Wednesday, November 3, 2010

Should We Renew The Bush Tax Cuts? (US Politics Today)

This is the big issue in DC right now, and it's the first time the Nation has seen the new Congress interact with President Obama.

Republicans want to extend the intentionally temporary tax cuts for everyone, including families making more than $250,000 a year.  The Treasury Department estimates this would cost the nation roughly $3.7 trillion per decade.  The Democrats are interesting in extending the cuts for everyone but the wealthy, an extension which the Treasury thinks will cost us around $3 trillion ($700 billion less than the Republican's idea) over the next decade.

The Obama administration is pushing for the Democrat's less expensive and more fiscally responsible plan, but prominent Congressional Democrats are already talking about temporary extensions for all, as a viable compromise with the right.

From Bloomberg:

If Congress takes no action, individual income tax rates will increase to 15, 28, 31, 36, and 39.6 percent from 10, 15, 25, 33, and 36 percent now, respectively. Reinstated limits on certain deductions and exemptions would push rates even higher for taxpayers in the top two brackets.
Most American's are probably unaware that we have historically very low tax rates for the wealthy, and that the US Government is shrinking according to at least 3 reliable indicators.  Despite the right's rhetoric over the last decade, both Clinton and Obama have lowered taxes.  Curious what bracket you're in? Click This.

It remains to be determined whether the Obama Administration would veto the Republican proposal, and whether or not the Republicans are even united enough to push their plan through.  If the Republicans manage the super tax cut, we can't take their pledge to reduce the deficit seriously. 

The right wants to lower taxes while simultaneously decreasing the deficit, a goal which requires massive and deeply unpopular cuts to the budget.  As of now, nobody has any idea what the right wants to cut, or where the political currency to achieve those cuts would come from.  But if history has taught us anything, it's not going to be the defense budget.

I'm excitedly waiting to hear from the new, more conservative GOP what services or entitlements they want to renege on.

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