I agree, but CNN is reporting that the Rs are now talking about raising rates — but only on those making over $500K. Do you think Boehner will hold to no rate increases, or is he going to cave? My heart is aching.

This is the crux of the whole issue. If Boehner holds on tax rates, we can see our way clear ahead. If he caves all is lost. Let’s hope Boehner sees this!

It’s always the same.

Large – nay, huge – nay, existential – fiscal decisions facing our country? Well then – How will this affect the bleeping midterm elections??? How will my bread get buttered?

I’m sick of it. I’m sick of all of it. And this? This article? It’s not just part of the problem, it is is the problem.

If the House Rs can barter allowing a tax rise at the top of the income spectrum into real entitlement reforms, most importantly restraining Medicare spending, they should do it. What’s more, they should be applauded for it. And they have an incredible amount of leverage to barter just such a deal, and so much less leverage to push for the cliff-diving obliviion suggested above.

Spoken in my capacity as an American 1st, a conservative 2nd, and Republican sometimes.

I know Tom Cole is, but who cares about him…

I believe Hill Republicans are far smarter than that, especially given that they are well on their way to reclaiming the high ground by having already agreed to revenue increases through base broadening, hitting the wealthiest the hardest. Obama will have a much harder time playing the silly envy game.

To make sure he hears us, contact Boehner at this website, even if you’re not in his district: http://www.speaker.gov/contact which has the usual methods, email, twitter, etc.

“He will cave because he doesn’t know how to do anything else.”
This.

Let’s get rid of the state and local tax deduction if all of these others are going. It is time that high earners in California, New York, Hawaii pay their real state and local tax rates, not subsidized by the rest of us as a deduction. It will also put some pressure on other states to cut their rates.

Great comment. You are right that O will not bargain. We do not have sufficient time now for a bargain.

If you want to see how D’s bargain, look at the Defense of Marriage Act. It was proposed to take the pressure off a Constitutional amendment to do the same thing. Now the D’s are taking back their bargain, just like they did under George HW Bush and Reagan. I am still waiting for THOSE “future” budget cuts, and it is only 25 years later.

If Obama is an enigma to me Boehner is even more so. I just don’t know where Boehner truly stands on the issues. We all believe he is eventually going to “Cave” on taxes which would totally destroy the results of the 2010 elections and probably relegate the Tea Party to the history books. I am a student of history and everyone should read up on Germany in the early 1920s. Germany’s printing of money to pay its bills is exactly what we are doing right now. The German Mark subsequently crashed so badly that the paper on which the Mark was printed became more valuable than the denomination on that paper. We are in the same boat right now and the US dollar is in danger of crashing. There is no gold or anything else backing up the US dollar. How would you like to have your savings and investments totally wiped out which is what happened in Germany. We have to stop Obama in his tracks right now and the House of Representatives has the power to do it. Let’s all contact our Representatives and insist that we start reducing spending in a drastic way right now!!

Reminds me of Wimpy in the old Popeye cartoons — “I’ll gladly pay you Tuesday for a hamburger today.” Obama’s version is — “I’ll gladly cut spending Tuesday for a tax hike today.”

Pardon my callousness about “The Cliff”. This monolith can only scare those who believe that Hitler was the anti-Christ, Y2K the world would end, Mayan calendar is a prophesy (not just a tribe saying “enough with the numbers for now”), and my favorite, the people of the world constantly seeking to be part of the END.
I know they all seem to be the same thing. That is because they are. They all have the same thing in common in that they never come to pass.
I want gridlock, canoes flung over the waterfalls, wailing and gnashing of teeth, etc. Then all the hand wringing and sobbing can stop like a spoiled child realizing the adults stopped listening long ago. Take a breath and ride out the rapids, it’s calm just over there, I can see it, it’s so close.
As I age (ripen, if you will) the days and years do seem to pass ever more quickly. My advice to folks near and dear is just prepare your financial future as though you don’t know what will happen. Oh, that’s right! We don’t and never did.

Hitler might still be out there living with the Mayans . . .ooooooo Scary!

All of what is said here is true however Obama and his brown shirts plays chess a few more moves out in the future than what is stated here. Obama and his team know their history. They understand the 1992 cost to Bush 1 in the read my lips disaster that brought a 3rd party and Ross Perot to the game taking 19% of the vote from Bush 1. If Obama can get the House Republicans to lose what little credibility they have with the tea party by raising just one set of tax rates and split off the Tea Party conservatives from the Republican party as a 3rd party the democrats can run the table for many years to come. JUST RECENTLY Van Jones had accolades for the Tea Party. That did not happen in a vacuum, that was a point of conversation within the bowels of the democrat party. Obama/Axelrod are a little more sophisticated than you give them credit for. They understand UNLIKE THE HOUSE REPUBLICAN LEADERSHIP how desperately close the 2012 election was. Stunning to watch how truly myopic, dense, inarticulate and clueless the Republican house leadership is to the attitudes out here in the real world with conservatives. There are no words in the English language to explain the magnitude of their inability to articulate fiscal concepts to Joe six pack. The anger out here in the real world is deep and wide at their spineless “will” to do what is right.

Oh, yeah, and the people have spoken.

Let. It. Burn.

Think about what I’ve said when we tank in the mid-terms. Boehner’s not stupid. He knows what I’m saying.

And many of the voters are not stupid, either.

They know there is a reason the 2% don’t want the rates to go up but are willing to have the tax code manipulated, instead.

And, yes, it is tax code manipulation when it is something being done to allow the 2% to find more ways to avoid paying more in taxes.

The tax code needs to be fixed (not manipulated in the short term for the good of the 2%). And that is a task that will take a lot more time than 2 weeks. But it desperately needs to be done.

That’s a different story, though, because we have two weeks and only a few minutes of that two weeks. These guys don’t work more than 30 minutes every other day.

Get the rates hiked. It should be done. Make sure the Republican voters know that it’s the smartest thing to do. They’ll agree with you for the most part – enough to get you re-elected, if that’s your concern. Then work on the tax code.

Now is the time to go “Fair Tax” of 15% across the board, no deductions!

We are spending 50% more than we take in.
That means we must cut our spending by 33% in order to break even.
That means 33% off medicare, 33% off welfare, 33% off social security, 33% off medicaid, 33% off salaries, 33% off pensions/benefits, 33% off travel (4 million vacation to Hawaii).

33% off everything! Period.

I am freaked out the there are two articles out today. One from POlitico saying White House won’t budge on rates and one from the Hill saying fiscal cliff negotiations are moving forward. If Boehner folds, is it too much to ask our Republican congressmen to remove him as speaker?

Completely agree!

You can imagine what Democrats would say about introducing a sales tax in place of the income tax…

Alas, it appears that we must stick to trying to make income taxes fairer, simpler, flatter and lower.

The current House GOP contingency plan is to vote “Present”, but I’m not sure the opportunists in both houses, seeing a chance to look either “bipartisan” or “principled”, would not try to go against the party line.

Can agree, short term, pass a bill in the House to keep all the rates the same and then recess the House. Then, the “Penny Plan” first to ease into that “Fair Tax” to start weaning the Federal Government.

No, unfortunately, it’s a fictional language, invented for the Eldar.

Tolkien based it on Gaelic, though.

http://en.wikipedia.org/wiki/Sindarin

According to google translate it is welch, and does not make any sense.

Goodness.

Reforming the distortionary, inefficient and unfair impacts of tax loopholes now becomes manipulation of the tax code on behalf of the top 2%.

I’m not sure the top 2%, as you call them, want to see their tax burden rise anyway.

I suppose you believe that fixing the tax code means leaving all the loopholes untouched and hiking rates.

Really, we are not amused. Thank you, and goodbye.

(Oh, yeah, and “Country First” lost us an election without any noticeable contribution to the national interest, so put that in your pipe and smoke on it.)

You guys are totally ignoring the fact that you’re saying the Republican Party should just keep on doing what it’s always done rather than face reality, bite the bullet, and compromise – which is what the public (Republicans included) wants them to do. Their refusal to compromise is why their approval rates hit the single digits.

Do you really want the Republican Party to lose the war just to win this battle?

clowngirl, we can’t get where we need to be by just focusing on one way. We must use every way we can find to get back on our feet. Raising the rates on people who won’t miss the small amount (relatively) is only one way. The other is to cut spending.

Boehner is a Rino coward who does not have a single conservative bone in his body,if the house reelects him to the speakers job , I am through with the GOP it will be proof the Republicans have the same goals as Baracko Clause , to make this Country a fascist State. Throwing Tea Party congressmen out of committee seats reinforces my point. Target Boehner for removal from Congress.

Rocks and hard places. Congress must be a very difficult place for anyone with an actual working conscience, especially if that person believes in limited, Constitutional Government. What to do? The other side will slam and smear us, aided and abetted by the usual suspects in the criminally negligent media. But then again, who in Congress did not know what he or she was getting into? Given the gravity of our nation’s situation and the fact that the longer we wait to implement real solutions, the more drastic and painful it the cure will be, I can only suggest we fight for as long as we can (under no cirmumstances giving the Democrats the cover they so desparately need – see Senator Rand Paul’s anouncement at RCP), and even if it means going over that stupid cliff, taking it like adults, come what may:

THE SCENE: Having endured a seemingly endless series of injustices, hardships, and indignities, the deposed emperor Kuzco and his unlikely ally, the gentle llama herder Pasha now find themselves strapped to an immense tree trunk floating down a river.

“I don’t know about you, but I’m getting all funned out.”
“Uh oh.”
“Don’t tell me. We’re about to go over a huge waterfall.”
“Yep.”
“Sharp rocks at the bottom?”
“Most likely.”
[PAUSE]
“Bring it on.”

From “The Emperor’s New Groove,” copyright Walt Disney Pictures.

This is just not true.

Facing “reality” and compromising iS what Republicans have done far too often. It’s when they have stood their ground (like when they held the line and gave no cover to the Porkulus) that they have succeeded electorally. (Read, historic electoral gains)

Obama is asking for basically dictatorial powers ( raising the debt ceiling whenever he feels like it without Congressional input, for example)

Caving here would NOT win any war – it would be our Munich.

And, as “a necessary evil” it is common sense for it to be considered as part of the “Conservative Tax Policy”?

“We must make sure Boehner does not buckle this year. It gets easier after the New Year.”
I have been saying this all along. The Democrats and Obama will get into more trouble on Aptil 16 when 28 million households, who are used to getting income tax refunds, end up having to write a check to the federal government to pay AMT. In blue states, their check will be several thousands of dollars. Most of those folks will NOT have the ability to write that check. Republicans are going to come out of January 1 looking pretty bad. However, when the IRS starts to collect on those balances due, Obama and the Dems will also take a great share of blame. The American people will say, “A pox on both your houses!” The problem for the Dems in that scenario is that Barack Obama is the president and the leader of the Democrat party. He, Obama, may not ever recover from that – especially given the fact that in 2014 Obamacare comes into full effect – which means the Democrats will not recover either. How do we know this? I think the GOP still suffers from the “Bush hangover.” The “Obama hangover” will be more potent because it will be the most recent.

No bill will be introduced “January 2d” as it can’t be introduced in the House without the consent of the Speaker. To think that Boehner would not have such a bill introduced in December and then do it in January is just silly.

Facts aren’t subject to majority vote. They either are facts or they aren’t. There is simply no revenue model available that support current spending. Period.

Fortunately (or unfortunately) the US will not be without the means to pay for it, as long as it is denominated in dollars, of which the US is the issuer. As you noted, this raises the question of inflation, which hasn’t jumped up yet because there is so much idle capacity in the US.

I would prefer to shift the focus from the deficit, to growth and employment. Then we could start to reduce spending in the public sector as private sector spending is able to replace it. Gradually shrinking the government spending to <19% GDP, which seems to be about as much as the government has ever been able to collect, no matter what the rates are.

I believe that if we are too ambitious with public spending cuts, before private spending is stronger, it will end up depressing revenues and increasing safety net spending (the latter will be politically unavoidable), and make the deficit bigger instead of smaller.

Buy a helmet quick before the sky falls on your head.

Merrieanne — people who want tax rates to go up aren’t going to vote Republican anyway, so the party isn’t risking votes by sticking to principle. However, they will most certainly lose votes in the midterm (from their base) if they support tax increases without getting serious, significant, spending cuts that take place *at the same time* as any tax increases. Not ten years out, but now.

Secondly, of course you think taxes should go up, because someone else would be paying them. It’s not hard to convince the 98% to raise taxes on the 2%. But a married couple making 250k living in NY, CA or other high-cost areas is not “rich”. You said they don’t need that money — but who are you to say? How is that your call? Why are you entitled to someone else’s hard earned money? Why do you even have a vote on somebody else’s paycheck? This is a sickness that people have, it’s repulsive.

By your logic, the government could do anything it wants as long as 51% of the people demand it.

if you’re really a retired tax accountant than you should know better than what you say about tax rates. You could set the tax rates at 99%, but it doesn’t mean a thing if the tax code allows a person to shelter all their income from that rate. This is how Obama’s cronies at GE — one of the biggest companies in the world — paid ZERO taxes. C’mon, you can’t really be a tax accountant.

Lady,
15% is way too high. Learned economics professors did a study about 20 years ago about a retrogression to a stable flat tax. From the current tax situation I’m sure the number didn’t change that much with regard to percentages.
The educated guess/theory (which is all any moronic economist can muster these days) was that the flat rate STARTS at 15% and gradually, maybe 5-7 years, sinks to about 5%.
It was theorized (I happen to agree) that the actual sustainable tax rate could be at 3% ACROSS THE BOARD. Your occasional Mars mission or rebuild the next terror bombing could be a temporary millage or some such mechanism. Mostly bond sales would take care of most things on a routine basis as needed.
This theoretical flat tax also was a nearly direct indictment of how corrupt the current system is. It was not received with the pomp and circumstance that I personally would have liked. Of course I’m not sucking the public teat dry for a living either.
The 5% number was an appeasement for any potential political backlash. This was, after all, a serious proposal. Surely the bloodsuckers would go for a constant 2% overkill padded on. Technically it was actually a 40% stipend just thrown at congress to shut them up.
Still a blatant ripoff but a cheaper one without loopholes.

Sliverlining has a memory.

Speaker Boehner is going to cave, and Obama is going to cave too. This way both parties can take credit for avoiding the cliff. What I’m reading is that the tax rate will go up on the top 2%, but not back to the 39+ %, perhaps max out at 37%. Obama will give in on raising the age for Medicare to 67 (I don’t know how employer’s will think of that). Progressives are going to scream bloody murder about the Medicare cave, fiscal conservatives are going to scream bloody murder about any tax increase. It will be interesting to see how both sides of Congress react to this ‘compromise’.

BTW: 90% of the American people don’t even understand the difference between
tax rates and deduction caps, but they do know they are sick to death of the fight.

He is going to so we might as well get use to it. Unless and until we get rid of (primary) Boehner, Canter, McCarthy, McConnell and any other RINO in office…we done. Remember…these guys spend real well also.

Concerning the GDP formulas…and anything else out there…I don’t believe it anymore. Obamacare was going to cost X amount of dollars…it’s flying past those figures. Unemployment is down coincidentally for Obama’s re-election. Never does anyone say why. He is not a capitalist. So…without EXTERNAL revenue…how are we going to get out of this mess? The Federal employee roster has grown…that is…in essence..an increase in OUR TAXES. We pay their salaries. Infrastructure…infrastructure ..so why are are the Chinese building bridges in San Francisco?

There have been so many good ideas put forth on this panel and by some Republicans. Where is our energy? Why is the price of gas still over $3.00 a gallon WHEN we are an EXPORTER. Where is that money going?

Without capitalism…it is as if Obama is for cannibalism..we are eating our own weath…THERE IS NO INFLOW. Tax people…until when with a $16T debt…until ALL the money is gone? I bet if we took all the wealth in the USA…all of it…it would not pay down the debt and Obama does not believe in capitalism. He believes private companies should “kick in” to his agenda…but look what he has done to private business. (1) They move out of the USA or they take a MAJOR HIT on their bottom line. Anyone want to start a business today is nuts…and he knows it..we are just marching in time until it’s all over with….or…well we know the OR

> I believe that if we are too ambitious with public spending cuts,
> before private spending is stronger, it will end up depressing
> revenues and increasing safety net spending (the latter will be
> politically unavoidable), and make the deficit bigger instead of
> smaller.

This is a very real concern. This is one reason why we need to stop budgeting these programs the way we do. They need to be funded independently, by a recurring tax base, and then pegged to that income.

The “FICA” tax, for example, is a good start, but we need to further, and peg the tax and the spending together, with semi-annual or annual increases that are automatic, unless undone by Congress. This will nearly eliminate deficits in specific programs, and especially over the long term smooth out the funding. As time goes on the rate will stabilize. Social security contributions, for example, which were cut last time we had this deal making debacle, need to be pegged similarly. And all future payments promised in similar terms – percentages, instead of absolute dollars.

SNAP and other transfers payments also need to blocked off the budget in this manner. Unemployment insurance, which was supposed to be insurance, is almost completely decoupled from it’s roots, and it needs to go back immediately. It should pay for itself, employers who can’t make the payments need to buy insurance for it, and benefits needs to be pegged to it.

One reason why we keep losing these debates is because we have to argue against spending, and people just want spending. It’s always going to be popular. Having correct, mathematically sound formula driven spending is a good way to fight this. Make the increases something they have to fight for, and make them hard to get, and subject to minority input. The so called “doc fix” is example of how to do it wrong, as is the AMT debacle as well. Ironically, the Independent Payment Advisory Board is an example of how to do things which will withstanding negative public pressure – make Congress act to countermand decisions. This is a smart move by shrewd politicos.

As far as revenue goes, the 20% GDP figure is an interesting one, but the biggest problem we have is we need the masses – the vast under and middle classes – to contribute much more heavily than they are now. The truth is that we have an economy that is very uneven. The average and below-average American is spending far too much on entertainment, luxury goods, housing, transportation (cars) and non-essential household goods. The above-average Americans are also doing this, but they can actually afford it. For at least the next decade, we need to tax the hell out of unproductive activities – lotteries, smoking, drinking, cable TV, premium entertainment, reality television. We need to eliminate all taxes and burdens on the bare essentials. We urgently need to tax the disposable junk economy – things that are designed to be obselete, and reward the poor planning, obese, mouth-breathing lower-classes. The $100 lawn mower from Wal-Mart, which is made in China, and is completely disposable has to be penalized to the point that it is at parity with a well-built domestic unit that can and is actually serviced yearly, and maintained, and kept running for a generation.

All across the board, our tax structure is rewarding a cheap, disposable, import-driven economy instead of a value-based one.