Tax Cuts Extended to All Americans

[haha]

Obama, GOP reach deal to extend tax cuts - Yahoo! Finance=

I guess this is not quite a done deal, but I would think it looks good.

As a retiree I probably would not ever be affected by higher taxes over $200,000 income(excluding bracket creep). Still I do not like to see any more of this, "sure tax that other b-st*rd and spend it on me", than we already have. I hope the next revenue plan will be a VAT.

I put this in politics since I wouldn't want of the easily shocked members to be upset.

Ha

 

[FinanceDude]

Like any legislation, not perfect, but a start. If it works out, the 2 years might stretch further. Looks like extending unemployment benefits was the only way to get the Dems on board, but you gotta give to get sometimes.

Perhaps Obama didn't want to be the first President in a long time to raise taxes coming out of a recession?

 

[FUEGO]

If this passes per the proposal, this is good news for me. They are proposing a 2% reduction in SS payroll taxes. That will be over $2000 extra take home pay for our family, plus the $3000+ that extending the Bush tax cuts continues to save us.

 

[heyduke]

not for the extension in unemployment benefits but it appears to have been trading fodder

 

[M Paquette]

Sure looks like we'll hit the national debt ceiling sooner, rather than later now. Probably late March.

That'll make for some highly entertaining finger pointing.

 

[Independent]

Are these "tax cuts" or "tax deferrals"? Since they increase the deficit, won't we end up paying for them eventually through higher taxes to fund the interest on all the money we're borrowing?

 

[Danmar]

Will help in the short term but really only delaying the inevitable. At some point you have to deal with your deficit.

 

[clifp]

Sure looks like we'll hit the national debt ceiling sooner, rather than later now. Probably late March.

That'll make for some highly entertaining finger pointing.

That is my reaction also. When give the option to make painful choices or borrow more money, shockingly the politician agree to not cut either parties sacred cows and kick the can down the road.

Now to be fair, given the current economy strong cases can be made for both keeping the existing tax cuts and extending unemployment insurance.

However, after 10 years of low taxes, and 8 years of high government spending followed by two years of super high government spending, it would be nice if the parties acknowledge the possibility that both approaches are wrong. Maybe just maybe maintaining government debt at reasonable level would spur real economic growth.

"America always does the right thing after exhausting all other alternatives"

 

[obgyn65]

+1. We are living in interesting times - and likely to get more interesting soon.

Will help in the short term but really only delaying the inevitable. At some point you have to deal with your deficit.

 

[chinaco]

Given the weak economic growth, many believe it would be a bad time to reduce income in the hands of consumers.

The longer-term tax situation will play out in the next year with Obama's debt commission's recommendations.

There will be tax increases. The question will be: who pays. There will be spending cuts, the question is: what gets cut.

 

[Gone4Good]

It's nice to see we can all work together and reach bipartisan compromise in the name of handing out goodies with borrowed money.

As for concern about deficits . . . "That was so November 2nd."

 

[bizlady]

Does anyone know if adjustng the AMT rates is part of this proposal?

 

[MichaelB]

It's nice to see we can all work together and reach bipartisan compromise in the name of handing out goodies with borrowed money.

As for concern about deficits . . . "That was so November 4th."

Right.

 

[Martha]

Blech.

 

[lets-retire]

I would have no problem with increased tax rates, only AFTER the government proves they are capable of handling the money already given to them. They have not, so I do not support tax increases. Why give the government more money to spend when they haven't shown any type of fiscal restraint with the money they already receive?

On a side note during this debate about raising income taxes on the population, the government has seen fit to try to decrease import taxes from 25% to 0% on trucks assembled in Korea and shipped to the US. If the government believes it needs more money and increased taxes are the only way they can get more money, then why decrease the taxes on an imported commodity?

 

[FUEGO]

On a side note during this debate about raising income taxes on the population, the government has seen fit to try to decrease import taxes from 25% to 0% on trucks assembled in Korea and shipped to the US. If the government believes it needs more money and increased taxes are the only way they can get more money, then why decrease the taxes on an imported commodity?

I don't know the details, but it is probably tit for tat. Some commodity we export to S Korea now has 0% Korean import duties instead of 25%. Hence, some American manufacturer can sell more stuff in S Korea. And American businesses (that are hurting) can buy that S Korean truck for 20% less than it used to be, hence boosting their bottom line.

 

[HFWR]

I would have no problem with increased tax rates, only AFTER the government proves they are capable of handling the money already given to them. They have not, so I do not support tax increases. Why give the government more money to spend when they haven't shown any type of fiscal restraint with the money they already receive?

On a side note during this debate about raising income taxes on the population, the government has seen fit to try to decrease import taxes from 25% to 0% on trucks assembled in Korea and shipped to the US. If the government believes it needs more money and increased taxes are the only way they can get more money, then why decrease the taxes on an imported commodity?

+1

Even with fairly drastic cuts in spending, we'll still need higher rates at some point. Otherwise, the numbers don't add up... Don't give the addict more crack!

 

[ziggy29]

What a surprise -- more "kick the can down the road" in Washington. That never happens.

 

[Alan]

No surprise at all to chicken out and leave the tough decisions until after another election. What did surprise me is that, in light of all the hype of the underfunded SS system, that they cut employer contributions by 2%. If they really wanted to give business a tax break, why hit SS? (unless of course because the effects of the reduced SS revenues will impact a different congress way down the road).

 

[clifp]

No surprise at all to chicken out and leave the tough decisions until after another election. What did surprise me is that, in light of all the hype of the underfunded SS system, that they cut employer contributions by 2%. If they really wanted to give business a tax break, why hit SS? (unless of course because the effects of the reduced SS revenues will impact a different congress way down the road).

I am sure the theory is because it has lowered the cost of hiring a new worker by ~2%. So if there are say 500 business planning on hiring 50 or more workers in the next few months these business will now hire 51 new workers. Meaning a creation of 500 new jobs, which will make such a big contribution to our unemployment situation.

 

[cb7010]

How complicated is this really. We are in debt, we have to pay it back at some point. So, we need to spend less than we bring in to account for the debt payback and then when the debt is gone responsibility would dictate we spend no more than we bring in. Actually, like any prudent person or business running a budget, we should actually spend less than we bring in and establish a rainy day fund.

Personally, I would like to see us cut spending instead of raising taxes; but, leaving the elected officials in charge of this budget is not getting us anywhere fast. We let it get to this point and at some point need to take our medicine and tighten our belts. The funny thing is I don't even think there is a plan in place to pay off our debt. What the heck is wrong with us?

 

[cb7010]

I guess the moral of my first post is that this tax deal, which is being touted as a big event, is really just noise that doesn't really deal with the underlying problem.

 

[Bestwifeever]

....What did surprise me is that, in light of all the hype of the underfunded SS system, that they cut employer contributions by 2%. If they really wanted to give business a tax break, why hit SS? ..

Business doesn't even get a break there--only the employees get their contributions cut:

The Social Security tax cut would apply to workers, not employers, and would drop from 6.2 percent of pay to 4.2 percent for one year.

 

[Gone4Good]

The payroll tax cut is on the employee portion, not the employer portion. And the "theory" is that it puts money in the hands of people who are very likely to spend it.

 

[Independent]

I would have no problem with increased tax rates, only AFTER the government proves they are capable of handling the money already given to them. They have not, so I do not support tax increases. Why give the government more money to spend when they haven't shown any type of fiscal restraint with the money they already receive?

On a side note during this debate about raising income taxes on the population, the government has seen fit to try to decrease import taxes from 25% to 0% on trucks assembled in Korea and shipped to the US. If the government believes it needs more money and increased taxes are the only way they can get more money, then why decrease the taxes on an imported commodity?

Is it "they" or "us"? Do you think ordinary voters would cut spending if we got the chance? Suppose we had a national referendum on the budget ....