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The very serious people in the eyes of pundits are worried suddenly about the federal budget deficit. Most Americans are rightly worried about jobs knowing that job creation will help the deficit a lot, in and of itself. At a time of high unemployment with tepid job growth, federal investment is good and federal budget deficits are not a high priority. But whatever - but fine let's talk about that.

3 percent is below the squiggle

Where were these deficit hawks during the Bush years ? Truly I think that they simply love their overlords and hate the rest of us. However, I am astounded by their innumeracy. The deficit came from Bush's Great Recession, the resultant TARP bailout (nice economy that you have there - sure would be a shame if anything were to happen to it), thè tax cuts for the wealthy, Medicare part D, and our love for war and killing.

The simple fact is (source is Paul Krugman and his blog - linked on my previous diary on this topic) that raising the eligibility age for Medicare from 65 to 67 and reducing the cost of living adjustments for Social Security would only reduce the federal budget deficit 3 Percent. Let me say that again - those two moves would only save 3%.
And for that tiny amount , what would we get? Many seniors would be absolutely crushed by these barbaric moves.

On the other hand, the wealthy are wealthy. They can sustain a raise on marginal tax rates to 39.6% on income over 250K with no problem. 97% of all small businesses earn less than 250K profit and those that earn more would still get a lower rate on all income before that. If tax cuts for the wealthy (and deregulation) create jobs, what happened during Shrub's Presidency?

The claim that one can raise revenue without hurting the middle class simply by closing tax loopholes is fatuous. Their magic dust theory was tested and proven false. To raise real revenue, one must raise the marginal rates on income above 250K back to 39.6%. That raises 1.6 Trillion dollars over a decade. That makes a serious impact on our debt. It is more humane and rational. The wealthy benefit from the infrastructure we all built together .

Tax rates on that income should, must, and will go up. Our President got the most votes ever for anyone not named Barack Hussein Obama. He ran on this issue it and spoke plainly on the matter. The republican who opposed his position lost and lost badly- in an era of close elections with an economy like this , 4 % is a landslide. Public polling shows we are on the correct side of the issue in the eyes of the public.
If Boehner cannot agree to these terms because the republicans simply will not vote for it, then we must go over the cliff , imposing more damage on their brand. Boehner is in an impossible situation since his caucus will not back any deal he makes that is at all reasonable , but it does not matter. Over the cliff we go !

Originally posted to Vote4Obamain2012 on Thu Dec 13, 2012 at 07:30 AM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  If you have an earned income of $260,000... (21+ / 0-)

    ...your tax goes up by $360.

    OUCH!!!

    That is 0.14% of your salary (rounded up).

    Unemployment == waste, fraud and abuse.

    by NCJim on Thu Dec 13, 2012 at 07:55:37 AM PST

    •  It's not even that bad for them (8+ / 0-)

      Remember, it's not if you have EARNED income of $260,000, it's if you have TAXABLE earned income of $260,000. Let's not forget, most people in that income range itemize. That means deducting state and local income and property taxes, mortgage interest (currently even on multiple homes), charitable gifts, etc. Not to mention health savings accounts, 401(k), and all the other stuff that's pre-tax.

      A couple owning a home could have gross income approaching $400K to have a TAXABLE earned income of $260K. So it's really more like: make $360,000 and pay $360 more per year.

      Republicans...think the American standard of living is a fine thing--so long as it doesn't spread to all the people. And they admire the Government of the United States so much that they would like to buy it. Harry S. Truman

      by fenway49 on Thu Dec 13, 2012 at 01:59:07 PM PST

      [ Parent ]

  •  Alternative Minimum Tax for the top bracket. (12+ / 0-)

    Raising the top rate will be much more effective if there is an AMT of 23% or more attached to it.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Thu Dec 13, 2012 at 07:57:58 AM PST

    •  If Boehner doesn't cut a deal, (3+ / 0-)
      Recommended by:
      suesue, Lujane, ColoTim

      I believe the perennial AMT fix will reset to a point where it will start to hit people in the $60 - 70,000 range.  (I haven't checked that carefully, I got it from an NPR story a few days ago, so treat the actual number with a grain of salt.)

  •  Vote4 - all the reports I have read (3+ / 0-)
    Recommended by:
    nextstep, bumbi, Lujane

    state that raising the top marginal rate back to 39.6% for the top 2%, which I support, raises only $80 B a year, or $800 B over the next ten years. $80 B a year is less than 10% of the current deficit. Do you have a source for the $1.6 T number in your diary? I know this is a number the POTUS has requested in his budget negotiations, but I believe only half of that number comes from the increase in the top marginal tax rate.

    "let's talk about that"

    by VClib on Thu Dec 13, 2012 at 07:59:19 AM PST

  •  Capital Gains. (4+ / 0-)
    Recommended by:
    ybruti, TX Unmuzzled, mmacdDE, suesue

    When Obama says, "back to the Clinton rates", is he including the Clinton Capital Gains rates, too? That makes a difference as well.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Thu Dec 13, 2012 at 08:00:03 AM PST

  •  The deficit is a distraction, a kerfuffle designed (8+ / 0-)

    to cover up that the Congress has been derelict in the management of our currency.
    The federal government does not need to collect dollars to pay for things.  The federal government makes dollars.  The only reason to tax is to keep the dollars moving and counteract the propensity to hoard.

    We organize governments to deliver services and prevent abuse.

    by hannah on Thu Dec 13, 2012 at 08:05:59 AM PST

    •  Well... (3+ / 0-)

      That is all fine and good as long as everyone in the world likes your debt.  Not sure how long that would last if deficits get too big.

      Though deficits would shrink quickly if there were more people employed.  

      Unemployment == waste, fraud and abuse.

      by NCJim on Thu Dec 13, 2012 at 08:11:19 AM PST

      [ Parent ]

      •  The alternative to debt is theft. (1+ / 0-)
        Recommended by:
        bumbi

        As fewer people resort to theft, the level of debt is bound to increase. As the number of people who use official currency to record their debts increases, the level of recorded debt will increase.
        Imagine if everything every member of a household owed to everyone else were recorded in a register of dollar credits and debts. All would increase and never get paid off, until a person dies and all debts and credits are erased.

        Why are the Uncle Cons in a dither about debt? Because, at heart, they are thieves and resent the idea that anyone expects them to pay or even carry out the obligations of their positions.
        Obligation is a word unwelcome to a con's ears.

        We organize governments to deliver services and prevent abuse.

        by hannah on Thu Dec 13, 2012 at 08:23:01 AM PST

        [ Parent ]

        •  Hello to the confidence fairy (1+ / 0-)
          Recommended by:
          Tom Anderson

          our debt is serviced by bond holders, who have not sold off despite a nearly unprecedented economic crash in 2008 and even in spite of the debt ceiling debacle. Why? Because the U.S. economy will grow in the 5, 10, 20 year terms that bonds are serviced, which means good interest payments for bond holders.

          The confidence fairy is aptly named. Your lost baby teeth don't devalue because there are more children around. The nickles and dimes the rich pay to buy U.S. bonds aren't much different than the nickles and dimes the tooth fairy (aka your parents) left under your pillow.

      •  No need for debt (2+ / 0-)
        Recommended by:
        Remillard, Tom Anderson

        Being a sovereign nation means we simply 'print' what we need.

        Issuing T bills is an unnecessary left over from the gold standard era.  It serves no purpose now other than to give guaranteed security to the super wealthy.


        The Fail will continue until actual torches and pitchforks are set in motion. - Pangolin@kunstler.com

        by No one gets out alive on Thu Dec 13, 2012 at 09:30:27 AM PST

        [ Parent ]

        •  But The Fed is How We Avoid Inflation (3+ / 0-)

          Printing money would be a disaster. Instead, we create an artificial "asset" to sell in the form of Treasuries/IOU's. The Fed agrees to buy them at a discount (and others buy them as a store of money), and wah-lah, we have new money to finance deficits. It only gets dangerous as someone said above, if the non-Fed buyers back off because the debt is so high they lose confidence that the American economy will generate enough tax revenue to service the debt load. Right now there are no signs of that. But things can change and change quickly. There is no current crisis however, obviously. Rates are near zero.

  •  There you go again (1+ / 0-)
    Recommended by:
    suesue

    with that pesky math.  Geesh, pretty quick you will make it sound like Social Security is not really broke and then, to show the proof with actual numbers.  That damn pesky math shows again and again that numbers really do add up.  So then, I suppose you will then go on and on about how the new republican game plan is to scare the hell out of everyone with yet another false, misleading, crooked, cooked up scheme (mushroom cloud) to better their rich kings and princes.  

  •  It's not simply that SENIORS WOULD SUFFER (1+ / 0-)
    Recommended by:
    tobendaro

    Should Social Security be cut back.

    Right now, I run a struggling but somewhat successful publishing house. We re small, but we are growing.

    Who are our usual customers? Many "light workers": acupuncturists, Reiki healers, and others of that bent.

    Plus older people who live on pensions, plus Social Security and have the money  to buy their favorite metaphysical authors.

    Our third group of customers? People in China, who are becoming middle incomed and have an economic system  that doesn't force them to spend all their money on housing, and  on health insurance. This  means the Chinese now have disposable income. (The Chinese have a state run health program that includes medicinal herbs being paid for, and that includes acupuncture being paid for.)

    Cut back on Social Security or raise the age, and I suffer two ways - one: I am, hanging on to what little is left of my health, hoping I will last long enough to have MediCare at 65. (It would cost me about $ 1,100 a month for insurance for  the two of us, plus another 10,000 bucks in deductibles, were we to use the California insurance exchange. Basically, I'd have to spend our total yearly income (after business expenses) on payments to the Calif. Health Exchange Insurance, before the insurance would kick in and pay us one red cent!)

    Two: the book sales would immediately nose dive.

    Seniors who receive Social Security are paying for many things. They are the impulse buyers who send the five hundred dollar floral display to their grand daughters' wedding reception. They are the person who loans the other grand daughter the college tuition. They help another family member out with groceries and occasional rent or car payments. They buy the knick knacks, new shoes, and stuff from Etsy that keeps small time artists going.

    With the exception being the Ultra Rich, or recent inheritance beneficiaries,  the seniors on pensions and with Social Security are the only ones in our society with disposable income.

    As well as buying some of my company's books.

    Offer your heart some Joy every day of your life, and spread it along to others.

    by Truedelphi on Thu Dec 13, 2012 at 12:18:17 PM PST

  •  Under W we fought two wars off the books (2+ / 0-)
    Recommended by:
    suesue, JerryNA

    No wonder we have a deficit.

    What about War Bonds? Or surtaxes explicitly tied to the cost of the wars?

    One of the reasons they got away with the wars as easily as they did was that the American people (except the troops and their families, of course) did not have to face the costs of the wars.

    "When will our consciences grow so tender that we will act to prevent human misery rather than avenge it?"--Eleanor Roosevelt

    by KJC MD on Thu Dec 13, 2012 at 01:29:06 PM PST

  •  Cliff (0+ / 0-)

    We will go over the fiscal cliff because Republicans will NOT vote for any new taxes. What happens next is unknown.

  •  Krugman says that those two (painful, harmful) (1+ / 0-)
    Recommended by:
    This old man

    adjustments would reduce the federal deficit by a mere 3%. That's interesting. And that a marginal tax increase to 39.6% on income over $250K would raise $1.6T over ten years. That's interesting too. But what percentage of the deficit would $1.6T be? For comparison purposes.

    What I'd like to see is some kind of a chart that showed various proposals for reducing the deficit, and exactly how much of the deficit each proposal is estimated to reduce.

    An objectively-compiled chart for economic morons like me would be a very handy thing. I don't even know how many trillions the deficit is worth, or even exactly what the deficit is. It's not a part of my common sense understanding, and I need to rely on the opinions of others to get a glimpse of what (if anything) is actually at stake.

    How much does the USA owe, and why do we owe it, and to whom do we owe it? What would happen if we simply refused to pay it? Are there mafia-style enforcers who might break our kneecaps? If so, who and what are they? Or would default merely offend a communal sense of what is fair and equitable?

    It's all very confusing to the layman. There's plenty of political passion available, but information tends to be contradictory, wherein facts and figures obscure as much as they elucidate. Everyone's got an axe to grind, everyone's got something to prove.

  •  I don't have the numbers, but a transation (2+ / 0-)
    Recommended by:
    JerryNA, DeminNewJ

    tax on  each WS trade would raise a shit load of money. Another plus might be HFT slow down by a hand full of nano seconds.

  •  Screw it - let all tax rates go up (3+ / 0-)

    I don' t even want the tax cut.  If the deficit is so damn important let's let all taxes go up and get 4 trillion back.  We can then cancel the sequester and have no more cuts.  

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Thu Dec 13, 2012 at 07:01:51 PM PST

  •  Not too quickly please. (0+ / 0-)

    The Clinton administration drastically lowered debt which only made a big target for the fiscally improvising republic party to split up among their rich friends.  I would love to see less spent on interest for the rich investors, but feel we were burnt by saving up money to be squandered.

  •  Stop campaigning. We won. Enough with propaganda. (0+ / 0-)

    Housing bubble? Anyone? Talk of recession and deficits without mention of the housing bubble is pure adulterated campaign talk. Btw, how does 116 billion this year make serious dent to one trillion deficit? Forget the deficit and forget raising taxes until job creation / economy recovers. No one is laying off workers because of the deficit yet the same cannot be said of taxes. No one needs their taxes raised this term of office. Eventually, everyone's taxes will rise, but this focus on $250k is inconsequential and looks like a fools errand when it comes to deficit reduction and benefit preservation.

    "If the past sits in judgment on the present, the future will be lost." Winston Churchill

    by Kvetchnrelease on Fri Dec 14, 2012 at 04:59:16 AM PST

    •  What propaganda? I know the diarist (2+ / 0-)
      Recommended by:
      Kvetchnrelease, DeminNewJ

      is suffering a bad case of "rose-iris" but how is advocating for raising taxes "propaganda?"

      Not only do people with taxable income above $250,000 need their taxes raised, people whose taxable income is much less than that do, too. My bracket, for example, would put me around $120,000/yr taxable income. Raise my taxes! Go ahead! I can afford the extra $300-$600/yr it will cost (if it's even that much) when my marginal rate goes up, and so can everybody else in my family's income bracket and deduction profile. You know what I'll do if my taxes go up? I'll pay $30-$50/mo less toward servicing my debt. That's it. I won't save less. I won't spend less. And nobody else (or a vanishingly small, trivial and inconsequential number) in my social strata will spend or save less, either.

      At worst a tax increase on me is economically neutral because of that. At best, the added federal revenue will help fund stimulus and other programs for the victims of the last 3-4 decades' of robber-baron style wealth transfer from the have-nots to the haves that has run rampant in this country.

      You know what I'd like to see? I'd like to see my taxes go up and the proceeds fund a government-run plan to buy out, at a forced cramdown repayment, all the mortgages in predominantly minority communities who were the victims of racist loan and other finance predation. And I would love it if people who earned more--and especially who worked for companies that engaged in said predation--had to contribute. I would especially love it if they were viscerally opposed to that contribution. Every angry reaction and gnashing of teeth would make my smile bigger. Fuck. Them. Period.

      •  Yes, everyone's taxes need to go up a bunch, not (0+ / 0-)

        just the $250k crowd. Keep the rates just eliminate the deductions and credits.

        "If the past sits in judgment on the present, the future will be lost." Winston Churchill

        by Kvetchnrelease on Fri Dec 14, 2012 at 07:03:01 AM PST

        [ Parent ]

        •  No, eliminating deductions has a high potential (0+ / 0-)

          for being regressive.

          I'd be thrilled if deductions were further moderated on a progressive scale.

          Regardless, rates must rise.

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