More Deceptions To Hide Consequenses of Tax Cuts

The NYT reports Congress may not be able to pass a budget plan for next year. Oh, what�s the problem?

"Republicans are concluding they would be better off with no budget plan than with one that would require them to pay the cost of permanently extending last year's tax cuts�

The impasse has "already undermined President Bush's top domestic goal, which is to make the tax cuts permanent," and demonstrates the limited options faced by
Congressional leaders because of the president's fiscal policy.

For example, "Is it more important to cut taxes," which will cost about $1.7 trillion over the next ten years, or is it more important "to prevent the budget deficit from expanding beyond its current level of about $400 billion?"

www.nytimes.com...


[Edited on 3-6-2004 by gmcnulty]

Your link requires registration, would you be so kind and post more body of the article? ah please don't edit

Republicans Ponder Not Adopting a Budget This Year
By EDMUND L. ANDREWS Published: June 3, 2004
WASHINGTON, June 2 - They have tried sweet-talk and dire warnings, insults and bluffing tactics. None of it has worked, which is why a growing number of Republicans are beginning to despair about agreeing on a budget plan for next year.
Embarrassing as that would be for the party that controls both houses of Congress; many Republicans are concluding they would be better off with no budget plan than with one that would require them to pay the cost of permanently extending last year's tax cuts.
Senate Republican leaders, back from their Memorial Day recess, showed little sign on Wednesday of persuading a small band of rebels within their own party to drop their insistence on "pay as you go" rules.
The four Republican dissenters, joined by most Democrats, are demanding rules that would force Congress to pay the cost of any new tax cuts either with spending cuts or tax increases in other areas. The impasse has already undermined President Bush's top domestic goal, which is to make the tax cuts permanent, and it will apparently postpone major budget decisions until after the elections. It has also exposed a rift over Republican priorities: Is it more important to cut taxes or to prevent the budget deficit from expanding beyond its current level of about $400 billion?
The White House and House Republicans have staunchly opposed any such restrictions, because permanently extending Mr. Bush's tax cuts would cost about $1.7 trillion over the next 10 years.
On Tuesday, Senate Republican staff members floated a possible compromise: If the Republican hold-outs would accept a budget framework negotiated with the House, the Republican leaders would support a separate pay-as-you-go rule that would only apply to the Senate. But that idea vanished before Republican leaders had even proposed it, apparently because some Senate Republicans viewed it as a capitulation to opponents of the tax cuts.� I�m still working on a couple of ideas," said Senator Don Nickles, the Oklahoma Republican who is the chairman of the Senate Budget Committee. "I'm going to invest some more time in this - but not a lot."And while some of the Republican holdouts said they were open to compromise, they were far from certain that one would be possible. �It�s closing the barn door after the cows are gone," said Senator John McCain of Arizona, one of the most vocal holdouts, dismissing the proposed budget resolution with a thumbs-down sign.
In addition to Mr. McCain, the major Republican Senate holdouts are Senators Olympia J. Snowe and Susan Collins, both of Maine, and Lincoln Chafee of Rhode Island.
"I hope we can come up with a compromise," Ms. Collins said. "But I feel very strongly that there needs to be real budget enforcement. �On Wednesday, two liberal policy research groups released a study estimating that the ultimate cost of the tax cuts would fall overwhelmingly on middle- and lower-income families.
According to the study, by the Tax Policy Center and the Center on Budget and Policy Priorities, more than three-quarters of all households would end up net losers if the government actually paid for the tax cuts by either spending cuts or other tax increases.
But the wealthiest one-fifth of families, who are by far the biggest beneficiaries of the tax cuts, would end up big winners. �We should think of tax cuts as loans, not as grants, and in particular as loans that are not paid back by the same people who get them," said William G. Gale, a senior economist at the Tax Policy Center. One Republican official said Congress could muddle through without a budget agreement. Democrats have already made it clear they will vote to extend at least temporarily three major tax cuts - an expansion of the child tax credit, a reduction in the so-called "marriage penalty" for two-income families and an expansion of the 10-percent tax bracket to cover more middle-income taxpayers.
Failing to adopt a budget resolution would make it harder to prevent lawmakers from adding pet spending projects. It would also mean that any tax-cut extensions would fall under the Senate's normal debating rules, which require at least 60 votes before debate can be ended. But the biggest issue for Republicans may simply be the embarrassment of not being able to pass a basic budget plan even though they control both chambers of Congress and the White House. �It�s optics," said one Republican aide. "The issue is, can the Republicans do the most basic of things, which is to pass a budget?"
With elections just five months away, neither Democrats nor Republicans want to vote in favor of either tax increases or big budget cuts. But Democrats want to put obstacles in the way of future tax cuts while most Republicans simply want to leave the issue open until next year. �It�s true it would defer the decisions for a year, but at least it would get us through the year that we're in," said Senator Arlen Specter, a moderate Republican from Pennsylvania.

Not that I don't trust your 'copy-n-paste' job here, but a link to your source would be prudent?
Republicans Ponder Not Adopting a Budget This Year

Also gmcnulty,
It would be greatly appreciated if you would edit the ALL CAPS use in your thread title.



seekerof

[Edited on 3-6-2004 by Seekerof]

Embarrassing as that would be for the party that controls both houses of Congress, many Republicans are concluding they would be better off with no budget plan than with one that would require them to pay the cost of permanently extending last year's tax cuts.

I'm sure the Voodoo masters of the RNC will come to some amicable compromise to extend the appearance of tax cuts at least through the election...probably with many secretly hoping Kerry wins so they can blame him when they have to fix the budget.

Does this situation remind anyone of the last time a we had a Republican President (also named Bush). George "No New Taxes" Bush faced the same dilema, no working budget or new taxes. He correctly chose to not bring America to a sceeching halt...and lost the election. Lessons learned by the RNC.

When you call upon the Voodoo Gods to summon the spirit of the tax pandering beast, you have to feed it or it turns on you.

Don't worry middle class America. You'll have another fiscally responsible Democrat along soon to fix everything. Then in another four years, you can get back on the "It's mah money damnbit" train and take the tour of crazy town with President Jeb or whatever snake oil salesman you elect next time.

Gotta love the cycle.

Even excepting the NY Times reputation of late for strictly partisan editorial staff and its reporters habit of making up stories out of thin air, this article is so full of half truths, inuendo and outright misleading conclusions that even reasonable liberals should be embarassed by the obvious lack of journalistic objectivity presented. The article really should have a disclaimer added saying its an unpaid political advertisment.

NY Times = DU dressed as mainstream.

First off the article quotes four RINO's that constantly use the 60 vote super-majority rule to get back door pork deals and other advantages for their states at the expense of the country - thats all this is, just another "whats in it for me ploy" by some senators that realize the advantage of using the polarized politics of the senate for their own political advancement, you'll see the fix go in after public scutiny go away.

Qouting from the article,
"On Wednesday, two liberal policy research groups released a study estimating that the ultimate cost of the tax cuts would fall overwhelmingly on middle- and lower-income families"

"According to the study, by the Tax Policy Center and the Center on Budget and Policy Priorities, more than three-quarters of all households would end up net losers if the government actually paid for the tax cuts by either spending cuts or other tax increases"

Well of course LIBERAL policy research groups are going to get results that are favorable to their agenda, thats not exactly intellectually honest reporting by the NY Times now is it - why could they not have resaerched results from a non-partisan think tank? - because it does'nt fit their editorial agenda thats why!

The second paragraph is fiction based on something that is unlikely to occur unless of course Kerry is actually elected as president, heres why I say that.

"Latest data from the Internal Revenue Service demonstrate that the wealthy are bearing an increasingly disproportionate share of the tax burden.

Moreover, it doesn't take a fabulous income for Americans to land in the upper reaches of the tax brackets:
* All one had to earn to qualify among the top 25 percent of filers in 1999 was a modest $52,965.
* Persons in that heady income class paid 83.5 percent of all taxes.
* To be among the top 50 percent, a person had to earn only $26,415 a year.
The 27 percent marginal tax rate kicks in for single taxpayers at only $27,050 of income.

Source: Editorial, "A Rich Tax Debate," Wall Street Journal, January 22, 2002."
A Dose of Reality Concerning Taxes

$52,965 is all it takes to be near or in the group that is called "big winners" Now when I go to the convenience store that has a big poster saying "New Managers Needed" we pay starting salary of $53,700, I'll now have to look upon the store manager as one of those evil rich bastards thats not paying his fair share. Does that sound as crazy to you as it does to me?

The liberal tax policy groups are just using the worn out old class warfare propaganda put out by democrats that never has held any water, again you will get no truth here from NY Times.

What are the alternatives then that could have been reported on by the Times? - Theres this solution from Cato a libertarian think tank affiliated with neither the democratic party nor the republican party.

"In recent years, mismanagement scandals have occurred in many federal agencies, including the Army Corps of Engineers, the Bureau of Indian Affairs, the Department of Energy, the Federal Bureau of Investigation, and the National Aeronautics and Space Administration. Even the National Zoo in Washington has recently been shaken by scandal. The $2.3 trillion federal government has simply become too big for Congress to oversee."

"The good news is that Americans do not need such a big government. Most federal programs are unconstitutional, unnecessary, actively damaging, or properly the responsibility of state governments or the private sector. This study analyzes programs that could be cut to create annual budget savings of $300 billion. If these cuts were phased in over five years, the budget would be balanced by fiscal year 2009 with all of President Bush's tax cuts in place."

"Some reform ideas should be applied throughout the government. Business subsidies should be terminated, and commercial activities should be privatized. Also, federal grants to the states should be scaled back. Currently, a complex array of 716 grant programs disgorges more than $400 billion annually to state and local governments, which become strangled in federal regulations."

Cato Institute on Downsizing Federal Government

I dont see anything in that analysis that indicates downsizing is going to force the government to steal candy out of your babies hands, its a very reasonable explanation of the problem facing Americans today in regards to government and taxes.

Some of you will invariably allude to the horrors that will occur when the states will have to fund their own programs, yes the horror is paying high federal and state taxes combined . Let me point out that local control of taxation, regulation and budgeting ultimately provides much more empowerment of the taxpayer to control government abuse of tax funds.

Basically the truth of the matter is we have a two party system where politicians on both sides introduce new spending initiatives in the guise of helping helping people out, but what they are really doing is gaining more power through the use of your money - it amounts to a giant vote buying scheme.

Back to the tax issue for a moment, you may have noticed that the income figure of $26,415 puts someone in the top 50% of income earners, the NCPA study said that people earning less than $26,415 paid 4% of the tax revenue collected in 1999 according to IRS records (less now under the Bush tax cuts)

On the other hand the top 50% of income earners (remember this starts at $26,415) paid 96% of tax revenues collected. All one had to earn to qualify among the top 25 percent of filers in 1999 was a modest $52,965, persons in that heady income class paid 83.5 percent of all taxes. That means that persons earning from $26,415 up to $52,965 paid a relatively small 12.5% of total tax revenue. Whats the point of all these figures that you've probably heard before you might ask?

The point is that with clear minds and eyes wide open one of our national political parties has a goal to give so called but finely targeted tax cuts to the middle class while at the same time increasing revenues from the so called rich in a planned attempt to usurp democracy by ensuring that more than 50% of the voting public receives largesse from a minority of income earners no longer having the voting power to effect change.

Democrats are saying whats wrong with that, sounds good to me?

May people remind themselves to look back and read some history concerning countries that fell under the power of one monolithic political authority when asking that question, there is example after example of aristocracy's and dictatorships born of supposedly benign one party systems - is that what you want? - would you put your welfare in the hands of a government that has no natural checks and balances? - even if it started out benign how long would that really last once the politicians got a taste of REAL power?

I ask again is this what you really want?

When you see a narrowly divided senate that bickers over such things as tax and budget policy its a good thing for all of us in the long run. My fear is that due to tinkering of the tax system as desired by democrats this system will become unbalanced and out of control forever.

Changing the tax system in order to gain votes is very risky and things may not turn out to be the utopia that some might hope for, reminds me of the old saying when one receives an unexpected gift after asking to many times,
"Ask and ye shall receive"

Doesn't surprise me at all. It was just a matter of time before it came down to this...

You say:
�NY Times reputation of late for strictly partisan editorial staff and its reporters habit of making up stories out of thin air, this article is so full of half truths, (sic)inuendo and outright misleading conclusions..�


You must not read the Times to say� strictly partisan editorial staff�, you should learn to form your own opinion from first had knowledge. And if you�re referring to the recent Judith Miller flap, rather then state a distorted personal conclusion of the event, I suggest a personal re-examination of the case first.

�NY Times = DU dressed as mainstream. �


I have no idea of what that means.

I see you quote from the �liberal� Tax Policy Center and the Center on Budget and Policy Priorities,���

I must assume liberal to mean �anything, one who holds a differing views� then you.

I would suggest you seek out the primary source and see if the portrayal of your �authority� is an accurate portrayal.

You sure post lots of irrelevant material with I bet you hope gives you the appearance of knowing of what you speak � I does not.

I posted a report of budget manipulation � a form of dishonesty � now being practiced by the Republicans on the American people.

If you choose to be the champion for and defender of � DISHONESTY � be my guest.

The question, unstated, by begging and answer����.Just who and how do we expect to pay for the expenses of government and when?

Please don�t give me the sorrya$$ distractions of �waste and abuse�, cut worthless government programs� and the other many distractions from the issue at hand����.

We have bills now needed to be paid and someone must pay for them����.as implied by Republicans it�s going to be my/our grandchildren.

THEIR AIN�T NO FREE LUNCH����THE BILLS MUST BE PAID.

AND THE �PUBES BEST STOP BUYING THEIR WAY TO POWER BY YELLING �LESS TAXES; SMALLER GOVERNMENT� and then doing just the opposite.

There are two reasons for the current debt in the United States.

Reason number 1 and the predominant region.

Kynesian Economics, in order to cause growth in the economy the Government must spend more money than it has.

Reason number 2 and a small trifle reason.

When Regan's Admin and Congress cut taxes in the 80s, the Congress did not want to reduce spending and Regan was trying to bury the Soviet Union and so encouraged an increase of spending in the Military.

This is what's happening today.

We need tax cuts. But we just cant' reduce our spending as quickly as we can reduce the taxes. So we end-up with deficits.

However, if we continue following Kynesian economics, our debt will one-day out-grow our ability to inflate our economy, and then we will fall.

Also I don't think the article is explaining the situation very well, I'm sure more insite into it would yield the understanding that creating a Budget is a very expensive task, and one proposed way of reducing government expenditures for some time now has been to go to a bi-anual budget instead of an anual one.

I'm not very educated about economic policies, but I remember reading somewhere that our deficit comes from the social security system. I guess if we spend more money than is coming through social security/taxes, we get the deficit.
I've also heard about how in the near future the amount of money going out of social security will be greater than that going in and partial benefits will be given out.
Then eventually the Social Security System will be obsolete by 2030 I think it was.

So with this information about Social Security, wouldn't the deficit become even worse with permanent tax cuts and an obselets SS Tax in the future?

[Edited on 4-6-2004 by Jamuhn]

Originally posted by Phoenix
Even excepting the NY Times reputation of late for strictly partisan editorial......

Phoenix, here is a TWATS vote for this post. This is probably one of, if not the best single post I have seen on this board. I am almost speechless.

And then the nonsensical reply that followed (after kandalivi)... Priceless.

Again way to go! I bow to you.

[Edited on 6/4/04 by Seth Bullock]

Some truth to some of what you say.............

If you're a taxpayer, US citizen.............no is the time to bone up on what's up...........so when it comes time to vote you'll be able to see just who has your best interests in mind...............

HINT: It's not Bush et. al..

[Edited on 4-6-2004 by gmcnulty]

I love how gmcnulty who says that Bush isn't looking out for you.

Bush has cut taxes across the board and wants to restructure taxation to encourage businesses to reinvest in themselves (the only one flaw of Regan's tax policy).

Who else is looking out for you?

Kerry who wants to raise taxes? What will that do? It doesn't hurt the rich or the businesses, they just simply pass their tax onto YOU the little guy. The only people hurt by taxes are the wage-earners.

So you might say, "oh crap...that rich guy got a tax-cut and I only got a 100 dollar kick back" but hey...at least that rich guy didn't fire you because he has to off-set the taxes on his business.

At least that rich-guy hasn't lowered your wages because he has to off-set the taxes on his profits.

You seething masses need to learn the reality of this world, and get your heads out of that socialist crap.

And most of all, you need to understand that this budget deficit is not the fault of the tax cuts but of high spending, cut spending...end deficit. Simple as that.

The tax cuts have so much more far reaching implications.

Phoenix has hit the nail right on the head and gmcnulty takes offense to this because it, as usual, debunks all of the leftist rubbish of class warfare. The facts are there mcnulty... $52K is all it takes to be placed in the top 25% of tax payers. Something like $83K puts you in the top 10%.

Why shouldn't phoenix question wasteful spending practices in the budget? Your attempt to paint the Republicans as "Dishonest" is disingenious at best. Are you trying to tell us that the Democrats never add pork to their plates? You had better go back and research history friend. BOTH parties are notorious for, "Hey, tell ya what... I'll approve your Bill when it hits the floor, just so long as you add this special funding program to the Bill." It happens every day on almost every single piece of legislature introduced.

Until Americans can honestly and intellectually acknowledge the fact that neither party has the best interest of the American public in mind, perhaps then we can enter into a fruitful debate on how to fix the system so that it may once again truly be a system of the people, for the people and by the people.

Why do republicans think we can just barrow our way out of debt? I mean I get the idea of regeanomics, trickle down whatever, but I dont see the end game here. Perpetual debt increases? I mean I could barrow money and live richer with an ever increasing debt till I die, but I would never be able to pay it back. My children would have to pay it off I guess?

Is there a point were the tax cuts etc... will grow the economy enough to begin paying down the public debt and reducing the deficit spending to 0 or is it the rebuplican plan to just forever increase the debt?

There will never be a time in history were conservatives hold power long enough to make it work so what we end up with is an ever increasing budget deficit and debt. Its a fact so why do you even try to use trickle down economics other than to make the rich richer?

I'd love to understand the end game of this concept. I liked it when we had a balanced budget (after 8 years of Clinton)and a surplus that could have been spent on the debt and social security.

Please explain it to me. Were and when is the end game (debt payment and surpluses?) of Conservative economics plans?

Originally posted by FreeMason
However, if we continue following Kynesian economics, our debt will one-day out-grow our ability to inflate our economy, and then we will fall.

I agree. It's the spending part that puts the voodoo in Reagenomics, and what makes GWB spending precisely everything his dad cautioned Reagen against.

But the model needs to be expanded. In principle there's a caveat that cancels some of this out by growing the empire. Which (without saying so, and promising he wouldn't) Bush is trying to do.

Uber capitalism (like communism) works well for those on top of the pyramid as long as there's a continuously growing base of support... China, India, etc. (Iraq?)

It's not so much that we beat the Soviets on spending as we halted their expansion. And an immobile sleeping shark eventually dies.

The US is no different. We've got to keep eating up the world and it's resources with our socio-political influence to maintain this economic model. In hindsight, we had a good run. On the forefront, we'll still be on top of the food chain for centuries. But I think at some point change is inevitable now. In many respects the US needed the counterbalance of the Soviets. It sure took a lot of the heat off us. But alas, be careful what you wish for.

And then there was one. This is where we get into the New World Order discussion. When there's basically one government, and the world is split into the three branches of consumers, retailers and producers...

Unless we're well into some aggressive space exploration, colonization and even other world 'domination" by then, I think the most workable economics model will have to be a form of socialism. The Star Trek model.

I'm not saying switch now. I'd just like to see a bit more flexibility in our economics. More realism, less dogma.

I know it doesn't seem 'realistic' to be discussing the required economic principles of the year 3000, but I'm pretty sure we're not as enlightened as we think we are. And are currently revelling in what will one day be called a dark, dark age.