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Posted at 4:02 PM ET, 11/18/2010

GOP response: Vote to continue just middle class tax cuts = tax hike

By Greg Sargent

Michael Steel, a spokesman for John Boehner, emails a response to the news that House Dems are planning to hold a vote just on extending the middle class tax cuts:

"The last thing our economy needs right now is a massive tax hike on families and small businesses -- and that's what this plan would mean."

This is not the first time a vote just on extending the middle class tax cuts has been cast as a "tax hike." Orrin Hatch made the same argument the other day. The idea appears to be that any move towards separating the middle class and high-end cuts is automatically a tax hike because it increases the possibility that the high end ones won't be extended permanently.

Meanwhile, Dem Rep. Mary Jo Kilroy of Ohio is the first House Dem out with a statement applauding the move:

"This is a great first step towards putting our economic house back in order. Our colleagues in the Senate and the incoming Republican house leadership need to do the right thing right now. If they don't, and we continue to subsidize millionaires and billionaires with a tax cut they don't need, it will prove to everyone that they are not serious about our nation's long term financial health."

Looks like we've now got ourselves a debate underway.

UPDATE, 4:14 p.m.: Okay, in fairness, the GOP argument is that if voting on just the middle class tax cuts is the entire plan, then this amounts to a tax hike because the high-end cuts will all go up on January 1st. Of course, we don't know whether a vote just on the middle class cuts is the entire plan. There could also be a vote on the high end ones. Or the middle class vote could lose and a compromise might be reached under which they're all extended temporarily.

By Greg Sargent  | November 18, 2010; 4:02 PM ET
Categories:  House Dems, House GOPers, taxes  
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Next: Happy Hour Roundup

Comments

Michael Steel, hmm, bad timing. Maybe he should change his name to Stahl, or Stihl.

Posted by: shrink2 | November 18, 2010 4:14 PM | Report abuse

Please dont be so obtuse. If no action is taken, the Bush tax cuts expire. Only opting to continue cuts for the middle class amounts to a tax hike on those not extended through the willful inaction of congress.

Progressive taxation is evil. 47% of Americans pay no federal tax, yet you find Democrats out there passing more and more massive, unsustainable federal programs like Obamacare to give those very people who pay no tax more benefits. Those who pay nothing and receive show no moral character in insisting upon their own independence from the Nanny state. They yammer for more and more without end because it costs them nothing, and the old values of the WWII generation in which receiving charity was shameful died with that generation.

Until ALL Americans pay the same percentage of tax, there will be no incentive for this clammoring by amoral freeloaders for more and more free stuff stolen from other hard working Americans in the form of progressive taxation.

The proper course would be for this congress to extend the tax cuts for those paying taxes, and impose new taxes on those who pay nothing to bring them up to the percentage of those who do. Democrats will never do this because they do not care about the fiscal health of this nation, they only want to get re-elected by any means possible, no matter what the consequence.

Posted by: Wiggan | November 18, 2010 4:24 PM | Report abuse

Why aren't the Democrats worried that all those jobs that the tax cuts for the wealthy created will go away if said tax cuts go away?

Because they didn't create any jobs!

We are not talking about a policy with a proven record of job creation, we are talking about a policy that was an epic fail from inception.

The tax cuts had a decade to produce jobs. They didn't, all they created were record deficits. Why does the GOP keep expecting a different outcome from the same actions? Are they insane?

Posted by: HansSolo | November 18, 2010 4:25 PM | Report abuse

A debate? Hell with that, it's time to pick a side.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"At this moment in American history, after large swathes of the middle class have been wiped out, the last thing we need is another elite-driven assault on the living standards of working people.

Even though it was Wall Street that fostered the conditions that produced our current economic state, we're told from pundits across the political spectrum that we mustn't tax the rich because it will stymie job-creating investments. But I'm sure Lloyd Blankfein, Hank Paulson, Angelo Mozilo, and their ilk can afford to kick in a little more in taxes to save the country they claim (when under oath at least) to love so much.

In the 2010 midterm elections, the super-rich and their business associations threw around hundreds of millions of dollars in campaign cash like it was so much chump change. And they're gearing up to set new spending records in 2012. They appear to be very civic-minded plutocrats. Yet where is their "pain" and "sacrifice" when it comes to reducing the federal deficit? What "tough decisions" that affect their bottom lines are they being asked to make? And what happened to the quaint notion that those who have so greatly benefited from the opportunities American society has bestowed upon them having a special obligation to pay a little more when their country is in crisis? We're all in this together, right?

Politicians, pundits, commentators, and citizens must choose a side now. You're either on the oligarchy's side or on the people's side. It's D-Day in the class war."

http://www.huffingtonpost.com/joseph-a-palermo/d-day-in-the-class-war_b_785192.html

Posted by: lmsinca | November 18, 2010 4:26 PM | Report abuse

Calling tax cuts for the middle class "tax hikes", brilliant strategy. How stupid does the GOP think Americans are?

Posted by: swsnt | November 18, 2010 4:26 PM | Report abuse

As of today, 75% of Americans DON'T want the tax cuts for the highest earners extended. The GOP is picking the wrong side on this one. On the same day they refuse to extend unemployment benefits, they declare that millionaires must get their tax cut. Beautiful

Posted by: maurban | November 18, 2010 4:27 PM | Report abuse

If Dems force a vote on just the middle class tax cuts it will be defeated. Republicans will say they defeated a tax hike. In the next session of congress they will extend both the high and middle class tax cuts. Dems will come out the losers.

Posted by: johnyt1977 | November 18, 2010 4:27 PM | Report abuse

Will somebody please smack the democrats? Where is the smack-down of this silliness? Are they capable of a smack-down?

Posted by: mkris1 | November 18, 2010 4:31 PM | Report abuse

"Progressive taxation is evil."

No it isn't. It is as American as apple pie.

"47% of Americans pay no federal tax"

No federal income tax, sure. But they pay a much higher percentage of their income in payroll tax, state income tax, sales tax, etc than those poor people unlucky enough to be rich.

"old values of the WWII generation in which receiving charity was shameful died with that generation."

Look in the mirror. The top marginal tax rate during and in the two decades after WWII was above 80%. Which, according to you, makes the Greatest Generation evil. Nice.

"and impose new taxes on those who pay nothing to bring them up to the percentage of those who do"

Yeah, because poor people starving is funny!

Posted by: HansSolo | November 18, 2010 4:38 PM | Report abuse

@Greg

There's no "in fairness" here.

The tax cuts are all set to expire. The Democrats cannot literally vote for a "tax hike" in any way, unless they present a new bill that raises taxes in some way.

Don't buy into this spin-framing. It's total bullsh*t and you shouldn't allow white-lies like this dupe you into thinking - much less publishing - otherwise.

It's this kind of default Republican framing that the rest of the media happily goes along with, totally un-f*cking-able to say to themselves, "Hey, that's a giant heaping load of bullsh*t political spin. Maybe, just maybe, I shouldn't carry their water for them like a circus monkey?"

Don't be that guy.

It's not a tax hike. The Bush cuts will expire - just like Bush and the GOP scheduled them too. I wouldn't even call it "The Bush/GOP Tax Hike", even though that would be MORE accurate than what the GOP is saying now. It's all just spin.

It's a vote to extend tax cuts for the middle class. That's it.

Posted by: TheBBQChickenMadness | November 18, 2010 4:43 PM | Report abuse

Wiggan:
"Progressive taxation is evil."

Um, no. Progressive taxation is sensible. Adam Smith, who literally wrote the book on capitalism, supported progressive taxation.

"Until ALL Americans pay the same percentage of tax"

Here's a thought experiment for you. Let's set your magic flat tax rate to 20%. Now let's take two people, Alice, making $25,000 a year and CEO Bob making $2 million. After taxes Alice takes home $20,000 while Bob takes home $1.6 million.

Who's going to feel the pinch more? Flat taxes aren't fair. They're regressive.

"The proper course would be for this congress to extend the tax cuts for those paying taxes, and impose new taxes on those who pay nothing to bring them up to the percentage of those who do."

What a great idea. The solution is to force the people who already can't afford to pay taxes... to pay taxes. You know, because they don't pay property taxes or sales taxes.

"Democrats will never do this because they do not care about the fiscal health of this nation, they only want to get re-elected by any means possible, no matter what the consequence."

Ahaha How cute. You think the GOP is any different.

Posted by: presto668 | November 18, 2010 4:43 PM | Report abuse

Why do Democrats always say higher taxes is the "first step towards putting our economic house back in order"?

Posted by: kitchendragon50 | November 18, 2010 4:51 PM | Report abuse

YES, we want to raise taxes on the rich.

Obama campaigned on it and now he's the President.

Get over it.

Posted by: Ethan2010 | November 18, 2010 4:58 PM | Report abuse

Why do Democrats always say higher taxes is the "first step towards putting our economic house back in order"?

****

Because Republicans do everything in their power to lower taxes on billionaires and it leads to huge debt. See Reagan and W. Bush for examples.

Why do Republicans always say we can cut the deficit by giving billionaires tax cuts? Tax cuts don't pay for themselves, that is a wingnut fantasy. Even Alan Greenspan admits as much.

Posted by: HansSolo | November 18, 2010 5:02 PM | Report abuse

Mr Sargent's inclusion of a quote from Mary Jo Killjobs is just hilarious. She got trounced in her re election bid.

so she's in a political consequence free mode right now. And she's never met a tax incease she didn't like.

Perhaps that explains the 55 to 41 trashing she just took. the sooner she's put out to pasture the safer our wallets will be.

I love the "reasoning" being offered here in defense of the steeply progressive nature of America's income tax code.

The question I've asked is "what is the moral support for progressive taxes?"

Basically what we're told here is that the tax rates MUST be progressive because the poor can't afford taxes so we have to make up the difference elsewhere.

Really? is that the best you've got? The point made wiggan remains unanswered: why would the "poor" ever vote for anyone who would raise their taxes? Right now they get something for nothing because the system punishes successful people and rewards failures.

It is a variation on Hanssolo's "wille sutton" defense. America must tax the rich because, well, that's where the money is.

And presto's nonsense isn't much better. Basically we're told that "fairness" dictates that we take more from one than from another because the people with less income will "feel the pinch" more. How about this:

(1) What do the feelings of anybody have to do with the morality of confiscating the private property Americans? It is morally bankrupt to say that the CEO must give up more of his hard earned money because others have earned less.

(2) If others don't want to "feel the pinch" why don't they work as hard as the CEO did to earn more? In essence Presto enables mediocrity by assuring that the only people feeling the pinch are the folks Presto doesn't find to be a fitting object for concern.

And wiggan also raises an important moral question: what is the morality of demanding more and more from others and using the coercive power of the government to obtain it.

In the current economic down turn many Americans took pay cuts or wound up taking jobs paying far less than the job they lost due to layoff.

I haven't heard of a reduction in transfer payments anywhere in America. Financial shortfalls in Medicaid, for example, aren't confronted via a reduction in benefits. Typically the states simply reduce the amount paid to providers. Did TANF funding suffer? How about section 8? How about all the other schemes that confiscate money from one group to another?

What is the morality of demanding more from "the rich" while demanding nothing from the folks who ultimately spend the money taken from the rich?

It appears that, to Hans and Presto, progressive taxes are moral because Adam Smith thought they were a good idea. Adam smith never imagined food stamps, I'm sure.

Posted by: skipsailing28 | November 18, 2010 5:08 PM | Report abuse

Democrats just voted on Obama's health care bill which caused health care premiums to take $500 Billion out of the economy

This is the SECOND drag on the economy just this year - this time it is a $700 Billion DOLLAR tax increase


That means the democrats want to take $1.2 TRILLION DOLLARS out of the economy in the middle of an Economic Crisis.


Clearly Obama and the democrats have no idea what they are doing - or how they are supposed to do anything.


Unbelievable.

Posted by: RedTeaRevolution | November 18, 2010 5:10 PM | Report abuse

in response to:
============
Why do Democrats always say higher taxes is the "first step towards putting our economic house back in order"?
-----------------

There is an easy answer: Democrats say this because they simply cannot imagine ever spending less on anything except defense. And with America's warriors on the field of battle hammering away at the pentagon is an unattractive visual for them.

Therefore they must raise taxes because they have no intention of reducing spending. I've been asked repeatedly for details about spending cuts. I wonder what the Democrats/liberals would cut (if anything)
So there you have it. In the minds of the left, spending is a foregone conclusion. They MUST always spend at least as much as they spent yesterday, if not more. since they cannot spend less their only choice for fundage is to confiscate more money from the citizens. Or debase the currency which amounts to the same thing.

Posted by: skipsailing28 | November 18, 2010 5:17 PM | Report abuse

To those opposed to progressive taxation maybe you should move to a country without it.

Of course, ALL free market economies have progressive taxation, so you will most likely be moving to a theocracy or some third world pit. Have fun!

Posted by: HansSolo | November 18, 2010 5:23 PM | Report abuse

If it looks like a tax hike and sounds like a tax hike, it is a tax hike


Posted by: RedTeaRevolution | November 18, 2010 5:24 PM | Report abuse

What is this

Are you simply trying to convince yourself that you are not lying?

But you know you are lying - so you are coming up with some set of ideas which you would say if you were trying to convince someone you weren't lying.


But everyone knows you are lying

Posted by: RedTeaRevolution | November 18, 2010 5:28 PM | Report abuse

No, sorry, the Republican line is hogwash.

The baseline is the "do nothing option." the baseline allows taxes to raise, per the Republican plan years ago when these tax cuts were passed.

Doing "something" will cut taxes for everyone, including the rich. The cuts for the rich just will not be as huge as under the Bush plan.

And these Bush tax cuts FAILED. These tax cuts were a part of the failed policies that produced the worst economic downturn since the Great Depression. Very nearly, a Great Depression II.

Posted by: ANDYO1 | November 18, 2010 5:30 PM | Report abuse

OT:

Not much talk on GM's incredible IPO here... But here is some additional economic news that might interest ya'll:

"""Stocks got a boost from a surprisingly strong reading on manufacturing from the Federal Reserve Bank of Philadelphia. The report said factory orders in the mid-Atlantic region expanded at the fastest rate since December.

All ten industry groups within the S&P index rose, with industrial and materials stocks posting the largest gains."""

http://articles.moneycentral.msn.com/news/article.aspx?feed=AP&date=20101118&id=12424958

The economy IS coming back. It's indisputable now. I'll try to post a good IPO article in the Happy Hour round-up.

Posted by: Ethan2010 | November 18, 2010 5:30 PM | Report abuse

The Plutocrats bankrupted the country and stole our money to bail themselves out. Now the SuperRich are outraged that their income tax rates may return to the historically low levels they were at before Bush took office. Does their greed have no limits? Have they, at long last, lost all sense of modesty? Great American Patriots, each and every one of the selfish b*stards.

Go get 'em, Democrats! This is a battle to win!

Posted by: wbgonne | November 18, 2010 5:33 PM | Report abuse

"Over the last 40 years, the U.S. federal tax system has undergone three striking changes, each of which seems to move the federal tax system in the direction of less progressivity. First, there has been a dramatic decline in top marginal individual income tax rates. In the early 1960s, the statutory individual income tax rate applied to the marginal dollar of the highest incomes was 91 percent. This marginal tax rate on the highest incomes declined to 28 percent by 1988, increased significantly to 39.6 percent in 1993, and fell to 35 percent as of 2003. Second, corporate income taxes as a fraction of gross domestic product have fallen by half, from around 3.5– 4.0 percent of GDP in the early 1960s to less than 2 percent of GDP in the early 2000s (for example, Auerbach, 2006). Meanwhile, corporate profits as a share of GDP have not declined over the period, suggesting that capital owners—who are disproportionately of above-average incomes—earn relatively more net of taxes today than in the 1960s. Third, there has been a substantial increase in payroll tax rates financing Social Security retirement benefits and Medicare. The combined employee–employer payroll tax rate on labor income has increased from 6 percent in the early 1960s to over 15 percent in the 1990s and 2000s. Moreover, the Social Security payroll tax applies only up to a cap—equal to $90,000 of annual earnings in 2005—and is therefore a relatively smaller tax burden as incomes rise above the cap.”

http://elsa.berkeley.edu/~saez/piketty-saezJEP07taxprog.pdf

Posted by: HansSolo | November 18, 2010 5:36 PM | Report abuse

You know when they put this sunset clause in, there was a calculation that Bush would hold onto the White House for 8 years and this issue would come up around this year's midterms.


I never imagined that the democrats would bungle and mismanage their message to such an extent.

To this day, the democrats STILL are damaging themselves with this issue.


The democrats just don't get it.

GREG AND THE DEMOCRATS: YOU SHOT YOURSELF IN THE FOOT WITH THIS ISSUE BEFORE THE ELECTION, WHY IN THE WORLD WOULD YOU SHOT THE OTHER FOOT NOW ???


The Republicans are laughing

Posted by: RedTeaRevolution | November 18, 2010 5:42 PM | Report abuse

I would make a comment but this is all too boring.

ZZZZZZZZZZZZZZZZZZZZZZZZZZzzzzzzzzzzzzzzz

Posted by: battleground51 | November 18, 2010 5:48 PM | Report abuse

This issue is ridiculous


Look at this - it might get your minds off of the election you apparently all find so painful


http://www.nydailynews.com/gossip/galleries/the_hottest_wives_in_sports/the_hottest_wives_in_sports.html

Posted by: RedTeaRevolution | November 18, 2010 5:49 PM | Report abuse

Ethan, a long, long time ago (more than a year at least!) most agreed the Ds were betting their careers on printing enough money to make all the social classes happy so that retail sales would come back before 2012.

Maybe they will, maybe we have one more credit bubble to go, but if we don't, it won't matter to politics. Neither party is capable of figuring out what it would take to generate and sustain real economic growth.


Posted by: shrink2 | November 18, 2010 5:53 PM | Report abuse

All, Happy Hour Roundup posted:

http://voices.washingtonpost.com/plum-line/2010/11/happy_hour_roundup_132.html

Posted by: Greg Sargent | November 18, 2010 6:08 PM | Report abuse

The Republicans set this tax hike up with the end of 2010 death of the cuts. The Democrats are giving back tax cuts to most of us, and the one percent that will not get a tax cut won't feel it anyway. Get a life, GOP.

Posted by: ronjeske | November 18, 2010 6:20 PM | Report abuse

@ Hansolo: get your facts straight.

The "payroll tax" goes to Social Security and Medicare (until LBJ raided it to pay for Great Society--sound familiar?). Low income earners get much, much more out of these programs than they put in. It is only regressive in terms of payout.

I am glad you want to bring back the 1950s, which sure were a great time for all Americans, but consider that the high marginal rates you are talking about back then kicked in at about $7 million of income a year in today's dollars, not $250,000. And tax evasion at all levels was rampant back then.

You talk a great game about raising tax rates on people with a lot of earned income--who may or may not be rich but are trying to be, no thanks to your ilk--yet you are strangely silent on the 15% tax rate that actual rich people, who live off of capital gains and qualified dividend income, pay in tax.

Is that because you too are bankrolled by George Soros?

Posted by: HT12 | November 18, 2010 6:46 PM | Report abuse

OH yes another tax cut for the 50 Percent of families that dont pay a dime in taxes

Posted by: mont9744 | November 18, 2010 7:54 PM | Report abuse

Wasn't it Boner and his fellow republicans who voted for the bill that has the tax cuts expiring in 2010, and Bush signed the bill into law.

By voting for this law back then it is they, the republicans who "voted for" a tax increase for everyone.

Only a moron, or Mitch McConnel would now try and blame the democrats for their mess.

They voted for crazy bill - time for them to "nut-up", or shut up...

Posted by: gooch733 | November 18, 2010 8:08 PM | Report abuse

" Michael Steel, a spokesman for John Boehner, emails a response to the news that House Dems are planning to hold a vote just on extending the middle class tax cuts:

"The last thing our economy needs right now is a massive tax hike on families and small businesses -- and that's what this plan would mean.""

Nice conflation. Vote to hold the taxes of families and small business, (The below $250,000 per year incomes) and raise the taxes on the top brackets, and that equates to a massive tax hike on the middle class.

Let's just go do something else. Like pass a military budget with DADT, pass START,and, if there is enough time before Christmas, pass a nice thank you resolution for Store Santas.

Still, if the Dems bring a vote on extending the tax breaks on incomes or parts of incomes below $250,000, with no other provisions, the R's have to do something, even if it is just stay home and hope a quorum doesn't materialize.

They WON'T vote FOR the bill, and everything else puts them voting for, in THEIR definition, a tax hike on the middle class.

Heads the Dems win and every other way the coin can drop, including rolling down a storm drain the R's lose.

Have the R's proposed a bill that does what THEY want, yet?

Posted by: ceflynline | November 18, 2010 8:46 PM | Report abuse

Democrats New Math: Keeping tax cuts on a family of four with an income of ,say, $300,000 a year is "subsidizing millionaires and billionaires" ???

Exactly how that works neither Nancy,Harry,or Barry can tell us.

Posted by: beecheery | November 18, 2010 9:13 PM | Report abuse

Aren't journalists supposed to cut through flagrant partisan spin and political propaganda?

Bush and the Republicans enacted these temporary tax cuts to expire at the end of 2010. Temporary tax cuts with an expiration date was their deliberate choice, their plan.

It's great news that President Obama and Democratic leaders are going to vote on new tax cuts for all Americans' first $250K of income.

Hopefully the predatory speculators, uber-rich parasites and Corporate Welfare Queens will now begin to pay their fair share.

Posted by: frankcam | November 18, 2010 11:21 PM | Report abuse

Any small business that has to meet a payroll and earns more than $250K/annum will not hire because of Demonrat stupidity in pushing their class warfare agenda forward. Obama is a stupid fool and the Pelosi/Reid morons are playing Russian roulette with six loaded chambers----I can't wait until 2012 when 22 Demonrat senators come up for reelection and the redistricting in 30+ state legislatures controlled by the Republicans gives the GOP 15-20 seats. Remember that California & NY state are LOSING population because of the zany New Age economics of Paul Krugboy and now Gov. Moonbeam. Look for more demographic hemorrhaging out of the Left Coasts down to Texas and FL.

Businesses are being choked by Demonrat economic policy. The GOP should shut down these lame ducks--period.

Posted by: djman1141 | November 19, 2010 12:07 AM | Report abuse

The funny thing about the bleats from the teatardlicans on here is that NOT ONE of them is CLOSE to being affected by the change in the upper-income tax rates.

You people are freaking stupid.

Posted by: Observer691 | November 19, 2010 9:31 AM | Report abuse

Any small business that would be hurt by returning the higher bracket rates of the personal income tax to sensible levels needs a better accountant.

The moral basis of progressive taxation, and especially of the estate tax, is that many of the founding fathers meant the USA to be governed in a democratic way. They laid out in the Federalist Papers that they didn't want a hereditary aristocracy.

Posted by: ChuckKarish | November 20, 2010 11:48 AM | Report abuse

George Carlin's take on how the US works (with the strong language we expect from him):

http://www.youtube.com/watch?v=acLW1vFO-2Q

The owners won the American class war in 1983, and they've been consolidating the spoils from that victory ever since. Ordinary Americans who support their continued plundering are fools. Ordinary Americans who think they have upward mobility to join the owners are, with very few exceptions, kidding themselves.

Posted by: ChuckKarish | November 20, 2010 2:17 PM | Report abuse

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