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Someone please explain to me how the recent rejected Bush tax cuts for the middle class


atlvicktim08
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Maybe there is something I'm not seeing here, I'm a pretty intelligent guy but maybe I'm missing something here. Recently as we all know, the expiring Bush Tax Cuts proposal for the middle class only, was rejected in the Senate by the Repubs. Now I'm not trying to get into a Dems vs Repubs discussion, cause they both have points I agree and disagree with, but the reasoning for the logic of rejecting the Bush tax cuts was because it was not all inclusive excluding the top 2% of earners and also primarily small business owners will see a increase in taxes during these hard economic times.

Am I missing something here, the threshold for the increase of taxes for the top 2% is 250k+. I'm sorry, if you look at any recent data, statistics, SBA info, go to payscale.com, wikipedia, whatever, most small business owners don't even make anything close to 250k a year; they're considered the middle class along with the majority of us. They're called SMALL business owners not only because they have less than 500 employees but also because of their salaries they intake. Granted, many variables come into play when you talk about salaries of small business owners such as industry, location, etc.. but their average income in the US ranges from 60k to 150k; even in New York if your very successful the average high-end salary is 200k, well below the threshold for tax increases. There are exceptions to every rule and there are some small business owners who are in fact millionaires, but easily 80%-90% of small business owners don't even come near a 250k salary per year which doesnt stand logic as to why not to extend tax cuts for the 98% and I guess for now increase taxes for the remaining 2%.

And lastly, the other fallacy, I mean logic, for not extending tax cuts is that if 100% of Americans can't have tax cuts, then no one can have a tax break. Really, does that make any sense to anyone, so if 98% of people will benefit from something, you reject it because it's not 100%, I think that's called a zero-sum fallacy, all or nothing in other words, which doesnt make any sense. Then people have said if the upper 2% will get tax increases, they will take jobs away, stop spending their money, and stop hiring. The Bush tax cuts, which he did get right, was signed into law in 2003, however as we can see tax cuts for the wealthy doesn't stop jobs being taking away, been there done that, won't stop a recession from occurring, been there done that too, and it won't impede the reluctance to hire, still there. So what's the problem?

Can someone with far greater intelligence than I, explain in laymen terms, why reject the proposal under this reasoning, or maybe it's something that just flew over my head.

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Both sides are playing political games. Of course Repubs want the tax cuts extended but they want them extended for everybody. Dems don't. So the Dems tried to force a vote on extending the tax cuts that wasn't all-inclusive and Repubs said no. Now Dems can point a finger at Repubs and say they are blocking the tax cuts. It's political football and hopefully their little game will end before the end of the year and we'll get the Bush tax cuts extended.

It's kinda like the NFL vs NFLPA. Somebody's gotta cave in, somebody's gotta compromise...or we're all screwed.

This is the problem with the national dialogue. Anything boils down to "playing political games", so one side can play games while accusing the other side of that which they're doing.

It's actually very simple to understand what is going on with the tax cuts. Democrats have an overwhelming majority in both Houses until January. In a functioning democracy, the majority party gets to set government policy as long as that policy is constitutional. Since nobody believes tax rates are unconstitutional, the Democrats should have a fair chance to set the rates they want.

Democrats want tax cuts for the lower/middle class and want the cuts to expire for the upper class. Republicans want tax cuts for everyone. Democrats put a bill on the floor of the House expressing their desires. Democrats vote for it; Republicans vote against it. Fair enough. No political games here.

Now the bill goes to the Senate, where Dems have a majority. The problem is that Republicans will use an arcane procedure to prevent a simple vote on the bill itself. They are the minority and yet because of this stupid procedure they have the authority to set tax rates. The minority party has the power to impose its policy desires on the majority. Now Republicans are playing political games, saying that they won't allow a vote on extending any tax cuts if they can't get their specific policies enacted. Voting against a Democratic bill is not playing political games; preventing any vote at all in order to get everything Republicans want is playing political games.

In a functioning democracy, the Democrats would get to set the tax rates this year. The Republicans, when they take over the House, are then free to pass an extension for all Americans. They have to work with the president and the Senate, but in the House they can pass their legislation when January rolls around. That's how a functioning democracy works. And that's why American government is a complete and utter disfunctional mess right now. If Democrats become a minority party, then they're going to be playing the same political games that Republicans are playing now. The problem is the process and the institutions. They're broken and it's screwing up our country.

Edited by AcworthFalcFan
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So you agree with me. OK.

Uh, no. You might trying reading the post instead of selectively editing it.

You said that voting for or against legislation is "playing games". For me, that's democracy. Using the filibuster at unprecedented rates to create a system where anything requires 60 vote is playing political games and is destroying our political system.

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Another question to ponder is when did continuing the same tax rates become a "tax cut"? Only in politics can you claim to have done something for somebody by not really doing anything for them.

It's simple. The current law sets the upper tax rate next year at 39.5%. The Republicans want a new law that sets that rate at 35%. That is a tax cut.

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Here's the line of thinking...

Yes, you are correct, most small businesses don't make $250k or higher. But the really successful ones do, aka the ones that are growing and expanding and hiring people. So it would be prohibitively impacting the ones that are most likely to create jobs.

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It's simple. The current law sets the upper tax rate next year at 39.5%. The Republicans want a new law that sets that rate at 35%. That is a tax cut.

The current law provides the rates as they are today. It happens to have a sunset on it (8 years), which is part of thousands of laws and budget programs on the books. Letting it expire is creating a tax increase. They're simply stopping a tax increase not creating a tax decrease, not just for the group above, but for all tax brackets.

Think of it this way. If this were a defense budget program that added $50 million funding to a project each year for the past 3, and this year they continued to approve it, is that an increase in their funding, or a continuation of existing programs? If they were to not approve it, wouldn't that be cutting their funding?

However, I will say that the reduction in payroll tax by 2% IS a tax cut.

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The current law provides the rates as they are today. It happens to have a sunset on it (8 years), which is part of thousands of laws and budget programs on the books. Letting it expire is creating a tax increase. They're simply stopping a tax increase not creating a tax decrease, not just for the group above, but for all tax brackets.

Think of it this way. If this were a defense budget program that added $50 million funding to a project each year for the past 3, and this year they continued to approve it, is that an increase in their funding, or a continuation of existing programs? If they were to not approve it, wouldn't that be cutting their funding?

However, I will say that the reduction in payroll tax by 2% IS a tax cut.

Yes, current low provides the rates as they are today AND as they will be next year. Current law says that the rates next year will by 39.5%. The Republicans wrote the sunset for a reason--THEY DIDN'T WANT THE RATE TO BE 35% NEXT YEAR. Now, in a complete reversal, Republicans want the rate to be lower than the law they wrote. They want to cut rates lower than what the current law states they will be. A tax cut.

To use your analogy in a more appropriate setting, suppose Democrats wrote a law that say a program would receive $50 million this year, $55 million next year, and $60 million the third year. Now suppose that next year Republicans write a new law setting the funding level at $50 years for the next two years. That is a cut in funding from what the current law specifics. A spending cut.

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Yes, current low provides the rates as they are today AND as they will be next year. Current law says that the rates next year will by 39.5%. The Republicans wrote the sunset for a reason--THEY DIDN'T WANT THE RATE TO BE 35% NEXT YEAR. Now, in a complete reversal, Republicans want the rate to be lower than the law they wrote. They want to cut rates lower than what the current law states they will be. A tax cut.

To use your analogy in a more appropriate setting, suppose Democrats wrote a law that say a program would receive $50 million this year, $55 million next year, and $60 million the third year. Now suppose that next year Republicans write a new law setting the funding level at $50 years for the next two years. That is a cut in funding from what the current law specifics. A spending cut.

You're going to argue yen and yang on this, and it appears it isn't going to compute with you, even with your analogy. However, at least acknowledge that all rates for all brackets were going to expire, thus all rates were going to rise, from the lowest (from 10% - 15%) to the highest (from 35% - 39.6%). That's simply a fact. A new bill was going to have to pass to continue the rates as is (no increase/no decrease) or all parties were going to see an increase. Politically parsing that to who would or wouldn't see an increase doesn't change the facts of the situation that everyone would have a tax INCREASE if a new legislation were to not occur.

And do you really believe that after 9/10 years people were thinking, "Oh, I'm just going back to the rates I used to be paying, no big deal" or would it be viewed as a tax increase on the poor and middle class, had the rates been allowed to step up?

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You're going to argue yen and yang on this, and it appears it isn't going to compute with you, even with your analogy. However, at least acknowledge that all rates for all brackets were going to expire, thus all rates were going to rise, from the lowest (from 10% - 15%) to the highest (from 35% - 39.6%). That's simply a fact. A new bill was going to have to pass to continue the rates as is (no increase/no decrease) or all parties were going to see an increase. Politically parsing that to who would or wouldn't see an increase doesn't change the facts of the situation that everyone would have a tax INCREASE if a new legislation were to not occur.

And do you really believe that after 9/10 years people were thinking, "Oh, I'm just going back to the rates I used to be paying, no big deal" or would it be viewed as a tax increase on the poor and middle class, had the rates been allowed to step up?

All of the rates for all of the brackets were going to be exactly what they were set at by law 8 years ago. A new bill would require extending the cuts beyond what current law specified so that people next year will have the tax cuts they got last year. It doesn't matter what people think; they knew the rates were set to expire.

This whole thing is political gamesmanship by the right. Create tax cuts, but don't make them permanent. Instead, wait 8 years and attack Democrats for wanting to "increase taxes". If the expiration of tax cuts was a "tax increase" (and it's not), then it was the Republicans who increased people's taxes and the Democrats who lowered them. But I don't hear you whining about how Republicans "raised our taxes" eight years ago, proving that it's a bunch of partisan silliness.

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All of the rates for all of the brackets were going to be exactly what they were set at by law 8 years ago. A new bill would require extending the cuts beyond what current law specified so that people next year will have the tax cuts they got last year. It doesn't matter what people think; they knew the rates were set to expire.

This whole thing is political gamesmanship by the right. Create tax cuts, but don't make them permanent. Instead, wait 8 years and attack Democrats for wanting to "increase taxes". If the expiration of tax cuts was a "tax increase" (and it's not), then it was the Republicans who increased people's taxes and the Democrats who lowered them. But I don't hear you whining about how Republicans "raised our taxes" eight years ago, proving that it's a bunch of partisan silliness.

Congress couldn't make them permanent 9 years ago. Guess what, they still can't make them permanent. It was a political problem then which led to a compromise, and it's happening again. And I hate to tell you this, but it's political gamesmanship by EVERYONE, which was my original point. You're trying to make it about the Republicans/right, when it's about ALL of them. The ideological line is set at believing one group warrants an increase, while others shouldn't.

Your last sentence about "raising our taxes 8 years ago" makes zero sense to me. Those rates had been in place since 93 or 94 as I recall. However, by your logic, they haven't passed a COLA increase for Social Security for 2015, therefore I should say that the Democrats are looking to cut Social Security funding.

Edited by ATL Bear
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Congress couldn't make them permanent 9 years ago. Guess what, they still can't make them permanent. It was a political problem then which led to a compromise, and it's happening again. And I hate to tell you this, but it's political gamesmanship by EVERYONE, which was my original point. You're trying to make it about the Republicans/right, when it's about ALL of them. The ideological line is set at believing one group warrants an increase, while others shouldn't.

Your last sentence about "raising our taxes 8 years ago" makes zero sense to me. Those rates had been in place since 93 or 94 as I recall. However, by your logic, they haven't passed a COLA increase for Social Security for 2015, therefore I should say that the Democrats are looking to cut Social Security funding.

And once again, you're flat wrong on the facts. They absolutely could have made the tax cuts permanent and they absolutely still can--IF they can get 60 votes to overturn the Byrd Rule. The sunset provision was purely a way to bypass the Byrd Rule.

I don't know why you don't understand the point about raising taxes. The Bush tax cuts lowered rates from what they were in the 1990s (so no clue what your point is there). The law that the Republicans passed set tax rates to increase in 2011. It was the Bush/Republican legislation that raised the rates, and it's the Democrats who are trying to lower them again. In fact, contrary to your factually false claim above, the Democrats wanted to make the middle/lower class tax cuts PERMANENT. The Republicans filibustered that legislation, so here we are.

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And once again, you're flat wrong on the facts. They absolutely could have made the tax cuts permanent and they absolutely still can--IF they can get 60 votes to overturn the Byrd Rule. The sunset provision was purely a way to bypass the Byrd Rule.

I don't know why you don't understand the point about raising taxes. The Bush tax cuts lowered rates from what they were in the 1990s (so no clue what your point is there). The law that the Republicans passed set tax rates to increase in 2011. It was the Bush/Republican legislation that raised the rates, and it's the Democrats who are trying to lower them again. In fact, contrary to your factually false claim above, the Democrats wanted to make the middle/lower class tax cuts PERMANENT. The Republicans filibustered that legislation, so here we are.

John McCain and a contingent of Democrats fought the legislation in 2001, and didn't allow them to be permanent, ala the compromise, even though McCain voted against the legislation. And yes, the Byrd rule is the procedural mechanism to do so, just like it was used to stop the passage of the extension for all brackets except the top one this time around.

And what about the term "expire" do you not understand? There weren't new tax rates for the period beyond 2010 in the 2001 bill, it simply sunset the legislation, thus requiring it to revert to previous rates in place. What you're saying is that because they didn't poo poo the compromise and lose the vote for making them permanent, this legislation somehow is a tax raise????? That makes absolutely no sense.

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