President’s Tax Relief

[Guest American4Progress]

Many major donors are saying they may withhold funds from President Obama's re-election campaign because of the recent tax-cut compromise, the Los Angeles Times reports. "He's got many great qualities, but he is not a fighter," said one wealthy donor. "I've met with many donors and the level of disappointment is extreme."

 

According to the congressional Joint Committee on Taxation, the tax cut deal will add $857 billion to the federal debt over ten years. The two-year tax cuts for the wealthy will cost the government $407.6 billion, but the total effect of the tax provisions alone will add up to $801.3 billion in foregone revenue over the next ten years.

 

The Hill is maintaining a whip count of House Democrats' positions on Obama's tax deal. The paper lists 61 "Firm No" votes, 5 "Leaning No" votes, and 7 "Leaning Yes" votes. It also notes that Republican Rep. Jeff Flake (AZ) firmly opposes the deal.

 

Obama is considering a push to overhaul the U.S. tax code to lower rates and increase revenues in what would be "his first major effort to begin addressing the long-term growth of the national debt." Obama has directed his economic team "to review options for closing loopholes and simplifying income taxes for corporations and individuals, though the study of the corporate tax system is farther along."

[Guest Bulldog]

Republicans blocked funding for 9/11 First Responders' medical issues in the name of securing a 4% tax cuts for billionaires, so my question is: "Have They No Shame?"

 

Despicable.

 

That is fraked up! What is going on with this Congress. Are they on crack?

[Guest BlingBling]

12 billion taken out of the food stamp program by the democrats.

Keep on playing games. Keep on playing class warfare. Drive businesses out of this country.

 

The government will provide.

 

---------------------------------------------------------------------------------------------------

 

Once again this flim flam artist is trying to distort the truth. It took Democrats convincing Republicans in high unemployment states to support the bill. Most of them wanted to follow Newt's plan and get it gone.

[Guest LAW]

BlingBling you are talking to the wind. Greed does not listen to the needs of the working class.

 

http://www.youtube.com/watch?v=H5OtB298fHY

 

Speech by Sen. Bernie Sanders (I-Vt.) from the floor of the United States Senate on Tuesday, November 30, 2010.

 

Mr. SANDERS. Mr. President, there is a war going on in this country, and I am not referring to the wars in Iraq or Afghanistan. I am talking about a war being waged by some of the wealthiest and most powerful people in this country against the working families of the United States of America, against the disappearing and shrinking middle class of our country.

 

The reality is, many of the Nation's billionaires are on the warpath. They want more, more, more. Their greed has no end, and apparently there is very little concern for our country or for the people of this country if it gets in the way of the accumulation of more and more wealth and more and more power.

 

Mr. President, in the year 2007, the top 1 percent of all income earners in the United States made 23 1/2 percent of all income. The top 1 percent earned 23 1/2 percent of all income--more than the entire bottom 50 percent. That is apparently not enough. The percentage of income going to the top 1 percent has nearly tripled since the 1970s. In the mid-1970s, the top 1 percent earned about 8 percent of all income. In the 1980s, that figure jumped to 14 percent. In the late 1990s, that 1 percent earned about 19 percent. And today, as the middle class collapses, the top 1 percent earns 23 1/2 percent of all income--more than the bottom 50 percent. Today, if you can believe it, the top one-tenth of 1 percent earns about 12 cents of every dollar earned in America.

 

We talk about a lot of things on the floor of the Senate, but somehow we forget to talk about the reality of who is winning in this economy and who is losing. It is very clear to anyone who spends 2 minutes studying the issue that the people on top are doing extraordinarily well at the same time as the middle class is collapsing and poverty is increasing. Many people out there are angry, and they are wondering what is happening to their own income, to their lives, to the lives of their kids.

 

If you can believe this, since between 1980 and 2005, 80 percent of all new income created in this country went to the top 1 percent--80 percent of all new income. That is why people are wondering and asking: What is going on in my life? How come I am working longer hours for lower wages? How come I am worrying about whether my kids will have as good a standard of living as I had? From 1980 until 2005, 80 percent of all income went to the top 1 percent.

 

Today, the Wall Street executives--the crooks on Wall Street whose actions resulted in the severe recession we are in right now; the people whose illegal, reckless actions have resulted in millions of Americans losing their jobs, their homes, their savings--guess what. After we bailed them out, those CEOs today are now earning more money than they did before the bailout. And while the middle class of this country collapses and the rich become much richer, the United States now has by far the most unequal distribution of income and wealth of any major country on Earth.

 

Mr. President, when we were in school, we used to read the textbooks which talked about the banana republics in Latin America. We used to read the books about countries in which a handful of people owned and controlled most of the wealth of those countries. Well, guess what. That is exactly what is happening in the United States today. And apparently the only concern of some of the wealthiest people in this country is more and more wealth and more and more power--not all of them, by the way. Not all of them. There are many wealthy people in this country who understand and are proud to be Americans, who understand that one of the things that is important is that all of us do well. And this is an issue--greed is an issue--we have to deal with.

 

In the midst of all of this growing income and wealth inequality in this country, we are now faced with the issue of what we do with the Bush tax cuts of 2001 and 2003. And if you can believe it, we have people here--many of my Republican colleagues--who tell us: Oh, I am so concerned about our recordbreaking deficit. I am terribly concerned about a $13.7 trillion national debt. I am terribly concerned about the debt we are going to be leaving to our kids and our grandchildren. But wait a minute. It is very important that we give, over a 10-year period, $700 billion in tax breaks to the top 2 percent. Oh yeah, we are concerned about the debt, we are concerned about the deficit, but we are more concerned that millionaires--people who earn at least $1 million a year or more--get, on average, $100,000 a year in tax breaks. So we have a $13.7 trillion national debt, and growing, we have growing income inequality--the top 1 percent earning more income than the bottom 50 percent--but the highest priority of many of my Republican colleagues is to make sure millionaires and billionaires get more tax breaks. I think that is absurd.

 

But it is not only income tax rates that we are dealing with; it is the estate tax as well. And let's be clear. While some of my friends want to eliminate completely the estate tax--which has been in existence in this country since 1916--every nickel of all of those benefits will go to the top three-tenths of 1 percent. If we did as some of my friends would like--eliminate the estate tax completely--it would cost us $1 trillion in revenue over a 10-year period, with all of the benefits going to the top three-tenths of 1 percent.

 

So I am sure that in a little while my friends will come to the floor and say: We are very concerned about the deficit, we are very concerned about the national debt, but do you know what we are more concerned about? Giving huge tax breaks to the wealthiest people in this country.

 

Mr. President, the tax issue is just one part of what some of our wealthy friends want to see happen in this country. The reality is that many of these folks want to bring the United States back to where we were in the 1920s, and they want to do their best to eliminate all traces of social legislation which working families fought tooth and nail to develop to bring a modicum of stability and security to their lives.

 

There are people out there--not all, but there are some--who want to privatize or completely eliminate Social Security. They want to privatize or cut back substantially on Medicare. Yes, if you are 75 years of age and you have no money, good luck to you getting your health insurance at an affordable cost from a private insurance company. I am just sure there are all kinds of private insurance companies out there just delighted to take care of low-income seniors who are struggling with cancer or another disease.

 

Furthermore, there are corporate leaders out there, and many Members of Congress, who not only want to continue but they want to expand our disastrous trade policies. My wife and I went shopping the other day--started our Christmas shopping--and we looked and we looked, and virtually every consumer product that was out there in the stores was China, China, and China. We seem to be a country in which we have a 51st State named China which is producing virtually all of the products we as Americans consume.

 

Our trade policy has resulted in the loss of millions of good-paying jobs as large corporations and CEOs have said: Why do I want to reinvest in America when I can go to countries where people are paid 50 cents, 75 cents an hour? That is what I am going to do; to heck with the working people of this country. So not only are we saddled with this disastrous trade policy, but there are people who actually want to expand it.

 

One of the things we are going to see is while we struggle with a recordbreaking deficit and a large national debt--caused by the wars in Iraq and Afghanistan, caused by tax breaks for the wealthy, caused by an unpaid-for Medicare Part D prescription drug program, caused by the Wall Street bailout driving up the deficit, driving up the national debt--some people will say: Oh my goodness, we have all those expenses, and then we have to give tax breaks to millionaires and billionaires, but we want to balance the budget. Gee, how are we going to do that?

 

Obviously, we know how they are going to do that. They are going to cut back on health care, they are going to cut back on education, they are going to cut back on child care, and they are going to cut back on Pell programs. We just don't have enough money for working families and nannies. We are going to cut back on food stamps. We are surely not going to expand unemployment compensation. We have a higher priority, Mr. President: We have got to, got to, got to give tax breaks to millionaires. I mean, that is what this place is all about, isn't it? They fund the campaigns, so they get what is due them.

 

Amazingly enough, we have the CEOs on Wall Street and the large financial institutions that want to rescind or slow down many of the provisions--the very modest provisions--in the financial reform bill. I voted for the financial reform bill, but I will tell you clearly that it did not go anywhere near far enough, but it went too far for our Wall Street friends and their lobbyists, who are all over here. And for the hundreds of millions of dollars Wall Street spends on this place, they want to rescind, slow down some of the reforms there.

 

These people want to cut back on the powers of the EPA and the Department of Energy so that ExxonMobil can remain the most profitable corporation in world history while oil and coal companies continue to pollute our air and our water. Last year, ExxonMobil made $19 billion in profit. Guess what. They paid zero in taxes. They got a $156 million refund from the IRS. I guess that is not good enough. We have to give the oil companies even more tax breaks.

 

So I think that is where we are. We have to own up to it. There is a war going on. The middle class is struggling for existence, and they are taking on some of the wealthiest and most powerful forces in the world whose greed has no end. And if we don't begin to stand together and start representing those families, there will not be a middle class in this country.

[Guest LAW]

U.S. Sen. Sherrod Brown (D-OH) today joined a group Senators urging Majority Leader Harry Reid to consider an alternative tax cut agreement to strengthen Social Security instead of providing additional tax cuts on income over $1 million. Led by U.S. Sens. Jeff Merkley (D-OR) and Mary Landrieu (D-LA) it was also signed by Sens. Mark Begich (D-AK), Daniel Akaka (D-HI), Al Franken (D-MN), Mark Udall (D-CO), and Barbara Boxer (D-CA).

 

“Extending tax bonuses for the richest two percent of Americans will blow a $30 billion hole in the budget each year,” Brown said. “Meanwhile, Republican Senators denied seniors a cost-of-living adjustment to their Social Security benefits, a move that would help seniors make ends meet at a fraction of the cost. By enacting this compromise, we’ll see millionaires and billionaires become richer while more seniors fall into poverty. That is simply unacceptable.”

 

The letter calls for the restoration of Clinton-era tax rates for incomes more than $1 million. Without this change, the Obama tax cut proposal gives families making between $40,000 and $50,000 a year an annual average tax cut of $1,679. For families making over $1 million, the average tax cut is nearly $140,000. The generated revenue, the letter says, should be applied to shoring up the Social Security trust fund which is projected to exhaust funding in 2037.

 

Below is the full text of the letter:

 

Dear Leader Reid:

 

The tax package announced by President Obama and Congressional Republicans includes some important provisions that we strongly support, but also a deeply misguided allocation of resources at a time that the United States does not have resources to waste.

 

The Senate, however, can make it better. We ask that you ensure an opportunity for the Senate to vote on an amendment that will give the American people a clear choice whether they would prefer to give bonus tax cuts to the very wealthiest among us, as the package currently proposes, or to use these resources to strengthen Social Security.

 

Success in America should rightly be celebrated, but the very wealthy do not need bonus tax cuts and America cannot afford to give them. As you know, the agreement would require American taxpayers to borrow over $50 billion in order to give, on average, $100,000 in additional annual tax cuts to people earning over $1 million per year. These bonus tax cuts are on top of the $43,000 per year that millionaires will receive in tax cuts on their first million dollars of income. The Congressional Budget Office ranked these tax cuts dead last in terms of effectiveness in boosting economic growth and job creation. In a time of urgent national needs and long-term deficits, we believe the country has higher priorities than these huge tax cuts for the very wealthy.

 

Specifically, we propose to amend the package to restore tax rates on income over $1 million per year to the Clinton-era rates, and to dedicate the resulting revenues to shoring up the Social Security trust fund. The President’s National Commission on Fiscal Responsibility and Reform noted that in 2037, Social Security will exhaust its trust fund and be unable to pay full benefits, and consequently proposed a number of benefit cuts for seniors. Improving Social Security’s finances is, in our opinion, a more important national priority than directing tens of billions of dollars in taxpayer money to a relative handful of families.

 

We have grave misgivings about the recent tax agreement. We hope that the Senate can improve on it. We look forward to working with you to ensure a vote on our amendment to strengthen Social Security in lieu of bonus tax cuts for people who are doing quite well. Thank you.