Are Conservatives Between A Rock-and-the-Hard-Place After the Senate Passed the Middle Class Tax Cut? [162*6]

COULD SPEAKER BOEHNER'S OBSTANENCE DERAIL THE CONSERVATIVES CHANCES OF KEEPING CONTROL OF THE HOUSE?

Source

15-28-31-36-39.6 HIKE!

THOSE ARE THE THE TAX RATES under President Clinton. Why does that matter, because on 7/25/2012:the Senate voted to let the last two brackets of the Bush tax cuts expire and raise back to that level. So, this is where we stand and the dilemma facing the Conservatives:

  • The Senate voted to make permanent the 10%-15%-25%-28% portion of the Bush tax cuts. (10%-15%-25%-28%-33%-35% are the tax rates under President G. W. Bush).
  • President Obama wants the tax rates to be 10%-15%-25%-28%-36%-39.6%.
  • House Leader John Boehner vows that the House will not take up the bill because the remainder amounts to a, hehe, tax hike on small business owners, hehehe.
  • -- (He of course forgets - well actually he doesn't, he knows darn well that 99% of small business owners don't earn enough to pay those high rates, but that is neither here nor there.)

It is this obstinacy by John Boehner and the House conservatives that will leave the Conservatives between the rock and proverbial hard place. Why, you ask? Well, I will tell you. Because, the Democrats, if they can figure out how to use it properly, have a very large rock to beat the conservatives about their very hard heads and shoulders over the next three (if you are reading this in Aug 2012) months before the November elections.

The Democrats have neatly placed the ball in the conservatives lap, forcing them to call the middle class tax cut a "tax increase on small business owners"; for that is what they have to do when arguing for vetoing the Senate bill because it doesn't include the last two tax brakets for the very rich. What the Democrats should be able to drive home is that the Conservatives are willing to raise taxes on everybody if they can't get their way with the very rich, because that is what will happen come Jan 1, 2013 if nothing is done.

Isn't it deliciously ironic that conservatives would rather raise taxes between 3% and 5% on those earning less than $250K per family INCLUDING the first $250k of even the wealthiest Americans if the Democrats refuse to let the 1% of the wealthiest Americans keep their Bush tax cut? That is EXACTLY what will happen if Leader Boehner and his cohorts have their way because, if they don't pass the Senate bill, then the Bush tax cuts will expire, driving the country into a new recession. Liberals know this and Conservatives don't believe this or don't care' so it all comes down to what the independent voter wants, the choice is very clear.

How can this be stopped? In my opinion, it can't. The conservatives will not cave on this, they have boxed themselves in and they are not the type to eat crow and lose face; it seems to me they have proven themselves to be part of the throw-the-baby-out-with-the-bathwater crowd. Therefore, in my considered opinion, the Bush tax cuts will expire at the end of the year. So, where is the silver lining?

There isn't any, unless Independents wake up and smell the roses and vote the Conservatives out of office come November. That isn't going to stop the tax cuts from expiring, but it will guarantee them being reinstated early in 2013 and made retroactive. If Independents keep Conservatives in power, then we will have two more years of gridlock, regardless of who is President.

WHAT IS YOUR PREDICTION?

DO YOU THINK EACH SIDE WILL HOLD TO THEIR POSITION AND THE BUSH TAX CUTS WILL END UP EXPIRING?

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Comments 7 comments

SassySue1963 4 years ago

First I guess I should address some inconsistencies in your information. There are many different types of small businesses. While it is true that some do not earn the $250,000 in four major groups, the average income is well above that $250,000. The most notable of these being manufacturing. You know, the one that creates a whole lotta jobs. So it is a fallacy to say that 99% of small businesses do not earn that $250,000.

Really, right now, they are not between any rock and a hard place. They will wait until after the election and if Romney wins extend all the Bush tax cuts. Just an FYI, the revenue earned by this proposed tax hike will only fund the government for 8 days. So to act like it is this great thing that will bring down the deficit is also a falsehood.

The GOP does not want to raise taxes on anyone. Their plan is an across the board tax break, aside from the Bush tax cuts. Loopholes used by the wealthier Americans will be eliminated in order to keep the tax cuts as deficit neutral as possible.

A Dem Congress will never extend the tax cuts so you are dreaming there friend. They have already called for an end to ALL of them. So which side is it that doesn't care if they tax you out of existence? hmmm.


HSchneider 4 years ago from Parsippany, New Jersey

This election is key to our direction as a country especially by way of our fiscal policies. I hope Democrats keep the Republicans feet to the fire and highlight the fact that the GOP policies will wipe out the middle class. The choice of Paul Ryan as VP candidate highlights this very well. Lower taxes for the wealthy and extreme slashing of our social safety net. I hope voters will study up and stop listening to the Corporate (So Called) Independent Romney Super Pacs and study the issues and policies. Excellent Hub, My Esoteric.


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My Esoteric 4 years ago from Keystone Heights, FL Author

Thanks for your comment HR. Yes, the data shows a shrinking middle-class since 1981; the shrinking slowed down in the mid-90s but picked back up after 2001. You are quite right, Ryan is going to make a bright line for people to choose. Even though he is just the VP, he is the symbol of far right Conservatism and that is the message he will be putting forth, as will Romney, if he hopes to keep the Conservative vote.


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My Esoteric 4 years ago from Keystone Heights, FL Author

Glad to see you here as well Sassy. Before going to far with this $250,000 thing, we need to make sure we are talking about the same thing. What I am talking about is the salary and taxable distribution a small business owner takes home to feed their family and enjoy life with. That is what they will be taxed on. Small businesses are generally not C corporations, which pay a corporate tax and is not involved in the personal tax issue, but S Corps, LLCs (which is what my company is), partnerships, sole proprietorships, and some other special arrangements. Are we talking about the same thing?

I would think the Conservatives would face the same dilemma, regardless of who wins the Presidency UNLESS, the Conservatives win a supermajority in the Senate, which I believe is mathematically impossible. Even with Romney as the President-elect, don't they still have the same Hobson's choice with the Senate bill aready passed? And without a supermajority, the next year, how will they get a tax bill thourgh Congress with tax cuts for the rich?

As to the tax increase solving the problem all by itself, nobody said it would. The Democratic plan has it as 25% of the solution; the other 75% comes from spending reductions.


SassySue1963 4 years ago

You'd better take a look at that plan in detail a bit there My. The only spending cut is for defense and that only makes up about 16% of all Federal spending.

Yes, I'm talking about take home salary. Like I said, there are several categories of what are classified as small businesses. Even of the top four I considered for this, manufacturing is the one most affecting job creation however, the health industry as a whole is another one of the top four as well.

I don't believe they will My. Everything has the GOP increasing their hold on the House and taking the Senate by about four votes. Once the dust settles, I'm not going to lie to you, I think Romney will be much more effective at working with Congress than this President. I'm sure there will have to be a compromise to get it passed perhaps, but I don't believe the Congress will be as divided as it is currently. That is just my opinion though.


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My Esoteric 4 years ago from Keystone Heights, FL Author

OK, I will focus on the $250K for the moment, I need to go get the proposed numbers for the debt reduction later. I looked around for a bit for a specific source to verify my swag of 99%, but was spending too much time doing so. Therefore I will approach it this way, for it works just as well.

I got the "Summary of 2009 Federal Individual Income Tax Data" from The Tax Foundation and did a few calculations. The top 1% of all filed returns had an average AGI (taxable income before deductions) of $960K. The same figure for the top 5% is $360K. HOWEVER, that figure for top 4%, leaving out the top 1%, in other words, 1 - 5%, is only $210K!

If Conservatives are right, then these numbers, except for the top 1%, are even lower today. So, right off the bat, I am close to my 99% mark without going any further. Most likely we will get to the $250K mark by considering only those people in the top 1% to top 4% of tax returns.

And I haven't even considered the facts that we are looking at ALL tax returns, both joint and single, from all taxpayers, not just small business owners. I hope, Sassy, that you can see now, without further analysis, that it is virtually mathematically impossible for more than 1% of small business owners, regardless of how you define them, to have AGIs in excess of $250K.


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My Esoteric 4 years ago from Keystone Heights, FL Author

It is amazing how many articles there are out there that are either slamming Obama's balanced deficit reduction plan (most of them) or, for the ones who do write either neutrally or in praise, only talked about the tax increasing aspect. Finally, I ran across a Huffington Post article that had what I was looking for.

The Obama/Democratic plan, as of Sep 2011, anyway, included $3 trillion in deficit reductions over 10 years. $1.5 trillion would come from letting the Bush tax cuts for the top two tax brackets expire plus closing a lot of loopholes and getting rid of tax subsidies, $800 billion and $700 billion, respectively. Another $1 trillion comes from war savings, "the same savings Congressman Ryan includes in his budget btw". A final $580 billion comes from cuts and reforms in mandatory programs including $212 billion from Medicare and Medicaid. It also includes a Kaynesian $470 billion jobs creation package, which Conservatives panned.

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