Dean is right on the tax cuts

[dsc]

There has been lots of talk about the tax cuts and which is the best strategy to deal with them. Some wish to only appeal the tax cuts for the rich while others wish to repeal them all. This is a case for repealing them all.

First, some basic facts on the deficit. The current deficit is $480 billion according to the White House (which has yet to provide a figure which hasn't proven to be too low). That doesn't include the around $100 billion in Iraq costs, the over $100 billion in SS surplusses, nor the middle class tax cuts not being phased out. Thus if we don't kill the middle class tax cuts the deficit is more like $680 billion plus the cost of the middle class cuts. That also doesn't include a dime for health care.

Second, History has shown that we can't have all three of the following at any one time. High deficits, economic growth, and low interest rates. Both of the first two increase demand for money. The third can be considered the price of money. As demand for something goes up so does its price. Thus if we have the first two things then we can't have the third.

Third, High interest rates transfer wealth from borrowers to lenders. Middle class and the poor are the borrowers and the rich are the lenders. Thus high interest rates are a massive regressive tax on the country.

Here is an illustration. On Marketplace tonight there was a report about home buyers losing low rates due to not getting them locked in on time. Mortgage rates have risen by 1.5% in 6 weeks. Let me repeat that mortgage rates have risen by 1.5% in 6 weeks. This on the news of economic growth of 2.4% in the second quarter (Clinton routinely managed over 3%). For the couple in the story that translated to $250 a month ($3000 a year) in extra payments. The piece didn't say the price of the house. But on a $200,000 house it would be an extra $81,088.50 over 30 years which is barely over $2,700 a year. Most people would consider a 200k home to be at most upper middle class. A 100k home would cost $1,350 a year more and is by no means a mansion. That is money which does nothing but enrich lenders who are themselves already rich. It doesn't build one school, insure one child, hire one cop, or pave one road.

Even using what I consider to be both inflated and dishonest figures that the average middle class family got $2000 a year from this cut, it is entirely wiped out if they own a home with a value of just under $150,000. That doesn't count any of the other things that have wiped the cut out, such as increased state taxes, increaded interest on car loans, credit cards, and other loans, and decreased government services.

The genius of Clintonomics was that he gave the middle class a defacto tax cut of hundreds a month. Dean gets it. Those who won't repeal these cuts don't.

[unblock]

1. the cuts should not be repealed ... not exactly, anyway

instead, the wise democratic candidate should direct anger at the bush cabal for embezzling and looting by saying that the public got ripped off and we demand our money back.

then you pass yet another tax CUT, albeit a small one, that benefits the lowest 60-70% of the public. my favorite way is to scale back the payroll tax and make up the difference with proceeds from the income tax.

and how do we pay for this modest cut? by nailing the rich. finally we have an effective counter to the 'soak the rich' whiners, namely, that the rich didn't earn the money this time 'round, they got it from a tax cut we couldn't afford and from fraud and cronyism.

under clinton, everyone figured the likes of bill gates and larry elison earned their fortunes.

under bush, we know the likes of ken lay and halliburton did not.

the public will not object to soaking the rich this time, as long as it's combined with a tax CUT for more people than face a tax hike.

[Abe Linkman]

2. Well, we won't get fooled again, will we? Or did we?

"under clinton, everyone figured the likes of bill gates and larry elison earned their fortunes."

Neither company paid more than a relative pittance in corporate income tax, though.

[dsc]

3. Under the ATM

I don't think that is true. Do you have a citation?

[Pavlovs DiOgie]

4. Thanks

for building my arsenal of pro-Dean arguments! You should send this to the Dean campaign...I think it's a great selling point for a very important topic. :yourock:

[dsc]

5. Thanks I will do that

eom

[burr]

6. Dean's argument is necessary for a mandate.

Compromising and the specific changes can come later.

But this will only happen with the popular groundswell that brings us a Democratic Congress as well. Even with the best margins, Democrats would not control the margins that they did when Clinton was in office. Dean already knows it will be difficult to repeal shrub's taxcuts, and that some compromise is likely. But if he starts out with the Kerry mandate or the Lieberman mandate, then what else must be given up?

Reaching an agreement to reduce the deficit will be hard enough, how much more difficult will this be without achieving the repeal most of these taxcuts? On top of this, it will probably take additional increases in tobacco and alcohol taxes to fully fund Dean or Kerry's healthcare proposals.

Compromise and moderation sound great, but we should only do this after all other options are exhausted.

[dsc]

7. That is also an excellent point

We all but certainly won't have a Democratic House and are fairly unlikely to have a Democratic Senate. Even with one it will be hard to do what we need to do.

[Eloriel]

8. That's an insightful observation!

"necessary for a mandate" - I like that.

One mandate coming up! :evilgrin:

Eloriel

[sandnsea]

9. Compromises and changes?

Tobacco and alcohol tax increases?

Surprise the people with new taxes just like Democrats always do?

We have to say what we mean and mean what we say. Especially on taxes.

[dsc]

10. We aren't electing

a supreme ruler of the universe. Yes, the President will have to compromise with Congress. Even if your candidate, whomever that is, gets elected he or she will have to compromise.

[sandnsea]

Disagree

I've alread posted two links about Howard Dean and his tax cuts. Here's one another one that actually uses the words Bush tax cuts for you. That's number one.
http://www.txtriangle.com/archive/1049/coverstory.htm

TT: You’d reverse Bush’s tax cut, I gather…

Dean: Not all of it, almost all of it…

And you don't tell everybody they're going to share the tax burden as they had before and then turn around and say something different once you're in office. Of course there has to be compromise, but promising something that you have absolutely no intention of delivering is something quite different.

How can 2 drunks disagree on everything? Never thought I'd see the day!

[burr]

11. This is why you run on a mandate for a complete repeal of taxcuts...

people will more easily forgive this type of compromise, than they would new tax increases or an increase from a candidate running on middle class tax cuts.

Consistency is on a mandate or a comman theme is more important than compromises on specifics. What voters get most pissed about is wobbling on the main objectives or message!

[AP]

13. Krugman says...

just tying up these two threads...

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=104&topic_id=273735&mesg_id=273735&page=

[burr]

14. Maybe you have already been asked this...

but if you agree with Krugman, why support Edwards? :shrug:

[AP]

16. Because I think Edwards is the only candidate articulating

a progressive tax system argument, and the stuff he proposes to fix the economy is, in spirit, the closets to FDR -- ie, it's all about spreading wealth and opportunity down to the middle and working class, and then letting them stoke the economy. It's also hostile to corporate hegemony in the same way FDR was.

[sandnsea]

17. Answer me something

How does he plan to enforce a law requiring every parent to insure their child? That one just stops me in my tracks. There were a couple of other things Edwards said that kind of soured me, danged if I can remember them right now. I could easily go for Edwards, he's such a likeable and sincere person. And I'd like to see him take on Bush or Cheney, actually Cheney a bit more. The corporate lawyer and the greedy CEO. Oh, I would literally pay good money to see that!!

[AP]

18. If I had to guess, it's going to be similar in spirit and character

to legal requirements to have your child innoculated. And it's like a funded mandate. The law is that they have to be insured, so the obligation is on congress to make sure there's something available to everyone, whether it's through a medicaid/medicare like program, or through a tax break. And he's going to require insurance companies to offer these plans to people.

[burr]

19. But Edwards isn't backing a top 90% tax bracket...

I don't hear a New Deal, a WPA, or a renewal of our safty nets being pushed by Johnny. FDR did not run as a DINO in favor of tax credits, tax cuts, while halfway protecting some of Hoover's policy's.

By the way, the only Democrat not support a Progressive tax structure is draftcandidateTraficant.

<http://www.freetraficant.com/>

[AP]

20. He proposed a two tiered cap gains rate

which introduces a great deal of progressivity that is absent now. That's the one concrete thing that he's talking about that I remember off the top of my head, and he talks about progressivity all the time -- it's an absolutely intrinsic part of his message, and his identity.

Several of his programs are very much in the spirit of new deal programs -- using public money to lay down an infrastructure which will reap public (and private) benefits down the road. The education program (one year free) is from the same gene pool as the GI Bill. Investments in rural communities is another.

Also, DINO? Where the hell did you get that? If you're talking about the war, remember that many (falsely) accused FDR of allowing Pearl Harbor, and I'm sure many believed it. FDR wasn't really a dove. And, as for everything other than war, Kucinich and Edwards are the only two running who can say that they have organized their entire lives around the principle of transferring the ill-gotten wealth of large, negligent corporations back to the people they took it from. Since, in my mind, this is the most significant fault line between R and D, I have no idea how Edwards could be called anything but a dyed in the wool Democrat.

[AP]

21. Incidentally, since this is a dean thread, I have a question

Usually when a candidate comes up with a good, concrete plan, the other candidaates try to match it. After Edwards proposed the two-tier cap gains rate, you'd think that Dean would feel compelled to come out with his own doff of the cap to progressivity.

however, the only thing I've heard from Dean is that the tax code is too messy (which I usually hear from Republicans who want to take away EIC, and other nice credits and deductions for the poor as a first step to a "less comlicated" flat tax). He hasn't said anything that is remotely as concrete as Edwards's proposal. And he won't let the middle class keep their tax cuts either. Where the hell does he stand on progressivity. Anyone know?

[unfrigginreal]

12. "We have to say what we mean and mean what we say"...

you mean like Kerry...voting against the Bush tax cuts but claiming that anyone that wants to repeal them would be "raising taxes"?

[sandnsea]

15. No

Like fighting like hell to get them in there to help as many people as possible since the package was going to pass, but still saying the whole concept is really a bunch of shit. And then continuing to fight for those same taxes because if they aren't important, why'd he try so hard to get them in the tax bill in the first place?

Aagh.

[unfrigginreal]

22. In other words we should all become COMPROMISERS!

n/t