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Posted at 9:46 AM ET, 12/ 9/2010

Why liberals don't like the tax cut deal -- in graphs

By Ezra Klein

CAP's Michael Linden produced a nice chart showing why the tax deal is tough for liberals to swallow:

taxdealbenefits_blog-011 (1).png

The red and blue on the chart are a bit confusing, so read it closely: On the left, you're seeing the amount of money Obama is spending on tax cuts for individuals (so the total doesn't include business tax cuts) next to the number of people who will benefit. On the right, you're seeing the same for the Republicans.

Obama's got 156 million people splitting $214 billion in tax cuts and benefits. The GOP's got 4 million people splitting $133 billion in tax cuts. On a per-person level, the GOP's tax cuts are much larger. An individual billionaire is getting a far better deal than an individual unemployed American. And that's galling. The problem is that to take the money from the billionaire means to also take the money from the unemployed individual. Actually, taking the money from the billionaire means taking the money from a lot of unemployed Americans.

To see how much, behold the return of the "snowman" graph, now updated to compare the original Obama plan, the original Republican plan and the compromise (click on the chart to enlarge it). All groups are getting more under this framework, but on an individual level, the wealthy are getting much, much more. The question, at the end of the day, is whether stopping them from getting it is worth cutting benefits for the unemployed, and tax cuts for middle-income Americans, and the Earned Income Tax Credit. I don't think it is, and that's particularly true because it's not, to me, about the size of the transfer so much as the possibility for stimulus. But given the level of inequality in this country, and the potential that deficit reduction deals won't be worked out by a progressive congress, I see how you could come down on the other side:

GR2010120808056.gif

By Ezra Klein  | December 9, 2010; 9:46 AM ET
Categories:  Charts and Graphs, Taxes  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: The tax deal in one graph
Next: Tom Toles is worth a thousand words

Comments

In addition to everything else, the wealthy getting more gives them more money to lobby for yet more benefits. They get much more political power. The less well off don't have the spare cash to spend on political favors.

Posted by: fuse | December 9, 2010 10:36 AM | Report abuse

The real problem is that Obama and Congress let it to come down to the last minute, which allowed Republicans to put a gun to their head.

They are failed leaders.

Posted by: DAinLA | December 9, 2010 10:46 AM | Report abuse

Well the rich pay the most under the tax code so on the flip side they would benefit the most from a tax cut.

Posted by: ronjaboy | December 9, 2010 10:55 AM | Report abuse

This liberal notes:
1. With no deal the charts for each are 0 people and $0B. Equal but hardly better. In fact, you could reverse the charts into people hurt and $lost by not reaching a deal.
2. This ignores the ultimate reason and expected benefit of the deal, which is to grow the economy and increase employment which will increase incomes of those people included in Obama's priorities.

Posted by: gregspolitics | December 9, 2010 10:57 AM | Report abuse

ronjaboy, they don't *have* to benefit the most from a tax cut, and certainly not from a stimulus package.

The difference for me is that the current proposal is temporary. I would much rather have a temporary measure that gives everyone more now, when the economy needs it, than a proposal that may break down more to my liking but which is permanent. The tax cuts need to expire eventually. This plan allows for that possibility and is better stimulus in the short term than either of the other plans.

Posted by: MosBen | December 9, 2010 11:01 AM | Report abuse

ronjaboy

That's only one way to look at it.

There are compelling reasons to suggest your logic is flawed and will only lead to further deficits, a further eroded SS system, and more redistribution of wealth to the high end.

Another way to look at it is that since the high end income earners have been blessed by this country with so much fortune, they should be willing to pay a little bit extra in taxes to help keep that system well functioning.

And reverting back to the Clinton era tax rates is not an unreasonable thing to ask of our billionaires and multi-millionaires, especially given that the Clinton tax rates were among the lowest in the western world and were in place during the greatest economic expansion in history.

There is abundant proof (analysis by the CBO and the majority of economists) that the Bush tax cuts contributed to massive deficits and debt, and that in turn hurt our ability to mitigate the Great Recession, which means the Bush Tax cuts are directly responsible for diminished revenues of such quantity that the duration and depth of the Great Recession has been amplified and such measures as diminished SS payments are being experienced.

Now, you are free to stand by your oversimplistic logic (that somehow it is required that higher earners always get higher tax breaks), but don't pretend that it is good logic or good policy.

Posted by: lauren2010 | December 9, 2010 11:08 AM | Report abuse

ronjaboy wrote: "Well the rich pay the most under the tax code so on the flip side they would benefit the most from a tax cut."

BS. Stop peddling that myth.

"Middle-class households that earned between $34,300 and $141,900 paid 50.5 percent of all federal tax revenues in 2007 (the most recent year analyzed), according to the CBO study released Thursday, and households that earned between $34,300 and $352,900 paid 66.7 percent of all federal taxes."


Posted by: gasmonkey | December 9, 2010 11:21 AM | Report abuse

"Good policy" to lauren2010 is buying votes with other people's money, and stringing them along with that pittance in the time-honored democratic tradition of turning them into "victims." It's all in the DNC playbook. That playbook uses new math, not the traditioanl math that uses percentages and multiplication - you know, the kind that proves that if you make more, a percentage of your income is larger than someone with a smaller income. Tough concepts that are too daunting for liberals. They'd rather play the role of Peter Pan and tell you when you've made "enough." You know, no one stops liberals from paying MORE in taxes every year, especially the rich ones. Yet, the IRS never gets any extra cash from these folks. Classic liberalism: it's always a good idea until it hits me.

Posted by: dnara | December 9, 2010 11:21 AM | Report abuse

This tax deal expires in two years? Sure thing. Does anyone really think that any of our shortsighted politicians will raise taxes in a Presidential election year? Please raise your hands. (Dearth of raised hands noted).

Posted by: jharris99 | December 9, 2010 11:27 AM | Report abuse

gasmonkey wrote:

"Middle-class households that earned between $34,300 and $141,900 paid 50.5 percent of all federal tax revenues in 2007 (the most recent year analyzed), according to the CBO study released Thursday, and households that earned between $34,300 and $352,900 paid 66.7 percent of all federal taxes."

This is BS.

In 2007, the top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent. More than one-third of U.S. earners paid no federal income tax at all!

Posted by: dnara | December 9, 2010 11:28 AM | Report abuse

gasmonkey wrote:

"Middle-class households that earned between $34,300 and $141,900 paid 50.5 percent of all federal tax revenues in 2007 (the most recent year analyzed), according to the CBO study released Thursday, and households that earned between $34,300 and $352,900 paid 66.7 percent of all federal taxes."

This is BS.

In 2007, the top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent. More than one-third of U.S. earners paid no federal income tax at all!

No one should be exempt from paying something....anything. Everyone had to have some skin in the game. When most government services are aimed at lower income populations, perhaps they'd be more inclined to actually use them or sign up for them (hello Medicaid, I'm talking to you) if they knew they paid for them, even if it's $100 per year.

Posted by: dnara | December 9, 2010 11:30 AM | Report abuse

Instead of wasting time talking about a public option, or ending tax cuts or securing social security he should have just told us he wanted to widen the disparity of rich vs. poor in America.

Posted by: cautious | December 9, 2010 11:34 AM | Report abuse

Who gives a fat-rat's bottom what "professional" leftists want?

Posted by: jibe | December 9, 2010 11:40 AM | Report abuse

Klein your a Marxist. Your quote "An individual billionaire is getting a far better deal than an individual unemployed American. And that's galling"
That billionaire earned their money and not to have the government redistribute it amongst the masses.

Posted by: IamWright | December 9, 2010 11:48 AM | Report abuse

the "compromise" doesn't look like much of a compromise. in fact it looks exactly like the gop's snowman....

Posted by: freaktown | December 9, 2010 11:50 AM | Report abuse

And how much will you save, Ezra?

Posted by: kmblue | December 9, 2010 11:53 AM | Report abuse

Instead of Robbing Peter to Pay Paul, our government should be cutting spending instead.
And, its about time, everyone who receives income should pay a tax on it, no matter how small.
49% of this country does not pay Any Taxes
on income.

Posted by: ohioan | December 9, 2010 11:54 AM | Report abuse

Can anyone explain why people making over a million a year get an extra $40K a year from this plan? Does anyone really think that an extra $180 a year will help people living below the poverty line? I have to respectfully disagree with Ezra on this one. If this would bring unemployment down to 4%, I'd say this was a good deal. But the fact of the matter is that it won't make a huge dent in the unemployment rate because it's out of his control. Recent recoveries have been jobless and this one isn't going to be any different. We are looking at another 5 years of high unemployment so we can't keep kicking the can.

Also, I keep hearing people talk about how most of the country doesn't pay taxes. I'd really like to see where people are getting those numbers because it's just not true. In fact, our current tax code is heavily biased toward the wealthy. After tax expenditures, the highest income bracket enjoys a 12% change in income whereas everyone else only sees roughly 6% change. Using Connecticut as an example, after federal deductions the top bracket only paid 4% of their income in taxes whereas, the bottom paid 12% and everyone in the middle paid about 9%. Sure the wealthy pay more actual dollars because they make staggeringly more, but when you look at these things in terms of percentage of income they are incredibly unbalanced in favor of the wealthy. (And that doesn't even get into sales tax)

So, when Ezra talks about saving the EITC, it kind of makes me cringe because this is a relatively small tax credit compared to say the mortgage interest deduction and the exemption of employer sponsored health insurance. This tax plan would be a lot more palatable if they were going to couple it with an overhaul of the tax code. But of course they're not. The only change most Americans are getting is spare change.

Posted by: megankeenan | December 9, 2010 12:01 PM | Report abuse

I'm not a "professional leftist", not even an amateur leftist, hell, I'm not even a Democrat. But I voted for Obama and I do feel extremely let down. I never thought he was a progressive, maybe just a limp liberal. But I did expect him to stand for the things he said he would, and he has not. Maybe if he wanted the Dems support in the Congress he could have mentioned this deal to its leadership, instead of appearing annoyed that nobody seems to appreciate all he has "done" for them and us. I think this deal will ultimately pass, and maybe it should (I have no idea why the estate tax provision would be the major objection since any real rich person will avoid that anyway) but what will linger is the bad taste in the mouths of many folks who voted for Obama and now just feel like we won't one more time vote for the lesser of evils and are tired of our votes taken for granted because after all "who else will they vote for?" The answer, for me at least, may well be I won't vote for anyone for the first time in my life.

Posted by: riano | December 9, 2010 12:02 PM | Report abuse

I don't see the economic benefit of taking this big a potential hit on the deficit when the unemployment extension merely funds the existing structure, and adds no new benefits at all.

Let all the cuts expire. President Obama will learn to his dismay that breaking his word will cost him.

Posted by: uberblonde1 | December 9, 2010 12:04 PM | Report abuse

Will you please deal with the real problem with this "deal" -- the fact that it sets up a situation in which Republicans will treat restoring the pay roll tax to present levels as a tax increase, then wail that Social Security is going broke, then bully idiotic Democrats into gutting the nation's most successful social welfare program to fix the almighty deficit.

Maybe this scenario is hooey, but none of the applauding punditariat has refuted it. Can you?

Posted by: janinsanfran | December 9, 2010 12:07 PM | Report abuse

This is the payback, pure and simple, for the 2 years of the Democratic Leadership (Pelosi, Reid and Obama) shoving things down the Republicans Throats, Ezra. That you do not think that such a turnabout is fair play is not consequential. Although most Americans would like to see this nebulous "Rich" sector *not* get the Tax Cut, 2/3rds of them are willing to give it to them if that is the only way they will get their Tax Cut. Go look at the latest Gallup Polls on this. Funny, but in that Poll, the Estate Tax was rated even Higher, and all the Liberal Talking Points right now, (START, DREAM Act, and the Repeal of DADT) were ranked lower. Even more telling, more people thought those points were of very little importance or not important at all than though they were very important.

The Age of Information is Grand, isn't it? People buy the Liberal Spin less and less the more they get informed. Your Graphics are Cute, but the reality is that those 158M people has a whole lot of people that, despite your impressive graphic showing the $138B going to the 4.8M, want *their* cut of that even bigger $214B and are willing to compromise to get it. So die hard Liberals be danged is pretty much the attitude. After November, you would have thought they would have caught on and learned, but maybe they need another lesson or two...

;'{P~~~

Posted by: Clearbrook | December 9, 2010 12:09 PM | Report abuse

dnara wrote:

"In 2007, the top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent. More than one-third of U.S. earners paid no federal income tax at all!"

You are either ignorant, or you're being deliberately deceptive. Most people who live on earned income are not wealthy. Wealthy people have wealth, thus they live primarily on unearned income, things like inheritance, dividends, gains, etc. Do you really imagine that Warren Buffett, who "earns" a mere $100K a year, should pay a lower tax RATE than his secretary, merely because the grand total of dollars he pays is greater?

Your argument is completely deceptive. If I earn $100K and pay 28% tax on it, I paid in $28000 in tax. If a billionaire earns $500K and pays 10% tax on it, he pays $50,000. Yes, he paid more tax. Yes, he contributed a greater percentage of the total tax (if the total tax is $78,000). Nonethlesss he paid a far lower rate. Only the ignorant equate income with wealth, or consider earned income and unearned income to be the same thing.


Posted by: gasmonkey | December 9, 2010 12:16 PM | Report abuse

The problem with this is that the gifts to the wealthy by and large won't stimulate the economy. This downturn has been largely *demand* driven - people stopped spending. The wealthy have plenty of money right now to expand or start new businesses. There's just no reason to, since nobody buying anything. Obama's (the Democrats') tax cuts for the lower income brackets (which the wealthy also receive, by the way) would drive the economy harder, but the GOP's gifts to their one and only constituency are just that, gifts. "Here, put it in the bank and enjoy."

The real gall here is that anyone under an income of half a million would ever vote Republican. Yet they get convinced to by all these phantom issues the GOP's propaganda department (FauxNews) is so good at airing. "The Muslims are under your bed, and they're trying to turn your daughter into an agnostic lesbian", and so on. I just wonder how long these people will keep falling for it.

Posted by: B2O2 | December 9, 2010 12:18 PM | Report abuse

>Well the rich pay the most under the tax >code so on the flip side they would benefit >the most from a tax cut.

>Posted by: ronjaboy | December 9, 2010 10:55 AM

ronjaboy, the top quintile, aka top twenty percent, own everything but 12.3 percent of the wealth. The top fiver percent own everything but 35 percent of the wealth. Politics are in place to avoid correcting this economic inquality with bullets. If you buy off the elected representaion to prevent the majority from halting the trend towards totally concentrated wealth, the only recourse is the inevitable formation of mobs bent on slitting the throats of their wealthy oppressors who manipulated the politics to the point they destroyed their own ability to secure their own safety. Did you think the wealthiest ever give an inch because they are just nice by nature? They formerly conceded because it was the sensible thing to do. Live to spend it, so to speak!

http://www.levyinstitute.org/pubs/wp_589.pdf
(bottom of page 32)

"..it is possible to provide a partial update of the wealth figures to July 1, 2009 based on two notable developments....

...Trends in inequality are also interesting.... The share of the top 1 percent advanced from 34.6 to 37.1 percent, that of the top 5 percent from 61.8 to 65 percent, and that of the top quintile from 85 to 87.7 percent, while that of the second quintile fell from 10.9 to 10 percent, that of the middle quintile from 4 to 3.1 percent, and that of the bottom two quintiles from 0.2 to -0.8 percent. ..the share of households with zero or negative net worth, from 18.6 to 24.1 percent."

Posted by: TopTenPercentOwn70PercentOfUSassets | December 9, 2010 12:19 PM | Report abuse

Letting the tax cuts expire will force the teahadist House next year to start from scratch. Then the Senate Dems can "just say NO!" and get much more of what they want.

Posted by: Garak | December 9, 2010 12:21 PM | Report abuse

Please, IamWright, tell us how those WalMart heirs, currently 4 of the top 10 richest Americans, "earned their money."

Posted by: StevenEMedlock | December 9, 2010 12:22 PM | Report abuse

Tax "cut" deal? Who's taxes are being cut? The issue is whethter they will be raised, not "cut."

And you call yourself a journalist? Make that JournOlist.

Posted by: silencedogoodreturns | December 9, 2010 12:26 PM | Report abuse

Tell me how the democrat god, George Soros, earned his money.

Posted by: IamWright | December 9, 2010 12:27 PM | Report abuse

can we agree that the american left is losing all right to claim foul when they are called socialists? the logic of this post is appalling... you are throwing individual rights into the dust bin of history, right next to dave weigel's intellectual integrity. Do property rights have any role in your political belief system? Any recognition that there is a difference between a tax cut that is essentially a welfare payment to individuals above and beyond their income tax liability, and lessening someone's income tax payment through a reduction in rates, and this should play some role in policy?

The logical conclusion of this post is that government should annually redistribute so we have equal income / wealth for all.

Posted by: cdosquared5 | December 9, 2010 12:27 PM | Report abuse

"Another way to look at it is that since the high end income earners have been blessed by this country with so much fortune, they should be willing to pay a little bit extra in taxes to help keep that system well functioning."

Ah, and if they were *willing* to pay there would be no need to debate. The issue is you wanting the government to force the rich to pay for your priorities.

http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm

But no worries, many of the hated rich have pledged to give away most of their fortunes (much like the hated rich of yesteryear).

http://givingpledge.org/#enter

Feel free to send them all letters and suggest that their best use of funds is to send it to the government. I have no objections to the rich giving their money to the Feds - it's their choice. That said, I don't expect an uptick in donations to the Treasury anytime soon.

"and more redistribution of wealth to the high end."

Outside of the recipients of corporate welfare (admittedly a fast growing constiutency these days), wealth isn't being *re*distributed to the high end. A tax cut on the rich reduces the change from the original distribution which would have occurred absent redistributive taxation. Income taxes on the lower and middle classes aren't enough to pay for TANF, SNAP, Unemployment Insurance, Medicaid, SCHIP, etc. On net, the redistribution is from top to bottom.

Posted by: justin84 | December 9, 2010 12:31 PM | Report abuse

Who are these retarded folks who say that the wealthiest Americans are 'getting the most' when it comes to tax cuts.

NO ONE IS GETTING ANYTHING!!!!! Taxpayers are only getting to keep more of what they earn. If you earn more, you pay more taxes. If you earn less, you pay less.

Why is that so f-ing hard for people to understand.

In addition to that, I bet perception would change dramatically if the idiot libs started referring to the wealthiest Americans and "prospective employers".

This is not a handout you Dem. morons, it's the Government only taking less.

Jesus, am I speaking Chinese?

Posted by: Personal_Fowl | December 9, 2010 12:32 PM | Report abuse

Funny how I don't remember anything close to the 9.8% unemployment when the republicans were running congress.

Posted by: peterg73 | December 9, 2010 12:33 PM | Report abuse

personal fowl:

No you're not speaking Chinese, jusr ignoramus. We have no one who can traslate that for you on this column.

Posted by: 54465446 | December 9, 2010 12:34 PM | Report abuse

You are either ignorant, or you're being deliberately deceptive. Most people who live on earned income are not wealthy. Wealthy people have wealth, thus they live primarily on unearned income, things like inheritance, dividends, gains, etc. Do you really imagine that Warren Buffett, who "earns" a mere $100K a year, should pay a lower tax RATE than his secretary, merely because the grand total of dollars he pays is greater?

Your argument is completely deceptive. If I earn $100K and pay 28% tax on it, I paid in $28000 in tax. If a billionaire earns $500K and pays 10% tax on it, he pays $50,000. Yes, he paid more tax. Yes, he contributed a greater percentage of the total tax (if the total tax is $78,000). Nonethlesss he paid a far lower rate. Only the ignorant equate income with wealth, or consider earned income and unearned income to be the same thing.


Posted by: gasmonkey
************
Where did I ever say high income earners should pay less of a rate than lower income earners? You're all gassed up b/c you can't read. Calm down. I simply provided evidence that, as expected, high income earners pay the majority of taxes - and conversely, that low income earners pay very little of the total taxes. In fact, this year is was widely report (GFGI) that almost 50% of taxpayers PAID NO FEDERAL INCOME TAX AT ALL. That is just wrong. Everybody should pay SOMETHING. The famous Buffet claim that his secretary pays a higher rate is because of loop holes and deductions. They need to be eliminated, for everyone. I'm fine with a progressively higher tax for higher earners, but if you agree to that, you have to comprehend that you're unfairly taxing one class of people more than another - all becuase you want to arbitrarily decide when they've made enough (Obama claims $250K per family).

Posted by: dnara | December 9, 2010 12:37 PM | Report abuse

The thing is, IamWright, most liberals agree that Warren Buffet should pay more in taxes. Hell, *Warren Buffet* agrees that he should pay more in taxes.

Posted by: MosBen | December 9, 2010 12:40 PM | Report abuse

Frankly, I too don't like 'the compromise' and feel the Democrats should have been able to shame the Republicans for holding the unemployement benefits hostage for a tax break for millionaires an billionaires, but I blame the Congress much more than Obama. For the past two years, the Democratic Caucus has not been able to stay on message and hold firm on any proposal. Why were they not out there fighting for Democratic values? It was the Congress that did a horrible messaging job on health care, not Obama, and it is Congress that did a horrible job with the tax cuts. They left Obama hanging and he actually negotiated a pretty good deal given the weak position the Democratic leadership and caucus left him with.

Posted by: scook1000 | December 9, 2010 12:42 PM | Report abuse

personal fowl:

No you're not speaking Chinese, jusr ignoramus. We have no one who can traslate that for you on this column.

Posted by: 54465446 | December 9, 2010 12:34 PM |

You sound like a dooshbag loser incapable of separating your pathetic political views from real life.

I feel sorry for you and your retarded parents.

Posted by: Personal_Fowl | December 9, 2010 12:42 PM | Report abuse

justin:

I've got a request for you. You're a far better numbers cruncher than I will ever be. Can you calculate the cost of the 50-75 basis point rise in the the 10 year into dollars?

Posted by: 54465446 | December 9, 2010 12:47 PM | Report abuse

Iamwright:

Not sure if your request was real or sarcasm, but Soros made his big money as a currency trader.

Posted by: 54465446 | December 9, 2010 12:55 PM | Report abuse

Face it, the GOP will sacrifice everyone else to get the very well-off and wealthy what they want. They put the middle-class in a headlock. This wasn't compromise, it was extortion. The wealthy have had their tax cuts for how long now thanks to Bush? Well, where are all the jobs these cuts are suppossed to create? Can't wait for January: the employment rate will be 100%, small business will thrive and employ millions, everyone will have health insurance, the sun will always shine and the temperature will always be 75 degrees.

Posted by: jckdoors | December 9, 2010 1:02 PM | Report abuse

Lets be serious, Democrates don't like the deal because it does not move further toward taking even more money from those who work for it, so it can be given to those who do not. These socialists want to use taxes to redistribute the wealth and thereby distroy any incentive for the poor to go to work.

Posted by: dchapman | December 9, 2010 1:05 PM | Report abuse

Also, I see a lot of people accurately pointing out that the the richest of the rich hardly pay any taxes at all.

If that's in fact the case.....WHY DOES ANYONE CARE ABOUT THEM ENJOYING A TAX CUT THEN???

I swear to effing Christ, persons can be intelligent but people are flat-out retarded.

Stop crying like raped dogs about the rich and worry about yourselves. There are a lot of very smart people (straightening tie) who understand that you can elect the crackhead bum on the corner and it's not going to impact our lives one iota.

You can take that to the bank....literally.

Posted by: Personal_Fowl | December 9, 2010 1:08 PM | Report abuse

Lets be serious, Democrates don't like the deal because it does not move further toward taking even more money from those who work for it, so it can be given to those who do not. These socialists want to use taxes to redistribute the wealth and thereby destroy any incentive for the poor to go to work.

Posted by: dchapman | December 9, 2010 1:05 PM |

Post of the day.

Posted by: Personal_Fowl | December 9, 2010 1:14 PM | Report abuse

The thing is, IamWright, most liberals agree that Warren Buffet should pay more in taxes. Hell, *Warren Buffet* agrees that he should pay more in taxes.

Posted by: MosBen | December 9, 2010 12:40 PM | Report abuse

+++++++
The thing is the liberals/socialists/Marxists will tax the billionaires and then come for the millionaires and up next, well you get the picture, until they run out of other peoples money.

Posted by: IamWright | December 9, 2010 1:25 PM | Report abuse

The compromise fails the test of being the best and most efficient way, to benefit our economy and thereby all Americans. We are adding 900 Billion in debt. It will soon have to be paid. Whose is on the hook? The American Taxpayer. There is no free lunch and no one in Washington should view this as a victory. It is the continued failure of our government. Best to pay the taxes now. They will be significantly higher in a couple of years.

Posted by: chucko2 | December 9, 2010 1:27 PM | Report abuse

The thing is, IamWright, most liberals agree that Warren Buffet should pay more in taxes. Hell, *Warren Buffet* agrees that he should pay more in taxes.

Posted by: MosBen
=========================================
If the government ever did anything to raise his rate, his army of accountants would shift his assets around and he would probably pay even less in the end. Buffet is your stereotypical rich liberal gasbag.

Posted by: peterg73 | December 9, 2010 1:32 PM | Report abuse

The graph at the top, made from the professional left, is BS.

The WaPo's own graph yesterday discredits it, and shows the deal was good for middle and low income workers. The extreme leftists are kicking and screaming trying hold this thing hostage because they didn't get everything they wanted. Good. They did in health reform and look at what a disaster that is.

http://www.washingtonpost.com/wp-srv/special/business/tax-cut-compromise/index.html?hpid=topnews

Posted by: dnara | December 9, 2010 1:34 PM | Report abuse

It’s just been too long since we’ve had a good old-fashioned class warfare debate, hasn’t it? All wages, and wage-earners for that matter, are not created equal in today’s Democratic Party. They will decide when you’ve earned too much and they will tell you how much you owe them. American wealth, in the eyes of a liberal democrat, is first and foremost the property of the government.

Posted by: reaganslist | December 9, 2010 1:35 PM | Report abuse

I very rarely read the comments on these things but personal fowl needs to learn to spell if he's going to call other people "retarded". He should also smoke a J, take a hot bath, listen to some enya, and calm the f*** down. When you scroll down and see the words "raped dog" you know something has gone terribly wrong...

Posted by: megankeenan | December 9, 2010 1:54 PM | Report abuse

"Please, IamWright, tell us how those WalMart heirs, currently 4 of the top 10 richest Americans, "earned their money.""

Sam Walton earned it - creating a ton of value in the process - and had every right to decide how it was used.

Posted by: justin84 | December 9, 2010 2:24 PM | Report abuse

@gasmonkey "BS. Stop peddling that myth.

"Middle-class households that earned between $34,300 and $141,900 paid 50.5 percent of all federal tax revenues in 2007 (the most recent year analyzed), according to the CBO study released Thursday, and households that earned between $34,300 and $352,900 paid 66.7 percent of all federal taxes."

@dnara "This is BS.

In 2007, the top 1 percent of income earners paid 40 percent of all federal income taxes in 2007, while the bottom 50 percent paid only 3 percent. More than one-third of U.S. earners paid no federal income tax at all!"

You guys are arguing past each other. One of you is citing "all federal tax revenues" the other is citing "all federal income taxes". I expect that "all federal tax revenues" includes Social Security, Medicare, & Medicaid, which I believe have income cutoffs (i.e. income above a certain limit, which I believe is around 106K isn't subject to the taxes). It's possible both of your assertions are true.

Posted by: jnc4p | December 9, 2010 2:38 PM | Report abuse

Posted by: dnara: "Where did I ever say high income earners should pay less of a rate than lower income earners?"

By defending the current system, and the compromise, which provides exactly that.

Posted by: dnara: "You're all gassed up b/c you can't read. Calm down. I simply provided evidence that, as expected, high income earners pay the majority of taxes - and conversely, that low income earners pay very little of the total taxes."

And again, you're conveniently ignoring the fact that those figures come from earned income, not from unearned income, and not from wealth.

Posted by: dnara: "In fact, this year is was widely report (GFGI) that almost 50% of taxpayers PAID NO FEDERAL INCOME TAX AT ALL. That is just wrong. Everybody should pay SOMETHING."

And yet you seem to be perfectly okay with the leisure class paying less (or even nothing). Since all we tax is income, not wealth, and since we tax money earned by the sweat of the brow at considerably higher rates than we do money earned because you have enough money to invest, where is your stance? You're defending taxing labor at a higher rate than taxing leisure.

Posted by: dnara: "The famous Buffet claim that his secretary pays a higher rate is because of loop holes and deductions."

No, genius, it isn't. It's because Buffett has much greater unearned income than earned income. Do you even understand capital gains rates, and dividend rates?

Posted by: dnara: "I'm fine with a progressively higher tax for higher earners, but if you agree to that, you have to comprehend that you're unfairly taxing one class of people more than another - all becuase you want to arbitrarily decide when they've made enough (Obama claims $250K per family)."

I don't have to agree to that, and I don't. The wealthy benefit disproportionately from things like national defense. Why shouldn't they pay disproportionately for it? Who do you think benefits more from national defense, Bill Gates and Warren Buffett, or the minimum-wage slave? It should be more than obvious that the wealthy have more to lose if the country is unstable, therefore they benefit more from stability and defense. Why shouldn't they pay for it?

Posted by: gasmonkey | December 9, 2010 2:51 PM | Report abuse

"I've got a request for you. You're a far better numbers cruncher than I will ever be. Can you calculate the cost of the 50-75 basis point rise in the the 10 year into dollars?"

54465446,

Bloomberg currently has the 2.625 11/15/20 10 year at 3.22% and priced at 95-00.

I built a cash flow discount model in excel (simplified so that it assumes 10 equal annual payments of 2.625 with a par value of 100).

At a discount rate of 3.22%, I get a price (sum of discounted cash flows) of 94.98, so pretty close to market despite the simplification. The amount of error is likely to be several cents.

At a discount rate of 3.72%, I get a price of 90.99, a 4.2% decline.

At a discount rate of 3.97%, I get a price of 89.07, a decline of 6.2% from current value.

http://www.bloomberg.com/markets/

Posted by: justin84 | December 9, 2010 2:58 PM | Report abuse

"Posted by: dnara: "The famous Buffet claim that his secretary pays a higher rate is because of loop holes and deductions."

No, genius, it isn't. It's because Buffett has much greater unearned income than earned income. Do you even understand capital gains rates, and dividend rates?"

This neglects the existence of the corporate income tax, which pushes capital income taxes well above what the typical wage earner faces - unless of course the corporations one invests in pay little to no corporate income tax due to loopholes and deductions.

Posted by: justin84 | December 9, 2010 3:14 PM | Report abuse

gasmonkey: your liberal jealously stinks. You seems to think every wealthy person sits at home and clicks a few buttons on their stocktrader account, and BOOM! $1,000,000 per year. such a simple funny mind. If you operate under the liberal assumption that $250K per year is "rich" then there are a lot of people working 60 hour work weeks making that much. They are smart and successful; they are the fruits of all of our public education and infrastructure. Yet, you want to paint them as the enemy? That they don't earn their wealth? Everyone that makes money earns it. The only ones that get money but don't earn it are the welfare queens that are enabled by the democratic party. You want to tax unearned income - go ahead, tax welfare payments. Your arguments are juvenile and you sound like a jealous 18 year old.

Posted by: dnara | December 9, 2010 3:21 PM | Report abuse

4.8M rich getting $133B - that picture is missing that it is THEIR OWN money whereas 156M non-rich getting $214B is 'transfer of money' in lot of cases.

These graphs do not show that - who earned the money.

Posted by: umesh409 | December 9, 2010 3:26 PM | Report abuse

justin:

Thank you. That's pretty inauspicious to think the govenrnment has already added millions of dollars to the deficit in T auctions without adding a single job or one-onethousandth to the GDP, just by talking about this deal!

Posted by: 54465446 | December 9, 2010 3:26 PM | Report abuse

It's really a puzzle why we are calling this stimulus, since there is almost no stimulus in the package. Almost everything is exactly the same on January 1st as it was on December 31st. The only exception being that workers have a few more hundred dollars in reduced payroll taxes, and businesses get to move up a tax credit by a few years.

So the same policies which have existed during are current essentially jobless recovery, which has been ongoing for 9 months to a year now, will continue BUT somehow they will produce an entirely DIFFERENT employment result in the next 12-24 months.

Is it me?

(Rick Santelli compared it this morning to stepping off a curb and not getting hit by a passing bus. It's great that you didn't get run over, but nothing else has changed in your life.)

Posted by: 54465446 | December 9, 2010 3:43 PM | Report abuse

Posted by: dnara: "your liberal jealously stinks. You seems to think every wealthy person sits at home and clicks a few buttons on their stocktrader account, and BOOM! $1,000,000 per year."

Nope; I don't think that at all. Where did you get that absurd idea?

Posted by: dnara: such a simple funny mind. If you operate under the liberal assumption that $250K per year is "rich" then there are a lot of people working 60 hour work weeks making that much."

Hey, you can try to distort my argument all you want to, but you're making up BS that I never said or even implied.

Posted by: dnara: "They are smart and successful; they are the fruits of all of our public education and infrastructure. Yet, you want to paint them as the enemy?"

No, I want them to pay their fair share. That isn't saying they are the enemy.

Posted by: dnara: "That they don't earn their wealth?"

Hey pinhead, get this through your thick skull. Wealthy people do not earn. Earnings are what you are paid for work you do. Investments yield income; they do not yield earnings. That is why it's called "unearned income." Is that simple concept beyond your mental grasp?

Posted by: dnara: "Everyone that makes money earns it."

No, they don't. You probably have never known anybody who was wealthy, or you'd not even make such an absurd statement. Do you really think the IRS classifies income into "earned" and "unearned" because it's all earned?

Posted by: dnara: "The only ones that get money but don't earn it are the welfare queens that are enabled by the democratic party."

That's very odd. My bank account is chock full of dollars that I never earned. They are income; they come to me from dividends, but not by my earning them.

Posted by: dnara: "You want to tax unearned income - go ahead, tax welfare payments. Your arguments are juvenile and you sound like a jealous 18 year old."

And you sound like someone who doesn't quite understand taxation or economics.

Posted by: gasmonkey | December 9, 2010 3:50 PM | Report abuse

It's not just liberals who are against tax cuts for the rich.

Most AMERICANS are against tax cuts for the rich.

C'mon, Congress. Surprise us and do the right thing on this one.

Posted by: postfan1 | December 9, 2010 4:47 PM | Report abuse

Jeez, Ezra, why is it necessary to be so obtuse about this? Not only are you repeating the totally misleading snowman graph, but now you've got this other graph that is only accurate if you consider each side's "priorities."

Last time I checked, there were very few Republicans (I'm tempted to say "none" but I don't know if that's true) who objected to preserving current tax law for the middle class. The only reason that the GOP doesn't consider it to be a "priority" is that the need to retain current law for the middle class is completely undisputed. Every GOP proposal has preserved all of the Bush tax cuts for everybody.

So, when the GOP proposal is a superset of the Democratic proposal, how is it that the number of people benefiting from the GOP proposal is smaller than that of the Democrats?

As for the snowman, it only makes sense in the context of assuming that the Bush tax cuts have already expired, which they haven't. If you were to do the the snowman as a delta from current law, the amount of tax increase (not savings) on those with incomes in those $500K and $1M+ brackets is huge.

Look, there are plenty of good arguments for increasing taxes on the wealthy (just as there are good arguments for leaving them as they are). Do you really need to stoop to this level of obfuscation?

Posted by: theradicalmoderate | December 9, 2010 5:31 PM | Report abuse

gasmonkey: you're worse than Barney's dining room table.

Posted by: dnara | December 9, 2010 8:01 PM | Report abuse

gas: actually, you sound like you know just enough about taxation and economics to sound dumb. After all your ranting about the capital gains rate and the IRS's definition of unearned income, your entire economic analysis comes down to: you want people to pay their "fair share." Wonderful, solid economic estimation. How much is their fair share do you say? The pre-Bush level of 30%? 50%? Do tell. And last year, I day traded over $3M worth of stock. I made some; I lost some. I collected dividends occasionally on the REITs. But when it was all said and done, after I researched the market daily, used my education in economics to find value plays or swing trades, spent more time researching emerging trends or plays, and ultimately sweated out every trade as i put tens of thousands of my own money on the line - never once did I feel that it was "unearned." But thanks for telling me it was. I'm not rich, by any subjective and menial liberal standard. Yet, you don't think I'm paying your definition of a "fair share." You know what I didn't think was fair? The government taking even 30% of my trades (I kept all positions under 12 months; over it would have been the Bush-reduced 15%) when they damned well didn't do anything. And don't even mention the SEC - it is merely a rigged institution, run by former or prospective market makers and institutional players. The rules in place work against the individual trader, and unethical market activity was at an all time high during the recession. The government doesn't do a thing while I do all the work, and yet they still want their pound of flesh. And where are they when I fail, when insider trading or large market players push me out of a position just to make money off me? No where. They offer no remedy if I fail on my own, or even when it is the result of unethical tactics on the part of institutions. In fact, when they failed, they got billions.

So no thanks, you can keep your subjective and jaded definition of unearned income, or what you believe to be someone's fair share. At the end of the day, you still want to use the tyranny and power of the law to take money from one person that earned it and give it to another. You think everyone that makes income off of capital gains hasn't earned it. I say screw you; I earned every percent that I made in the market, and the government got paid for my efforts. But when I failed, they not only were nowhere to be seen, but bailed out some of the folks that perpetuated the market crash.

Raising the capital gains rate back to 2000 levels won't save this economy. And the term "unearned" income is a political tool, invented by the liberal left. You feel for it, hook line and sinker because you have a couple of positions that collect dividends. You sound naive and guilty enough to be a liberal. But you likely don't choose to lead by example. No one's stopping you from cutting that extra 15% to the IRS big fella. But you won't.

Posted by: dnara | December 9, 2010 8:30 PM | Report abuse

So huge tax cuts to the rich and greatly weakens Social Security in exchange for a small one year tax reduction.

New word - Fumblama: To give away all your bargaining chips as an initial move during negotiations.

Posted by: elemming | December 10, 2010 3:14 AM | Report abuse

what's 'galling' more than anything is the petulantly insistance of these Exceptionalist Republicans who demand sacrifice from everyone else - why the refusal to understand that the country which provides the opportunity to earn the money they deify was gained under a shared protection they demand cater to their narcissistic greed? These are the same people who smirk as they chortle that "you need money to make money...har har".
If we're all in this together then we need to recognize the reality of proportionalism.

Posted by: dcdroid | December 10, 2010 10:41 AM | Report abuse

Two silences of interest since March: The shadowy 99ers receiving absolutely no MSM coverage, or very little anyway, but increasing in numbers every day. But it's NOW that we get to be part of the conversation? The sound of crickets chirping for nine months with regard to us and at the eleventh hour we're finding out that O's "deal" doesn't include 99ers? We read that some legislators don't even KNOW what a 99er is, much less identify in any way what unemployment, big pic/small pic, is about in America.

Secondly, Warren Buffett publicly discloses that he's dreadfully under-taxed and bold-facedly extols on how the wealthiest Americans hide their dough off-shore or anywhere else the taxman can't find it as we enter the last leg of the Congressional session. But up to that moment (and since), not one public word from a wealthy citizen crying foul, just their legislators. Not one billionaire or millionaire on the air complaining about the unemployed, W's tax cuts, and the current tussle in Washington. Not one. If this "deal" is so egregious, so anti-GOP and its DNA why aren't these folks whooping and hollering, instead of their lackeys they elected? More crickets.

Perhaps it's out of fear. 99ers fear more instability, displacement, and unfair representation by the gov't. Rich folks fear being discovered as manipulators and Midas types or maybe being visited upon by those who worked their whole lives to support and empower them.

Now that 99ers have gotten some coverage and ought to be included in the "deal," there's only one more silence that needs to end. More Buffetts, please.

Posted by: kickoradell | December 10, 2010 12:12 PM | Report abuse

DAinLA, Obama gave the Dems in Congress this issue on a silver platter MONTHS ago--before the election. It was Pelosi and Reid who decided to put it aside until the last minute.

What is dispicable, is that Obama had to do their JOB for them and when he does it, they got a problem. They should have got this done before the election.

Posted by: Rudyabdul | December 10, 2010 5:26 PM | Report abuse

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