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This page contains a single entry from the blog posted on November 10, 2012 8:10 AM. The previous post in this blog was Mac concedes. The next post in this blog is Getting ready. Many more can be found on the main index page or by looking through the archives.

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Saturday, November 10, 2012

Wolf! Wolf! Obama's talking tough on taxes again.

Our president is huffing and puffing about how he's determined to raise taxes on high-income individuals. It was part of his campaign spiel, and now he's speechifying about making it a reality.

The problem, of course, is that we've already seen this movie. It was the same rhetoric right after he was first elected, but even with a majority of the House and 60 Democrats in the Senate, he didn't get it done.

Indeed, he and sellouts like Ron Wyden (R-N.Y.) affirmatively extended tax breaks for the wealthy in late 2010. They claimed it was necessary to stop the Republicans from gutting unemployment compensation, but let's be real. They didn't fight for their supposed tax platform because they didn't really want to. What people routinely call the "Bush tax cuts" should be referred to as the "Bush-Obama tax cuts," because they were set to expire at the end of 2010, and Obama and the Democratic Party-controlled Congress extended them for two years. All they had to do was nothing, and the cuts would have expired right then.

Obama says he won't back down this time. But now the Republicans control the House, and besides, they have the country ready to go off the "fiscal cliff" come the first of the year, with major government spending cuts and tax increases programmed to come into effect if no action is taken. The hostage-taking potential is far greater than it was two years ago, and Obama's got far fewer troops. And now he's going to fight them?

It's okay with us. If the Republicans don't want to play along, then it's time to go ahead and go off the "cliff." Reagan closed the government for a few days to make a point, and it didn't tarnish his star much. It will only be a brief dramatic episode. Spray Tan Boehner will come around when his constituents start screaming. But it's going to take cojones on the part of the Obama White House -- cojones that it's never shown it has.

Comments (36)

Near as I can tell, going off the "fiscal cliff" won't shut down the government, it just drastically increases taxes and cuts spending in some key ares. Anyone who truly believes the deficit is the biggest concern facing the nation would happily go off the "cliff".

The downside is that it will cause serious damage to a our already fragile economy.

I hope a deal is reached. I would love to see the Bush tax cuts ended. But if maintaining those tax cuts is the price to pay for an improved economy, then I'm okay with it.

The deficit is not the biggest concern facing the nation. It is the incredibly high unemployment. And whatever we have to do to continue to ensure that economy grows is the right move.

Yes, but the tax increase is long, long, long overdue. If Boner won't play fair and is using the "cliff" as his bargaining chip, then somebody needs to call him out on it. As I say, there will be some short-term drama, but it won't last long enough to do any lasting damage.

whatever we have to do to continue to ensure that economy grows is the right move.

Think longer term than just some growth figure for six months or a year. We can't keep borrowing from China like there's no tomorrow. There is a tomorrow.

According to the True Believers, isn't Obama's second term when he will reveal his true self and fight to win all the stuff he sold out during his first 4 years? Prepare to be amazed, I guess.

Yeah, just like Nixon's secret plan to end the war.

I will take the plunge! off the cliff. It is past time for everyone to get real!

Newest porn name in D.C.: "Cliff Fiscal"

Don't miss Wolf Blitzer's Cliff Fiscal interview on CNN Sunday!

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I don' agree that he hasn't shown any cajones. He has been very effective in fighting for things he believed in even if it came at a steep cost--e.g. Health care.
I never expected him to raise taxes in the first term because he needed every bit of juice from the economy he could muster. Now I would be suprised if he doesn't hold his ground on this, he holds most of the good cards. I guess I will find out if he is a good liberal after-all (although he has followed through on many major issues, e.g. gay rights, but his use of drones certainly give one pause). I agree with you that he should risk the cliff. If nothing else, history would vindicate him.
And Jack, we can borrow from China until they stop buying. If they are so stupid to buy at .0025 interest rates, then sell it to them. All of our debt is denominated in dollars--which we control the printing press for so we can always just make more, but we won't have to because there is any other universally liquid store of value that the world can switch to? Euros? RenMenBi? Not anytime soon.

All this debt talk by people who claim to be so serious just shows that they don't really understand how the world's monetary system is currently structured. It's a reataive standard--not an absolute one. Our debt doesn't matter if there is no better alternative for people to buy. That's how markets work, which is funny since you would think they should know that since they praise the "free market" so much.

But you are right one day there will be a tomorrow, it just ain't going to happen anytime soon.

Americans had a tough choice in this past election. Were we going to deal with:

• Angry, anti-science, faith-based, Repub obstructionism and gridlock?

or

• Angry, anti-science, faith-based, Repub leadership?

I think most of us realized this was not going to be pretty no matter what. In the end, we chose the latter. I think we realized having self-righteous immature repubs obstructing progress was a shade better than having these folks running things.

It sounds swell, but if you print that much money, a loaf of bread will cost $20. In our kids' lifetimes, if not sooner.

And the point here is that the rich don't pay enough in taxes, and Obama hasn't got the guts to make them do so. At any level of government spending, the rich don't pay enough taxes. Got it?

justin morton - To be dealt with at nearly the same time as the 'fiscal cliff' is the necessary increase in federal debt ceiling. That is the lever that can shut down portions of US government.

At any level of government spending, the rich don't pay enough taxes. Got it?

Got it--short & sweet and on the mark.

I hope we are pleasantly surprised, and the White House forces the issue. Fool us once.....

Tax the rich is a popular idea but wont do anything to fix our issues. Take every penny the 1% have and you can fund the federal government for a week. You still will have the other 51 weeks to worry about funding. Any you know what? Next year you have to worry about funding all 52 weeks again.

Wake up and smell the coffee, we have a serious spending problem that we can't tax our way out of. Obama and the rest of our reps need to get serious about spending cuts. And no, the upcoming cuts planned if we go over the "fiscal cliff" wont cut it.

We are so deep in the hole, that if the objective is to reduce the deficit meaningfully, you're going to have to tax average Joe - We don't have enough rich people.

Which is a two-edged pisser since a lot of the deficit has been for bank bailouts via Bush and Obama whihc average Joe didn't get $0.01 increase in his net worth out of.

When five or so of the richest counties in the US are suburbs of DC, I think it is time to look at just cutting spending. For all the howling, that hasn't happened yet.

I'm not sure cajones is the right word here.

I had an interesting revelation one time. I was the banquet waiter at a small party for James Watt, Reagan's Secretary of the Interior. Incidentally, the other waiter was Terrell Brandon's dad. This was the early 80s long before Terrell became an NBA star, or was even in high school yet.

In those days, James Watt was saying something offensive about every 20 minutes, and he had Secret Service with him. That seemed unusual but I was talking to one agent for quite awhile as we waited outside in the hall for the party to break, and he told me that Watt was receiving almost as many death threats as the president.

That's when I really got it about how many threats are made against a president's life. Can you imagine how many people in this country have ill feelings towards President Obama? Then imagine the actual threats that do come in from the pyschos. We don't hear about even a fraction of those, but they are there. So you know there are all kinds of other people around the world plotting against the president or at least thinking about it.

So that night was when I realized that all presidents - even presidents I would later not like at all (George W.) - are showing a lot of courage just being in office. I've been in quiet back halls when the president walks through and believe me, it's tense. You can feel the energy and it's something else. You can feel the potential of something bad happening and everybody is on high alert. Being the leader of the free world is a tense situation.

So I'd say Obama may have a lack of political will, but cajones? If I had that many people wanting to hurt me, I'd be afraid to walk in front of any crowd. I'd be in a metal box in the White House basement. So I disagree with the wording: Obama's got cajones for days.

"All this debt talk by people who claim to be so serious just shows that they don't really understand how the world's monetary system is currently structured. It's a relative standard--not an absolute one. Our debt doesn't matter if there is no better alternative for people to buy. That's how markets work, which is funny since you would think they should know that since they praise the "free market" so much."

But China isn't buying our debt simply because it's the best place financially to park trillions of dollars. China is buying our debt to generate non-monetary leverage to advance its own nationalistic policies. It's bad for everybody in many ways.

According to IRS data, the top 1% of taxpayers pay almost 40% of the total federal income taxes. What percentage would be "fair"? As you have probably heard, almost half of the taxpayers pay no federal income taxes. A politician who promises to take from Peter and give to Paul can always count on the vote of Paul.

My take on the not raising taxes during the first term had a lot to do with Obama taking all of the "he's a socialist" rhetoric too seriously. His party also took a major drubbing in the mid-term elections mostly due to Obamacare. This time around he really has nothing to lose politically, and there is very clear public support for tax increases on income aove 250K, so the odds of him stiking to his guns are much higher. If he can make the Republicans look like a bunch of schmucks maybe the mid-terms will go a little better next time.

If the Dow 30 loses 30% between now and 12/28/12, I think that cojones (alone) would be sufficient to avoid compromise.

The Republicans might be willing to drive over the cliff just so they can point to the Obama Recession and gear up for 2016.

I don't think President Obama will allow that to happen, not unless he really is a Secret Muslim.

It's going to take a lot more than just raising rates on high income earners to get us out of this hole. And no one, Republican or Democrat, has the nerve to face this. We will need to raise taxes across the board, not just on couples making more than $250,000. Even more, we need to cut spending, which is going to mean raising the SS age to 65, at least, and cracking down on SS disability abuse. Also, it means reducing our bloated military (there's plenty of non mission critical spending there). The Medicare tax should just be rolled into the income tax and should apply to all income. Romney's idea of simplifying the tax code by eliminating deductions makes sense - why not limit or eliminate the deductions you can take on mortgage interest, charitable donations? There's lots more that can be done (e.g., a VAT like just about every other country has), but our problems won't be solved if we don't cut spending.

China buys US debt because it has lots of US dollars. It has lots of US dollars because it sells stuff to the US and gets dollars in payment. If it sold the US dollars it gets elsewhere, that would make the dollar exchange rate go down, which would make China's goods more expensive for us. So out debt is a good investment for them. When it comes due, they roll it over, because they don't want or need more dollars.

Reducing America's public debt would mean increasing private debt or reducing private savings, either of which would take a bite out of the economy, exacerbating the deficit. What the deficit needs is full employment, and what the debt needs is a combination of growth, productivity improvement and modest inflation. If we want more tax revenue in the short run, the way to do it with the least harm to those objectives is to raise taxes on the rich.

Try this , lower the SSN age , not raise it. All those newly eligible will retire , creating a massive one time bunch of jobs. The unemployment rate goes from 12%-15% where it is today to 4% in the span of six months. Tax revenue is the same but unemployment payments go way down. The workforce gets younger so productivity goes up.
I am with you Jack , let it go off the cliff. The military needs big cutbacks, and those soldiers can come back to the new jobs created by lowering SSN.

tda - the demographic problem that has followed me my whole life is the baby boom bulge in population that would retire all at once under your plan. The huge imbalance of workers to retirees will be impossible for even 96% of workers to pay for. People are living longer, so raising the retirement age is appropriate and overdue.

Before you raise the retirement age get rid of the social security tax exemption. That'll fix the funding problem.

Also just because people are living longer doesn't mean they should be forced to keep working longer.

Taxes have to go up. It's beyond stupid to over spend except in times of emergency, and we've been doing it for decades.

Historically low taxes on the wealthy have done nothing to stabilize or stimulate the economy. Raising them will do nothing, NOTHING, to harm the system.

As TNA said above, in a beautifully concise piece of bad math, the top 1% are getting at least 40% of the income. They can afford the tax. The system has awarded that top bracket for decades, to the point that it's gotten WAY out of balance.

You have to squeeze someone.

... our already fragile economy. and It is the incredibly high unemployment.

Oh yeah, it is after the election so it is safe for everyone to say these things.

A quick internet search indicates that the top 1% of income earners in the United States earn between 24% and 25% of the earned income in the country.

Don't worry folks. Obama, Reid and Pelosi will do a bang up job screwing up the economy by mid-2013. In case you haven't already noticed it in the news yet; lots of major corporations are dumping employees, cutting expenses and generally retrenching to avoid extra costs for Obamacare. I predict 9% unemployment by June of 2013, GDP under 2% and a stock market going nowhere.

Increased taxes on the rich will do almost nothing to reduce the deficit and won't reduce the debt. This is pure political theater to justify continuing to go down the road of ruin. Enjoy the performance while it lasts because you are all going to wallow in misery during the last act when the debt bomb explodes.

"the top 1% of income earners in the United States earn between 24% and 25% of the earned income in the country."

Apart from the intolerable stress this statement puts on the meaning of "earn" and "earned", the figures are totally irrelevant to the question of where marginal income tax rates should be set.

Read a lot here about Obama's nuts, he doesn't have any. But that said, raising the taxes on the rich really ain't going to do anything, it would be like bringing a rubber band gun to the shoot out at the OK corral. If you have money, you use it to minimize your taxes, plus, as has been pointed out (time and time again), if you took every dime the 'rich' make, it wouldn't make a real dent in the deficit. No, since Obama can't run for a third term (thank God) he WILL push for a VAT - count on it. On the one hand, I almost applaud it, those who aren't paying (47% sound familiar) WILL start paying taxes, on the other hand, government is government (state or federal) and as long as they keep finding ways of digging in our pockets, they don't bother to look at what they are spending it on.

Try this , lower the SSN age , not raise it.

I have a different take on your experiment: Require everyone aged 18-24 to serve in the military. They can pick the branch, pick what part of the country they want to serve in, and even some choice in their specialty.

Second, bring our troops home from overseas for the most part and back home.

And third, anyone who is on unemployment and under the age of 45 must join too. 46 and older won't be forced to "join the military" but may be hired into the military as a civil service employee until they find permanent work.

Now, we have an instant federal workforce of millions. A workforce that is equipped with a lot of heavy machinery. Ideal for major works projects - things like schools and highways and railroads and airports and the like. Things that are also militarily significant. And a huge crew of Americans who don't get paid a heck of a lot, and we have to pay to feed and house them on top of their meager pay, but it will both get some badly needed projects completed, underbudget, and give jobs to millions rather than an unemployment check (or worse).

I'd much rather federalize infrastructure construction, than give it to bloated, politically connected contractors. You know, like how MAX and the Streetcar works.

Jack wrote:
And the point here is that the rich don't pay enough in taxes, and Obama hasn't got the guts to make them do so. At any level of government spending, the rich don't pay enough taxes. Got it?

...but left us all hanging. How much is enough? And of course, others chimed in with the obvious - if we taxed them to the extreme, perhaps even 100%, we would still likely be in a hole unless spending was reigned in.

That is the third rail: who in our government, local, state, or federal, is willing to champion spending cuts along with tax increases? Who is able to build a coalition that would garner enough support to pass. And even if this were accomplished, what about those unfunded pension obligations? those ever increasing cost for promised benefits? the lack of a growing economy that will be able to provide for our growing population?

Sure we can talk about avoiding that fiscal cliff creeping up in December. Yes, that needs to be addressed. There is a lot more to address beyond that.

So...does anyone truly feel that taxing the rich even more is the only thing that needs to be done to make everything better?

While I am not technically rich as the current definition goes, I truly believe that setting the cutoff at 250K is realistic. In reality, it's probably more likely to affect people down to $75K in one way or another. It just won't be called an income tax. Those fees, penalties, and cost of expected benefits and contributions will supplement what is defined as income tax.

No one thinks raising taxes on people making more than 250k will fix the problem alone, but it's damn sure a better start than gutting the social safety net. Hell, even Bill Kristol is saying Repubs should go along with taxing higher wage earners as part of a bargain to reign in the deficit.

My brother-in-law just fell into a retroactive 4% income tax hike in Cali.

So he's relocating his company to Reno, Nevada and taking about 180 jobs with him (it was 300 jobs pre-recession). I don't know what his payroll totals, but his AGI exceeds $2 million annually.

63 new regulations a day....
And you wonder why the economy is in the dumps.

It would have been madness to allow a big tax increase at the beginning of 2011 -- the recovery was far too fragile. The legitimate criticism is that Obama could have gotten more in the deal (including a debt-ceiling agreement that would have disarmed the Republican crazies from holding the country hostage later in 2011).


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J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 328
At this date last year: 183
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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