I know alot of people are concerned about the unemployment benefits expiring so therefore think they need to side with the president on this HUGE tax cut and spending bill. Not only does MoveOn believe the #1 problem is the cut in payroll tax, making it a trap for Democrats, I think the whole damn thing is a trap. I do not buy the argument the bill is the best Democrats could get from those Republicans. I believe the worst parts of this legislation won't be felt immediately, but rather in the near future as the GOP continues their fight to make the tax cuts permanent and their plan to destroy Social Security. This is not 2003, I don't know if the will of the people can actually fight the evil machine that is the Republican Party. That's my opinion and I'm comfortable with it....
Problem #1: The deal is a stealth attack on Social Security.The deal will lower the payroll tax—the tax that funds the Social Security trust. This is a trap for Democrats. Republicans have been coming after Social Security for years and this cut is the biggest threat to the vital program in decades. It will cut one-third of Social Security's funding this year alone and when we need to restore the payroll tax back to its current level, Republicans will cry "tax increases" and could gut it permanently. 1
Problem #2: For nearly one in three workers, it's a tax increase.Nearly 50 million working Americans—including all workers making less than $20,000 per year—and millions of federal, state, and municipal workers will see their taxes go up because of the deal.2
Problem #3: The deal has not one but TWO millionaire bailouts.In addition to extending all the Bush income tax breaks for the top 2%, the deal will slash the estate tax. If Congress did nothing, next year the estate tax would be 55% and apply to everyone inheriting $1 million or more. But the deal reduces it to 35% and only people who inherit more than $5 million will have to pay. This second bailout will give a gigantic tax giveaway to a few thousand of the richest families in the country and add hundreds of billions to the national debt.3
Problem #4: Unemployment help is insufficient and inadequate.While the deal extends unemployment benefits for another 13 months for people currently receiving it, millions of unemployed workers who've struggled the most and been out of work more than 99 weeks—since the giant Wall Street banks wrecked the economy—will get no help at all under the deal.4 It's a gamble that there will be jobs in the next 13 months when the insurance runs out, but the tax cuts will go well beyond that. Better to just pass a stand-alone unemployment extension to help all struggling Americans.
Problem #5: Tax giveaways to the rich are a terrible way to create jobs.Tax breaks for the rich are the least efficient way to create jobs and help the economy grow. In fact the nonpartisan Congressional Budget Office says extending all tax cuts would lower unemployment only 0.1% to 0.3% over the next year5 and that the cost of the tax deal would be $900 billion over the next five years.6
Sources:
1."Tax Cut Deal A Hidden Threat To Social Security" The Huffington Post, December 8, 2010
http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html
2. "Obama-Republican Deal Could Mean Tax Hike For One In Three Workers" The Huffington Post, December 10, 2010
http://www.huffingtonpost.com/2010/12/10/obamarepublican-deal-coul_n_795187.html
3. "Estate tax deal: worst part of a bad tax compromise" The Christian Science Monitor, December 7, 2010
http://www.csmonitor.com/Business/Tax-VOX/2010/1207/Estate-tax-deal-worst-part-of-a-bad-tax-compromise
4. "Unemployment benefits: Extension won't help '99ers'" The Christian Science Monitor, December 7, 2010
http://www.csmonitor.com/Business/Latest-News-Wires/2010/1207/Unemployment-benefits-Extension-won-t-help-99ers
5. "The Deal" Paul Krugman, The New York Times, December 7, 2010
http://krugman.blogs.nytimes.com/2010/12/07/the-deal/
6. "CBO score shows tax plan ups deficit $900 billion in 5 years" CNN.com, December 10, 2010
http://articles.cnn.com/2010-12-10/politics/tax.plan_1_tax-cuts-tax-plan-bush-era-tax?_s=PM:POLITICS
UPDATE; From CBS news:
The Senate passed the tax bill today,
The first priority for many Democrats who want to alter the bill is changing the estate tax provision in the bill. The president agreed to a request from Sen. Jon Kyl (R-Ariz.) that would allow estates worth up to $10 million to be exempt from paying any taxes at all with estates worth more taxed at just 35 percent.
House Democrats passed a bill a year ago that would exempt estates only up to $3.5 million and taxing them after that at 45 percent and they are fighting to insert that language into this bill. Rep. Chris Van Hollen (D-Md.) is leading the effort to change the Senate provision. He calls it "egregious" and says that it won't create jobs and adds "15 billion dollars to the deficit and benefits just 6,600 families a year." Rep. Earl Pomeroy (D-N.D.), who offered the amendment, says he think it will get a vote.
But now Democrats also want to change other items that were supposed to be sweeteners for Democrats like the 13 month extension of unemployment benefits and the two-year payroll tax holiday that cuts everyone's social security taxes by 2 percent.
On unemployment insurance, Rep. Elijah Cummings (D-Md.) says that it should be extended from 13 months to two years so that it is not seen as less important than the two-year extension of tax cuts for the wealthy. He admitted last night after talking with the president over the phone that it's a delicate balance.
"Right now it's a question of how much can be changed without ruining the president's efforts to get this thing through" Cummings said.
On the payroll tax holiday, members like Rep. Lloyd Doggett (D-Texas) argue that the one-year payroll tax holiday would force the government to borrow money to make up for the losses in the Social Security Trust Fund, that the tax cut would likely never expire and that it would jeopardize Social Security's solvency. "I plan to present an amendment asking that the payroll tax provision is stricken from the bill" Doggett said.
If any of the amendments or changes pass the House, the bill would have to pass the Senate again and its passage could be in doubt just over two-weeks from all the Bush tax cuts for the wealthy and the middle class expiring.
While the loudest Democrats oppose many of the provisions in the Senate-passed bill, there is support for the measure among fiscally conservative Blue Dog Democrats. Thirty-one House Democrats sent a letter to Speaker Nancy Pelosi last night asking her to quickly schedule a vote, put aside partisan differences, and "act to send it directly to the president's desk without delay."
If those members vote against changing the tax bill, along with most Republicans, it will be very difficult for House Democrats to change the bill.
Opposition among Republicans also mounted today, with Rep. Mike Pence (R-Ind.) heading to the House floor first thing to announce his opposition to the package. His objection? That unemployment insurance provisions are unpaid for and that the tax cuts are not permanent so they will not help businesses plan.
"Uncertainty is the enemy of our prosperity" Pence said. "Frankly, we can provide assistance to people struggling in this economy by making the hard choices to pay for it without adding to the national deficit."
Pences' statement made me (((((shudder))))
http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html
2. "Obama-Republican Deal Could Mean Tax Hike For One In Three Workers" The Huffington Post, December 10, 2010
http://www.huffingtonpost.com/2010/12/10/obamarepublican-deal-coul_n_795187.html
3. "Estate tax deal: worst part of a bad tax compromise" The Christian Science Monitor, December 7, 2010
http://www.csmonitor.com/Business/Tax-VOX/2010/1207/Estate-tax-deal-worst-part-of-a-bad-tax-compromise
4. "Unemployment benefits: Extension won't help '99ers'" The Christian Science Monitor, December 7, 2010
http://www.csmonitor.com/Business/Latest-News-Wires/2010/1207/Unemployment-benefits-Extension-won-t-help-99ers
5. "The Deal" Paul Krugman, The New York Times, December 7, 2010
http://krugman.blogs.nytimes.com/2010/12/07/the-deal/
6. "CBO score shows tax plan ups deficit $900 billion in 5 years" CNN.com, December 10, 2010
http://articles.cnn.com/2010-12-10/politics/tax.plan_1_tax-cuts-tax-plan-bush-era-tax?_s=PM:POLITICS
UPDATE; From CBS news:
The Senate passed the tax bill today,
The first priority for many Democrats who want to alter the bill is changing the estate tax provision in the bill. The president agreed to a request from Sen. Jon Kyl (R-Ariz.) that would allow estates worth up to $10 million to be exempt from paying any taxes at all with estates worth more taxed at just 35 percent.
House Democrats passed a bill a year ago that would exempt estates only up to $3.5 million and taxing them after that at 45 percent and they are fighting to insert that language into this bill. Rep. Chris Van Hollen (D-Md.) is leading the effort to change the Senate provision. He calls it "egregious" and says that it won't create jobs and adds "15 billion dollars to the deficit and benefits just 6,600 families a year." Rep. Earl Pomeroy (D-N.D.), who offered the amendment, says he think it will get a vote.
But now Democrats also want to change other items that were supposed to be sweeteners for Democrats like the 13 month extension of unemployment benefits and the two-year payroll tax holiday that cuts everyone's social security taxes by 2 percent.
On unemployment insurance, Rep. Elijah Cummings (D-Md.) says that it should be extended from 13 months to two years so that it is not seen as less important than the two-year extension of tax cuts for the wealthy. He admitted last night after talking with the president over the phone that it's a delicate balance.
"Right now it's a question of how much can be changed without ruining the president's efforts to get this thing through" Cummings said.
If any of the amendments or changes pass the House, the bill would have to pass the Senate again and its passage could be in doubt just over two-weeks from all the Bush tax cuts for the wealthy and the middle class expiring.
While the loudest Democrats oppose many of the provisions in the Senate-passed bill, there is support for the measure among fiscally conservative Blue Dog Democrats. Thirty-one House Democrats sent a letter to Speaker Nancy Pelosi last night asking her to quickly schedule a vote, put aside partisan differences, and "act to send it directly to the president's desk without delay."
If those members vote against changing the tax bill, along with most Republicans, it will be very difficult for House Democrats to change the bill.
Opposition among Republicans also mounted today, with Rep. Mike Pence (R-Ind.) heading to the House floor first thing to announce his opposition to the package. His objection? That unemployment insurance provisions are unpaid for and that the tax cuts are not permanent so they will not help businesses plan.
"Uncertainty is the enemy of our prosperity" Pence said. "Frankly, we can provide assistance to people struggling in this economy by making the hard choices to pay for it without adding to the national deficit."
Pences' statement made me (((((shudder))))
