The tax deal

[SanJoaquinSooner]

1. Extend the Bush-era income tax rates for two years for all taxpayers. Top rate = 35%.

2. Extend for two years the capital gains tax rate. Top rate is at a historic low of 15%.

3. Rates on dividends remain at 15% for two years.

4. Two percentage point cut for employee portion of payroll tax contribution - from 6.2% to 4.2% (up to $106,800 of wages).

5. Two year "patch" to keep Alternative Minimum Tax at current levels.

6. Will let expire sales tax deduction for itemizers, real estate deductions for those who don't itemize, teacher expense deductions.

7. Extends unemployment benefits at current levels for 13 more months.

8. Extends $1000 child credit, expands Earned Income Tax Credit for larger families and married couples, and extends higher ed tax credit.

[SanJoaquinSooner]

4. Two percentage point cut for employee portion of payroll tax contribution - from 6.2% to 4.2% (up to $106,800 of wages)

An argument is that paycheck increases spread over a year's worth of paychecks are more likely to be spent than a lump sum (saved or used to pay down debt instead) so this will stimulate the economy.

It is my understanding that the fed govt would borrow the money to replace that money that would have gone into the SS trust fund.



1. Extend the Bush-era income tax rates for two years for all taxpayers. Top rate = 35%.

The argument is that increasing top marginal rate will inhibit job creation.

Tons of money on the sidelines waiting to expand business, but would-be users of the money are hesitant due to lack of customers. Don't want to throw a business expansion party if no one shows up.

Gotta focus on exports. Keep the dollar cheap and fight for open markets. The customers are off-shore.

[Veritas]

The argument is that increasing top marginal rate will inhibit job creation.
From first-hand experience this is 100% true.

[OULenexaman]

when you can't sell it to even your fellow dems....call slick Willie for help!!

[pphilfran]

Over the last two years the consumer has paid down debt instead of adding additional debt...a total of about 2 trillion dollars in less spending...

The rate of paydown is slowing....

If the fed is not careful they will stimulate the economy into heavy inflation....driving the debt to unforeseen levels due to higher cost of fed borrowing...

Or...fuel prices will climb due an improving world economy and we face the dreaded double dip....

I think will be be in deep chit in a year or two...

[Penguin]

If the Bush tax breaks are so wonderful and so instrumental for the economy, then why didn't the original tax cuts help the country avoid this terrible recession in the first place?

[pphilfran]

If the Bush tax breaks are so wonderful and so instrumental for the economy, then why didn't the original tax cuts help the country avoid this terrible recession in the first place?

The tax cuts were put in after 9/11...

The small change in the rates will do little to increase revenue....

The tax rates had little to do with the recession...

[DIB]

If the Bush tax breaks are so wonderful and so instrumental for the economy, then why didn't the original tax cuts help the country avoid this terrible recession in the first place?

How do you know they didn't prevent the recession from being worse?

[2121Sooner]

How do you know they didn't prevent the recession from being worse?

Cause the Dems blame Bush for everything.

I think they are working at blaming the Kennedy Assasination on Bush too....


Forget that the Dems took control of the House and Senate in 2006 and your brain doesnt hurt as much trying to figure out their logic.

[OklahomaTuba]

If the Bush tax breaks are so wonderful and so instrumental for the economy, then why didn't the original tax cuts help the country avoid this terrible recession in the first place?Or better yet, if Bush's tax cuts were so bad, why are the mules in such a scramble to keep them going??