Question: The Bush Tax Cuts

[SoFlaJet]

What are the chances that they are allowed to go away? The tax and spend republicans are OK with the 3 trillion that they will cost-the democrats better not cave in on them.

[vi5]

1. There is no chance they will go away...

Republicans will never let them go away, and every single person in a position of authority in the Democratic party are gutless wonders more concerned with their own financial interests than in what is best for the country.

[JoePhilly]

2. The chance are very high ... this is why.

1) The congress will not be able to pass and extension. Boehner's House could pass a bill. But it never makes it to the floor in the Senate.

2) The expiration dates is after the election, but before the next President's term starts. If Obama wins, he let's them expire. If he loses, he still let's them expire.

If he had let them all expire previously, the media would have run endless ads of how he broke his promise to not raise taxes on those UNDER 250k. Contrary to convention DU wisdom, the majority of those under 250k did not want their own taxes to go up. They want the taxes of only the rich to go up. So if he broke the "no tax increase for those under 250k, he's a one term President".

He has no such pressure this time.

[RickFromMN]

4. Sound reasoning. One question though. What happens the next time we need the debt limit raised?

I expect the Republicans will use the debt limit like they did the last time.
I honestly don't expect the Democrats to cave a second time.
I honestly don't know the consequences when the United States goes into default.

[JoePhilly]

7. I hear you ... I think ..

that the Dems won't cave next on debt ceiling either.

The GOP and the Tea Party took the larger hit on that last time ... and the business community that the GOP must defend was not happy about what the Tea Party / GOP did last time because not raising the debt ceiling will hurt.

The GOP is going to have to scramble now I think.

The % of folks who don't recognize their endless obstruction seems to be getting smaller, and might sink down to being only the tea party.

[TheWraith]

20. The solution to that is to elect a Democratic House next year.

Thus negating the problem of another debt limit standoff.

[grantcart]

24. Obama also boxed the Republicans in on this as well

The debt ceiling is good until after the election.

After the election the Republicans will be the ones that want to raise the debt ceiling because the last episode caused about a 14% decline in the stock market and the monied class got soaked for a political stunt.

With the election out of the way the Republicans will want to keep the markets quiet and steady, there will be no political incentive for them to repeat the last episode until they get close to elections again.

[vi5]

5. "Obama wins, he lets them expire"

That's assuming whoever the Republican nominee is (or just the Republican noise machine in general during campaign season) doesn't force him to run scared and actually sign an extension on them in advance of them expiring in 2013.

Betting on Obama standing his ground and being strong during an election campaign, in the face of the Republican noise machine making an issue about something is not something that makes me feel all sorts of confident.

[JoePhilly]

10. Can you describe the manner in which they do it? What specific arguement

can they use?

Obama's primary reason for extending them last time is that he was unwilling to raise taxes on those making under 250k. He's painted himself into a corner. He trusted the Congressional Dems to pass legislation to drop the top end cuts but keep those under 250k. They punted. making it impossible for Obama to keep both promises at the same time.

Going forward, Obama can continue to call on Congress to extend ONLY those cuts for those under 250k. And he can say that if they expire as scheduled, he will then call on congress to write new legislation that puts back only the breaks for those making under 250k. And he can point out that the GOP will GASP is fighting against cutting taxes for the middle class.

As an aside, my bet is that they will expire, and then the Dems will propose legislation that extends them for those making under 1 million dollars a year. DU will scream, but the reality is that the big money in those tax cuts isn't in the 250k to 10 million range anyway, its above 10 million when those cuts really kick in. For instance, for those in the 250k to 500k range, the break is about 3,000. When you get above 10 million, its jumps to a break that is over 250k.

With the tax cuts gone, the Dem argument that no one making less than 1 million will get hit will resonate even more broadly than the 250k number. It also kills the GOP argument that small businesses will be hurt. In terms of explaining this to the American people, 1 million is rich, and 250k is more than 98% of make. People know that. So who will support giving the super rich a tax break that is larger than what 98% of all Americans actually make. Its a losing argument.

In addition, Obama's opponent really has no message here. What will Romney say ... that he'll extend them all again? That argument has no punch when Obama is saying he'll extend for under 250k (or even 1 million). Romney will only be promising to give money to the super rich, which is a loser in the current environment.

Maybe there is a message that the GOP can use, particularly with a compliant media that wants to keep this close. But I can't find it.

[vi5]

13. The argument is the same now as it was then..

It's not just the wealthy tax cuts that will expire. They all will. In order for the ones for under $250K to get an extension they'll have to pass a whole new law (if they don't extend the current ones). The Repubs will not pass that unless it includes ALL the tax cuts, or at the very least all the wealthy tax cuts.

Therefore in the midst of campaign season, it will boil down to "Obama wants all the current tax cuts to expire. The republican candidate wants them extended permanently."

That's all it will take to have his cowardly handlers have him running to the nearest desk to sign an extension.

[JoePhilly]

14. Not exactly ... the key difference is that Obama can not run again.

The last time ... Obama could not break the campaign promise to not raise taxes on those under 250k.

First, if he did it last time, they could use it to attack him BEFORE the 2012 election. If he lets them all expire at the end of 2012, thus breaking that promise, so what? He can't run in 2016 anyway.

Second, the original promise to those making under 250k was a "first term" promise. When he runs for a second term, he can claim that he did in fact KEEP that promise. And he's not lying. In a sense he becomes free of that promise. And he can reframe the entire discussion. He can run on a new promise to demand that congress extend the cuts for the middle class only.

I understand you line ... but problem with your logic is this sentence ... "Obama wants all the current tax cuts to expire. The republican candidate wants them extended permanently."

Obama will have said NO, I want to extend those cuts only up to 250k (or even 1 Million, or hell, even 5 million). And the GOP Candidate will have to call for cuts for the really super rich. The GOP candidate and Obama will agree on the "lower end" cuts.

Again ... no GOP leverage here.

[vi5]

15. I think here's our main point of difference....

Both of our scenarios revolve likely around our perceptions of Obama and what he "really wants".

You have every confidence that he "really wants" those tax cuts to expire.

I have every confidence that he "really wants" to extend them but needs some bit of political cover to do so and to find himself again able to pin it all on Republicans.

Obviously over the next 12 months we'll see which one of us has the correct and accurate assesement of the situation and where Obama really wants things to net out.

[JoePhilly]

16. He could have made a deal to extend them permanently last time.

98% of all Americans make less then 250k a year.

And while the majority of Americans support raising taxes on the rich (its above 60%), the numbers fall when you ask that 60% if its OK if they lose their tax break. When you tie them together, support falls.

I'm reminded of an old episode of "Bosom Buddies" with Tom Hanks. I know that sounds silly. In the episode, their boss, played by Holland Taylor, tells them that their there firm will run a contest, for a large corporation, in which the prize will be $600. Tom Hanks, and the other guy, ask how that number was selected, and she tells them ... we ran focus groups, and poor people think $600 dollars is a lot of money.

I was reminded of that episode not by the Bush tax cut debates, but by something that Bush #2 did when he first came into office.

He sent everyone a tax rebate check of about $600. And when he did it ... that is when I recalled that episode of Bosom Buddies. People thought it was a huge some of money.

And for some it actually is. And so, when confronted with losing a tax break that costs one 300-600 dollars, the support for ending tax cuts for the super rich dropped.

Past that, the reason Obama wants to, and needs to, keep those middle class tax cuts, is because unlike the tax cuts for the rich, tax cuts for the middle class has a stimulative effect. More money in the pocket of the middle class, leads to more economic activity in local economies. Same is true for unemployment benefits.

The tax cuts for the rich have no such effect. Obama knows that his options for stimulating the economy are limited thanks to GOP obstruction.

By now ... you can hopefully tell that I have spent more than a few minutes considering these things ...

And so ... can you dissuade me? You say you have "every confidence" he wants to extend all of the cuts ... can you develop a more detailed logical argument for that??

[vi5]

19. I hope you are right and I am wrong...

All I have to go by is my gut instinct as well as a sense of history with regard to how he has handled himself in past situations.

You say the tax cuts for the middle class have a stimulative effect. At this point it's not stimulative any more if it's become such a part of the spending structure of our country. Stimulus would imply getting them MORE money than they have now to put into the economy. I agree it would be a negative stimulus to take it away, but the fact is if you (well not you personally....I mean anyone in general who does) want to cry about the evils and horrors of the deficit (which he has and continues to do) then the tax cuts are bad for the country. Period.

Again...I hope you are right and I am wrong. I've said it many times...I'll be happy to be proven wrong. I want to be wrong and I want my gut instinct to be wrong. But the fact is that my gut instinct tells me (in addition to many of Obama's actions and words) that he buys into trickle down economics, views the wealthy as "job creators" and in the end buys into all the Reaganomics that causes people to believe in the tax cuts for the wealthy in the first place.

[ieoeja]

23. The $600 check was added to the tax holiday legislation by the Democrats.

Sort of like the insurance mandate being added to health care at the insistence of the Republicans. So you now have the absurdity of Republican governors going before a Republican majority in the US Supreme Court to challenge Republican legislation.

[russspeakeasy]

9. JoePhilly....thanks for making sense..

[JoePhilly]

11. Let's also hope I'm right ...

:rofl:

The GOP and the media are willing to lie endlessly, so I won't say its a certainty.

The other GOP problem here is that their entire strategy has been one of inaction ... to do nothing.

Any attempt to find some bargain that includes such an extension is likely to fail simply because the Tea Party member of the GOP are unwilling to give an inch. And I can't see the Dems extending those cuts (and then Obama signing it) without getting something significant.

And ... I can't find a political message that the GOP can use (even with compliant media help) that works.

[Vattel]

22. self-delete

[Cigar11]

3. When the Democrats have the Numbers … it will be gone.

Or they will be gone.

[great white snark]

6. So let's give them the numbers.

Many ills can be cured with a Dem supermajority.

[former9thward]

21. That is almost impossible.

There are only about 50-60 competitive House seats. The rest are automatic D or R wins because of the make-up o the districts. So I don't where a super-majority comes from.

[SCantiGOP]

8. Obama needs to hang tough

Just keep repeating: I will veto any extension of the Bush tax cuts unless they are repealed for those making over $250,000. If a bill doing that doesn't get to my desk, it will mean the Republicans have decided to raise taxes on the 98% or so making less than $250,000. Every Democrat would back that.

[Autumn]

12. They are Obamas tax cuts. He extended them.

I think another deal will come along and they will still be Obamas tax cuts.

[Skittles]

17. CORRECT

[hay rick]

18. +1