmic response by politicians to reducing debt-- even as the middle class suffers-- is not a comfortable thing to watch from the outside.

    "In this new decade, it's time the American people get a government that matches their decency, that embodies their strength."-- President Obama 1/27/2010

    by samantha in oregon on Thu Jan 28, 2010 at 09:50:00 AM PST

    •  bureaucracy (0+ / 0-)

      "In this new decade, it's time the American people get a government that matches their decency, that embodies their strength."-- President Obama 1/27/2010

      by samantha in oregon on Thu Jan 28, 2010 at 09:55:13 AM PST

      [ Parent ]

    •  Suffer now and later if deficiets are ignored. (0+ / 0-)

      CBO couple days ago came out with a 10 year estimate that, including reasonable growth estimates, we'd run $ 500 B a year deficit thru 2020 (and they would grow a bit in the out years).  That ought to both scare and anger you.  Deficits are 'hidden' wealth transfers to the top 1% who own the banks that 'manage' nee 'skim off' and (in part) finance them.  Deficits funded by tax cuts to the wealthy are doubly egregious.

      The thing about out year deficits is that small changes now makes a big difference later.  That $ 25 B freeze (its not a cut) will add up quite rapidly thru the years.  It is $250 off the accumulated 8 year post 2012 projected debt of $ 4 trillion more.  It will shave even more off the out-year deficits, depending on interest rates and other assumptions.

      And put it in context: its about 3% of the stim, less than 0.7% of the over all budget, and a new stim would be exempt (if there were political will for that).  Further, not all spending is created the same for job creation.  Yes, it will be unlikely that all $25 B will be so redirected, but some portion will be, offsetting stim loss more than 1:1.

      Yes, the WH is betting that the economy has recovered enough that $ 25 B less a year for the next few years won't make a difference.  That's not an unreasonable bet, given the context of the full stim and budget #s.  

      A reasonable down payment IMO and politically essential to argue 'we all need to sacrifice'.

      P.S: From your comment, I assumed you had no problem with increasing taxes on the richest. If history is any guide, you shouldn't: this is what Clinton did in 1993, and we all what happened to Rethug predictions that it would cause a Depression, eh?

  •  Fiscal Responsibility Means (4+ / 0-)
    Recommended by:
    NoMoreLies, ceebee7, I love OCD, SoCalSal

    Taxing the Rich (like oil companies, hedge fund managers, millionaires, etc.).  They have it and can afford to pay their fair share -- they just don't have the willingness to do so.

    •  Also (5+ / 0-)

      The whole thing goes to shit when foreigners don't show up to by our government bonds. And they won't, if they conclude that we'll be running our deficits up to the breaking point, at which the only way out will be inflation to a degree that will severely hurt bondholders.

      We can't balance the federal budget by taxing the poor. The only program with credibility is the one that takes the taxes from those who have the funds.

      Obama's moves are as much about keeping our bonds viable as they are about advancing economic justice at home. And its incredibly important to all of us that he's sending these signals. Even the ships of our rich will sink if the bond auctions fail.

  •  Now if only we could raise taxes on that bunch.nt (0+ / 0-)
  •  The undertaxed wealthy do not create jobs (10+ / 0-)

    If they did, all third-world backwaters would be islands of prosperity due to the presence of a small, wealthy elite.

    Deoliver47 was right and deserves some apologies.

    by beltane on Thu Jan 28, 2010 at 09:51:44 AM PST

  •  So it it just the tax cuts which expire in 2011 (0+ / 0-)

    or is something else involved?

  •  Obama campaigned (5+ / 0-)

    on the idea that we need to look at waste in government spending.  Just because something is intended to benefit people in need doesn't mean it's run efficiently or that the money gets to those who need it.  Cutting programs that don't work or revamping them into programs that work better is just common sense.

    And you're absolutely right that strengthening the economy will reduce the deficit.

    A little anecdotal evidence of how outsourcing is wrecking us.  My engineering friends used to earn strong 6-figure incomes.  They bought houses and cars and paid taxes on their incomes.  Now many of them are barely making it.  The jobs are gone, so they work in the vaunted service economy, don't own houses, don't buy cars, and get tax refunds because their income is so low.  This benefits us how?

    I am, at heart, an optimist, which I consider to be spiritually necessary and proper, as well as intellectually suspect.

    by I love OCD on Thu Jan 28, 2010 at 09:55:11 AM PST

  •  And as Oregon showed two days ago (7+ / 0-)

    Getting rid of such tax breaks is both good policy AND good politics.

    "Polls are like crack, political activists know they're bad for them but they read them anyways."-Unknown

    by skywaker9 on Thu Jan 28, 2010 at 09:55:26 AM PST

    •  yup. the $10 since 1909 issue was "money" (0+ / 0-)

      for the winning side.  an eye-popping reality that was easy to harp on, easy to digest.
      i wish the prez had said the words "not paying for" 3 times instead of just once in the following quote:

      Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program.

      millie and manny mainstreet do not understand that medicare D was unfunded, that the wars were not paid for, and that tax CUTS COST MONEY!!!!  
      we got some 'splainin' to do...

      I died for Joe Lieberman's sins.

      by stagemom on Thu Jan 28, 2010 at 11:24:12 AM PST

      [ Parent ]

  •  Gallup Says That More Americans Are Reliant (5+ / 0-)

    on the governement for health care in 2009 than in 2008.  Employers are insuring less people in 2009 than in 2008.  If this doesn't mean that HCR should be passed ASAP, what does this mean.  DUH!!!

  •  60% of 100,000,000 compared to 60% of 100,000 (2+ / 0-)
    Recommended by:
    skywaker9, I love OCD

    The poor put upon upper caste won't be able to create jobs! Newsflash, they mostly create service industry jobs which are low compensation at best.

  •  I'm waiting to see the tax legislation (3+ / 0-)
    Recommended by:
    skywaker9, In her own Voice, Wolf10

    The huge bonuses should be taxed more starting today.

    Talk is cheap.

    look for my DK Greenroots diary series Wednesday evening. "It's the planet, stupid."

    by FishOutofWater on Thu Jan 28, 2010 at 09:57:49 AM PST

    •  You won't see it if (3+ / 0-)
      Recommended by:
      FishOutofWater, Wolf10, SoCalSal

      you aren't pressuring Congress.  Obama doesn't pass laws, he doesn't create taxes.  Congress is, as he mentioned, too busy running for reelection to actually serve their constituents.  The House needs more support from us, the Senate needs more pressure.  We need to money bomb the most progressive candidates.

      I am, at heart, an optimist, which I consider to be spiritually necessary and proper, as well as intellectually suspect.

      by I love OCD on Thu Jan 28, 2010 at 10:00:28 AM PST

      [ Parent ]

  •  You are (2+ / 0-)
    Recommended by:
    wishingwell, I love OCD

    right, it isn't perfect...but it is vastly better than any Republican idea suggested to date.

  •  I knew it. (2+ / 0-)
    Recommended by:
    In her own Voice, SoCalSal

    They're trying to avoid political problems that would occur in the fall elections if they just planned to let the tax cuts lapse without spending cuts.

    Trying to avoid the "Tax and Spend" charge sticking.

    I think it's smart.

    Bush Bites is a subsidiary of Bush Bites Inc., a registered corporate personhood.

    by Bush Bites on Thu Jan 28, 2010 at 10:01:41 AM PST

  •  He didn't mention it but the estate ("death") (3+ / 0-)
    Recommended by:
    stagemom, milkbone, JC from IA

    tax reduction (to zero) is also set to expire, so the tax will pop back up to 2001 levels.  That's what happens when you legislate by reconciliation.  

  •  Part of the reason why the economy is dragging (2+ / 0-)
    Recommended by:
    burrow owl, Wolf10

    IS the deficit. You can't run and finance enormous deficits without the money to finance the debt coming from productivity and overall economic growth. Think of it this way: if the budget deficit had been 150 billion dollars instead of 10 trillion, we could have had a stimulus package worth 150 billion dollars which would have had as much bang in it as 750 billion dollars did last year. All we've succeeded in doing by massive deficit spending is we've diluted the value of the dollar, which of course is what government wants, because government would love to repay its debt in inflated currency.

  •  "well on our way to economic recovery?" (0+ / 0-)

    That would be in how many years? If there is to be an economic recovery I strongly doubt that the private sector is willing or even able to lead the way, for the moment we lack the ideological framework that would allow government to do the job so we are stuck in the bardo between death and reincarnation---to use a Tibetan Buddhist metaphor.

    The frog jumped/ into the old pond/ plop!

    by Wolf10 on Thu Jan 28, 2010 at 10:05:39 AM PST

  •  And we just raised the debt ceiling.. (0+ / 0-)

    14.3 Trillion.

    100% of GDP.

    And Helicopter Ben may be re-confirmed today..

  •  Free ride for the rich (3+ / 0-)
    Recommended by:
    wishingwell, Wolf10, WyoChris

    It's high time to end the free ride that the rich citizens have had with their tax cuts. DO NOT EXTEND THEIR PRIVILEGES!

  •  Letting the Bush tax cuts expire is great, but... (3+ / 0-)
    Recommended by:
    Hunter Huxley, JC from IA, WyoChris's the passive way out. Democrats don't have to do anything and it will happen anyway.

    Really they should rollback the Reagan tax cuts. You know, back when the top tax rate was 70%. Look at this chart, and you know why we've had deficits since the 80's:

    •  YES! (1+ / 0-)
      Recommended by:

      Instead of raising taxes from 36 to 39% on the highest tax bracket, let's raise them to 80% for income over, say 5 million a year.  Give or take.

      Snarka Snarka Snarka!

      by Hunter Huxley on Thu Jan 28, 2010 at 10:22:55 AM PST

      [ Parent ]

    •  Baby steps, though. (1+ / 0-)
      Recommended by:
      Jed Lewison

      The wealthy will already complain loudly that letting the Bush cuts sunset is in fact a tax increase.

      In fact, they will probably start a prolonged campaign to convince the nation that it is a new tax on the middle class.  And, they will be at least partially successful.

      Try to do much more than this at this time, and I'm sure they would threaten to hold their breath until they die, and take all their marbles and go home.

      Baby steps.

      •  You're right. (1+ / 0-)
        Recommended by:

        Though, Democrats should at least use the idea of higher taxes for the rich as a negotiating tactic. Start with "50% for 250K". The Republicans predictably freak out, then Democrats come back with "okay, we give in. 42% for millionaires."

  •  A (0+ / 0-)

    Strong public option has to be part of any health insurance reform I sigh.


  •  I like to see a 50% tax on campaign adds (1+ / 0-)
    Recommended by:

    from corporations

    •  How about free TV time for candidates and parties (1+ / 0-)
      Recommended by:

      instead?  A tax on corp ads just means more costs to pass thru to them.  IT does nothing to prevent them crowding out other speech by bidding prices of this scarce resource out of sight.

      BTW, even if you get past the absurdity of corporate personhood, IMO the worst part of the SCOTUS decision is failure to realize that 1) unlike all other speech, the universe of Ad 'speech' is severely limited and inherently scarce, 2) therefore must by nature be regulated, 3) that will inevitably force choosing 'winners' and 'losers', so that 4) choosing to make real individual candidates and voters and political entities winners and moneyed interests who can't be candidates or voters (and might not even be US entities) is not only a reasonable restriction and one best left to representative branches not the courts to decide (and thus constitutional) it is the only reasonable restriction unless the country wants to murder democracy.

      IOW, this is not a 'speech' issue.  The universe of speech is unlimited, so long as it is conversation in the world at large, and effectively unlimited if it is print (you can always start a broadsheet or website).  TV is different.  TV is not unlimited.  There is only so much Ad time.  It is an inherently scarce resource and thus precisely the kind that it is constitutional to limit and regulate.

  •  There are many, many eggs in the basket. (1+ / 0-)
    Recommended by:

    If you tend to concentrate on just one, the chances of failure go way up, IMO.

    For instance, trying to grow your way out of deficits leads to the temptation to allow bubbles to form, because the growth looks great on paper.  For a while.  All the way up to the point when the bubble breaks.

    I would like the hear the President drive home the point that taxes are relatively low in this country compared to the rest of the developed world.  And, start disabusing the country of the notion fostered for so many years by so many Republicans, MBAs, and even an Anyus Randian Fed Chairman, that unlimited government largess to the top 5% of the economic ladder leads to sustainable economic growth and general prosperity.  It doesn't.  It never has.

    We seem to have a choice between a higher standard of living for more people, or a ridiculously high standard of living for fewer and fewer people.  The latter, of course, is the preferred choice of the wealthy.

    But, not the best choice for the society.  If this POTUS, in his short time in office, is even able to make a beginning toward taking us back the other way, I will have to consider his presidency a great success.

  •  Republicans like John McCain and Sarah Palin (0+ / 0-)

    His approach isn't perfect -- but it is better than theirs, by a wide mile.

    I don't disagree, but if that's the standard used to compare, then anything is going to look good.

    Some posts will attract a strong response from those unfamiliar with robust dialogue

    by Eposter on Thu Jan 28, 2010 at 10:24:13 AM PST

  •  Affordability is not the # 1 reason (0+ / 0-)

    It's just not right.  But that would take more courage than Obama possesses to make that argument.

    Big tent leads to big fail.

    by Paleo on Thu Jan 28, 2010 at 10:25:09 AM PST

  •  That's a conundrum. (0+ / 0-)
    Last night he proposed a Cap Gains tax cut for small businesses.  Considering some of the businesses I've worked for were technically "small businesses", yet the owners and others made well > $250k, how does POTUS intend to square those opposite goals?
      WIll the "small business" CG elimination morph into a huge tax giveaway the way basic partnership law (intended largely for small businesses) morphed into abusive "carried interests" for hedge funds?

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Thu Jan 28, 2010 at 10:29:55 AM PST

  •  You say (0+ / 0-)

    Economically, I don't think it makes sense to worry about the deficit until we are well on our way to economic recovery. Indeed, the best way to narrow the deficit is to grow the economy -- thereby increasing revenues.

    I couldn't disagree more.  We should ALWAYS - always be worrying about the deficit.  Deficits are destructive and inherently bad.  Does that mean that we can't run them?  No.  But that does mean that all reasonable effort should be taken to achieve some balance between the deficit and the necessity to spend to help move the economy forward.

    I really dislike this general attitude that the deficit doesn't matter.  It does.  It mattered when Reagan ran it up, it mattered when Bush 2 ran it up, and it matters now.

    •  Sure didn't matter (1+ / 0-)
      Recommended by:

      2001 through 2008, according to all the "experts".

      •  My head almost explodes (0+ / 0-)

        when I think of deficits.  Some deficits are good - just like investing in a home is good - but most are bad.  We spend that money on things that get us nothing (IRAQ).  We complicate it with international markets and foreign debt ownership.  The more we borrow on things that don't constitute an investment, the harder it is for us to borrow, the more we indebt ourselves to people (countries) with an ulterior motive (China).  It's SO not good.

        I have a real problem with the reaction here (not from you - I'm just being stream-of-consciousness) that somehow the idea of a very limited freeze in the 17% of the budget that is discretionary is a bad thing out of hand.  It's a top-line freeze, based on the 2010 budget numbers (which already represent a lot of increases for programs and agencies that progressives wholeheartedly support) - which means that some programs will see increases where others will see decreases.  It's not necessarily a bad idea to slow the rate at which we contribute to the current deficit.

        I understand fully (and empathize fully) that Obama has inherited a shitstorm and that some level of deficit spending is absolutely required because - on a priority basis - ensuring people can work or have support as we muddle through the recession comes first.  But trying also to wrap some deficit control into the picture without compromising the support I've mentioned is nothing but good.

        I'll get off my soapbox now.  :)

    •  Deficits are not inherently bad (0+ / 0-)

      First thing you have to recognize is that looking at a deficit on an annual basis is arbitary (but useful, because it creates a shared language).

      Much of the time it makes sense to run a deficit. Think of it as an investment in future growth, when you may well run a surplus.

      It would be inherently bad if we were borrowing in such a way that we were guaranteed to run out of money or capacity to borrow. But we aren't in that situation.

      In fact, if we got rid of the deficit this year, we'd end up destroying our economy. That means that this year...the deficit is anything but bad.

      Watch political video at Daily Kos TV | Twitter: @jedlewison

      by Jed Lewison on Thu Jan 28, 2010 at 10:52:54 AM PST

      [ Parent ]

  •  Any hope of framing it as Bush's tax hike? (0+ / 0-)

    President Bush made his tax cuts for the rich expire in 2011 to avoid having to own up to the long term budget impact.

    Given that President Obama decided not to repeal Bush's tax cuts, when they expire it will simply be the playing out of a Republican-devised policy-- for which Democrats cannot be criticized.

    I know, I'm delusional.  The Teabaggers will go nuts, making me wonder once again how many of them earn more than $250,000 a year.

    "When the people fear their government, there is tyranny; when the government fears the people, there is liberty." Thomas Jefferson

    by rmwarnick on Thu Jan 28, 2010 at 10:42:36 AM PST

  •  i think its a good idea..but i would extend them (0+ / 0-)

    another year...till unemployment goes down a little.

  •  America's era of greatest prosperity... (1+ / 0-)
    Recommended by:
    JC from IA

    ...was from the 50s through 1970, the great expansion (before the oligarchs set about to reclaim their pre-depression share of the economy).

    During that time of amazing economic growth and an increasing standard of living and income for all, the highest marginal tax rate ran between roughly 90% and 70%. Now the oligarchs screech over a few points on rates that are below 40%

    I'm the plowman in the valley - with my face full of mud

    by labradog on Thu Jan 28, 2010 at 10:51:10 AM PST

  •  i give Obama credit for going ahead with this (0+ / 0-)
    at the same time, i wish the Bush-era cuts on capital gains would also be reversed.  
  •  I don't understand the focus on (0+ / 0-)

    eliminating development tax breaks for oil and gas companies. All that does is shift more demand to overseas energy sources. I'm talking specifically about the intangible drilling costs expensing rules that allows drillers to fully expense their drilling costs in the year incurred.

    I'm am all 100% for moving towards renewable energy. But we also face the reality that we aren't there at this time. In particular, natural gas is a better substitue in the short-term than oil and/or coal. We've also seen some huge job growth in the nat gas sector over the last few years, one of the only areas in the economy to see growth. Elminating domestic expolation incentitives, particularly for small mom and pop drillers I think is short-sighted and bad national energy policy.

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