It seems Obama's deal here is more like an excuse for something
he wants to do personally than a compromise. Rolling over is not
compromising. His fall back position should have been to let the
tax cuts expire for everyone, and then sit tight with his veto pen
while asking for legislation to cut taxes for a reasonable definition
of the middle class.

Well, he wants to freeze my husband's civilian federal employee salary, which is capped and no more than middle class, and then give the money thus saved to the very rich by extending their tax cut.

Guess what we think?

We are ENRAGED at this republican in democrat's clothing!

PS: And no, we don't get a gold-plated retirement pension plan. My husband has to save up for retirement in his 401(k) account just like private sector employees.

Obama did what he had to do - he's done. So what is this obsession with the "very rich" that I always hear? My wife and I have an AGI a bit above that magic $250K number - that's decidedly middle-class in this area, and any additional tax burden is going to hurt! The six-figure and up wage earners are already paying more than their fair share in dollars - what about the 50% of potential taxpayers that aren't paying any tax at all?

That's right ten18, let's go ahead and have federal workers, who all make less than you make, subsidize your life style with their pay freeze and your tax cuts... That makes a whole lot of sense... not.

>> My wife and I have an AGI a bit above that magic $250K
>> number - that's decidedly middle-class in this area, and
>> any additional tax burden is going to hurt!

Hi ten18 ... I wish there was a nicer more polite way to say this,
but you are lying. I suppose there is a possibility that you do
not understand how the tax system works, but I would say
that is probably fairly small if you are making over $250K..

If you are just slightly over the "magic $250K level" then you
will owe no additional taxes. None but a scant few dollars
because it is only income over that magic number that is taxed
at a higher rate, so the different would only be the percentage
difference in tax rate at the higher rate on the amount you
earn over 250K ... right?

For example, let's say you make 270K ... and you tax rate
is going up from 25 to 30 percent, just as an example. Then
your tax bill would go up by 5% of 20K or $1000, or about
850 dollars a month on a

Even if those few extra dollars you might be paying do affect
your "Palo Alto" budget, do you sincerely believe that the
extra tax you would have to pay would hurt more than all
of the extra tax in the future all of us will have to pay, and
the interest on it from giving 800 billion to the wealthy?

If you make "just slightly" over that 250K number, then your
regular tax load during however many years it takes to pay
off that loan we are taking out for the rich is going to have
to go up at some point, and for longer to pay this money off.
Looking at the big picture slightly raising the taxes of those who
can afford it is probably the only way we are ever going to
crawl out from under this mess.

Only if this 1 trillion, out of the 5 or 6 trillion somehow makes
a significant difference in the economy, and we start sprouting
jobs like dandelions and government revenue magically goes
up and through the roof will this be an even reasonably good
investment.

But almost all economists who have talked about this say this
is an unnecessary and bad idea for our budget management.

Looking at it from another angle, it is a minority of people in
one party that is forcing this on the whole country. Does
that seem right to you in time of war and crisis to de-emphasize
the democratic aspect in our republic?

The more I think about this, the more I wonder why Barack
Obama would do this. This is likely his last chance to make
a meaningful stand for Democrats, and I'm sure he knows it,
yet he is giving in without a fight.

I have to wonder what else the man has been threatened with?
Why is President Obama so fearful or any kind of confrontation
and who is running the show when that is the case?

OOPS,

Then your tax bill would go up by 5% of 20K or $1000, or about 850 dollars a month on your approximately 20,800 a month income.

Imagine that, over 20K a month and you are going to be hurt by having to pay more taxes. By hurt do you mean minorly inconvenienced? How does that play out for you if you don't mind my asking? What do you have to do without? Health care? Your kid's education. Your education? Your car payment? House payment?

I don't mean to needly you, and I'm happy you can afford to live in this area, but I hope you get my point.

....Civil servant's wife

If you hubby is so special why not get are job in the public?

I need every nickel I earn and your hubby is just taking money out of my wallet. I know what ever he does is total unnecessary to me and my family.

The less government the better and soon you will all learn that.

Your ilk tried to shut down the government in the 90s, but I guess you were not born yet or you too easily forgot the uproar that ensued when all of sudden all those services provided by civil servants stopped.

Enough's enough. Cut waste and entitlements - then see if we need higher taxes. If I felt this government had and ounce of good sense how to spend our money, I might feel differently. And Anon - tax rates are scheduled to increase across the board - not just on our "last dollar." That $850 you think is some sort of pittance - feel free to write a check for it on my behalf. I don't have a car payment, and my salary has been cut over the last few years just like everyone else's.

>> That $850 you think is some sort of pittance - feel free to write a check for it on my behalf. I don't have a car payment, and my salary has been cut over the last few years just like everyone else's.

Sure ... anytime as many times as you want, you just write me a check for $20,000 first and I'll gladly give you twice that amount.

It is clear that you do not get the whole picture, and that you are being disingenuous at the very least in your convoluted attempts to make some kind of point.

I too am surprised by Obama's "compromise". The vast majority of his supporters are from that 50% who pay no taxes, so why did he do this? For the unemployment extension? At least that does help his supporters.

Seems to me that Anon's advise would have been Obama's prudent action. Just let the Bush tax cuts expire and veto anything that reduces the tax rates. That wouldn't hurt his base, and he could even say he did something to reduce the deficit.

Anon - your math is a bit fuzzy - as is your argument - the monthly net on a $250K income is certainly not $20K. After the fed, state, county and local governments are done extorting us through income taxes, property taxes, sales taxes, utility taxes, and hidden fees, there's what - 50% of that left? That doesn't even include the higher medical and energy costs that will result from the deranged legislation that's being produced by our state and federal legislatures. Oh, I get the big picture.

The government at all levels is too big and too expensive. We are reaping what we've sown in the way of reckless and irresponsible spending. I didn't ask for it, and I don't want to pay more for it. Cut spending and reduce the size of government - broaden the tax base - how is that disingenuous?

I totally agree with ten18, $250K is not considered rich in this area, it is only middle class. Yes, the rich can afford to pay more tax, so why don't we change the definition of rich, what about those that make more than $400K, twice the $200K allowed for single income? Or levy higher tax on consumption, the more money you have to spend, the more tax you pay? Or cap mortgage deduction to $500K loan amount since those that can afford higher mortgages are the ones with higher income?

These ten18 posts are hilarious.

I'll bet you are not sympathetic to the people who are losing their houses because they bought too much house, more than they can afford, but if you make $250K and can complain about having too tight a budget to live in Palo Alto you think the taxpayers of the country with worse problems should subsidize you.

You just cannot accept that not only does such a person as ten18 have bad judgement in money management by actually complaining that making $250 is not enough to be rich in the Palo Alto area, but you actually have no patriotism or morals in pushing your problems onto people who are much less able to help themselves - for real - not just whining.

A country full of such people cannot long exist. Someone has to put their foot down and do the right thing ... but sadly it is not our spineless President.

Anon - no, I am not sympathetic to anyone who knowingly bought more house than they can afford. Federal government policies are to blame for much of this (again, that judgement thing). My budget isn't tight, but I'd like to be able to save for my retirement too - retiring before 65 would be great. And who is subsidizing who? People in the higher tax brackets (the minority) are paying the majority of the taxes. Looks like those "much less able to help themselves" are the ones being subsidized.

Why should we pay more than 33% in federal taxes when the majority of taxpayers is only paying 15% - or less? The right thing would be a fair tax proposal. Feel free to put your foot down - but keep it off of me!

".... you think the taxpayers of the country with worse problems should subsidize you. ..."

Perhaps Anon can explain how letting ten18 keep more of the money he earns is a subsidy by those who pay less tax than he does or - even more mysteriously - by those who are consuming the taxes ten18 pays in the form of various unemployment, welfare Medicaid programs many of them take advantage of.

> Anon - no, I am not sympathetic to anyone who knowingly bought more house than they can afford.

Of course you are, your whole spin and points center around that. Not to mention your misleading statements at the beginning of this article.

If you intend to have a reasonable discussion relying on facts you cannot just claim from one moment to the next contradictory statements and expect to be taken seriously by hitting the correct emotional tone.

I live in Palo Alto, and $250 is enough to afford a niche somewhere in the economy here, and if it isn't then downscale or adapt just like everyone else does.

The point is the just because the rich have more money, power and influence enough to slant the government to work for them and put the pain on the backs of those who are disenfranchised or who do not have the money, power, or time to look after their political interests does not make it right, or moral, or just, or fair.

It is not fair when that difference gets beyond a certain point and we can all see it, even though some make pretend they are just as put upon as the unemployed about to be homeless and hopeless because they make $800 dollars less out of over 20K in a month when collectively we have a 16 trillion dollar debt.

That debt did not come from social programs or being too caring for the poor my friend.

If we are not careful, the entire Federal Budget will be consumed by Social Security, Federal Medical Programs and Defense...oh, and our loan payments to China and the Middle East. Nothing else will fit.

Fixing the problem is going to require both reductions and revenue increases. It's not going to be fun or comfortable, but that is the bottom line.

The tax code should be simplified - eliminate deductions, but income can only be taxed once. You pay for what you earned...no matter the source. Implement a national consumption tax on any items over $500.

Top 25% of Americans pay 85% of all the federal taxes. Gosh,those horrible people! Why don't we just let our government take everything it wants from everyone?

I mean, really, if it is unpatriotic and greedy to not give your earned money and property to the government, then why don't we just hand everything over to some wise government official and have him/her give back to us only what we need? THEN, finally, it would be fair for all!

After all, from each what he can, to each what he needs helped drive Cuba, the former USSR, China and now Venezuela into the world's leading economies!

Crescent Park Dad: Why not simply double the cost of everything we buy, with the additional 100% being a tax we pay to the government? If a tax on anything over $500 is good, then surely a tax on everything is better?? If a little tax is good, then a lot must be better for job creation, right?

I mean, like Pelosi said, every dollar spent in unemployment brings in $1.50 in economic growth, so clearly anyone still working at all is unpatriotic. We should just all get laid off and go on unemployment.

>> Why don't we just let our government take everything it wants from everyone?

This is hyperbolic nonsense. We have a problem ... what is fast turning into a existential problem with a lot of Americans, and the country in general, and the very wealthy refuse to take it seriously or contribute to the solution.

>> if it is unpatriotic and greedy to not give your earned money and property to the government,

Listen to yourself.

>> from each what he can, to each what he needs helped drive Cuba, the former USSR, China and now Venezuela into the world's leading economies!

Does anything you have to write or say have anything to do with the problem, or are we just to be entertained by this silliness? We are not talking about Cuba becoming a leading economy, the subject is the downward trend in many dimension of life in the USA for Americans.

Anon: Yes, it is all related to the problem. As long as we are ruled by marxist economics, we will continue to slide down.

Marxist economics are from each what he can, to each what he needs, decided by someone else, of course. It is all about class envy and the greed of those who didn't work for something wanting to take it from those who did. It is all about the government deciding which businesses win (Tesla) and which fail ( oil drilling companies). It is about taking the control of the finances away from those who know how to grow an economy, and giving it to those who have never even run a lemonade stand.

Until we have reverse this crazy thinking in our leadership, we will continue to fail. The ones who start businesses, grow them, employ others, create and risk...they are the ones we need to keep happy and HERE, risking, creating and growing. We don't need to send them into hiding.

I prefer to keep working for the "rich" than tax them and get laid off. Looking at my paychecks for the last 30 years, I don't see any signed by a middle class or poor person.

But, be my guest, keep it up, keep railing against the very people and businesses that employ us...see where it gets us.

> Fixing the problem is going to require both reductions and
> revenue increases. It's not going to be fun or comfortable,
> but that is the bottom line.

No that is not really true. You should not assume anything. The political actions, mostly of the Republicans, and the information of the corporate-military-owned media have brought about this crisis and are driving it for a reason.

That reason is to overthrow the existing social safety net order in favor a third-world type tyranny of money and corruption. Building up a situation where 40% of what we pay in taxes goes to paying interest to those domestic and foreign interests with enough money to buy government debt instead of paying their taxes is what has brought this about, and a dishonest discussion and information repeated and bombarded from the media.

I can see where those rich enough, particularly in this area, to afford to pay people pennies to get things done which allows them save even more money and build even more power is appealing to some who claim that they do not get to save enough of their money ... it's just that it seems they are blinded by greed and short-sightedness to sell out the country for the right to hire illegal aliens and push wages down to the point where anyone who works for a living has to accept those kinds of wages and insecurity.

America is being changed, and no one is getting a chance to be informed or to vote honestly on this, just as in the third world no one gets to vote on the debt their governments pile on their heads, so by any moral terms, citizens should not feel they are bound by the decisions of a government that does not represent them. This is a corrrupt-third-world dynamic we are having.

It makes me feel sick to see this happening to America and not have there be any patriotic institution that has not been bought out or corrupted to oppose it.

The Republicans are definitely winning. Excluding 2% of the payroll tax is a direct attack on the Social Security pension fund. If the Republicans can't end social security pensions directly, they will do so indirectly by reducing the amount of taxpayer's money that goes into the SS trust fund.

I may not suffer but when my children come to retire they'll be told there's no money left in either social security or medi-care. On the other hand many of the young voted Republican and Tea Party, so they won't be able to complain when it comes time to retire and there's no money left in SS for them.

>> As long as we are ruled by marxist economics, we will continue to slide down.

Yawn ... you really say we are ruled by Marxists?

If a Wall Streeter bringing home $40 million in salary and bonuses every year had to pay the full pre-Bush 36% tax rate, he would have just $25.6 million left to feed, clothe, and house his family. How many of you have ever tried to live on that? The Bush tax cut saves him an extra $1.2 million. With careful budgeting, that keeps his family from going homeless. But the Democrats want to take that away.

"The Bush tax cut saves him an extra $1.2 million. "

And think of ALL THE JOB CREATION he will do.

In another country, by socking it away in an overseas bank.

/snark/

>> And think of ALL THE JOB CREATION he will do.

yeah, according the documentary "inside job" those wall streeters are great at employing drug dealers and prostitutes right here at home.

$1000 a year in extra taxes is $85/month, not $850/month.

>> $1000 a year in extra taxes is $85/month, not $850/month.

Egads ... I'm totally embarrassed on that ... you are right ... the tax increase for someone making just over 250K might be about 5% of the amount over $250.

In the case of the example of a 270K income, the marginal amount would be $20K and 5% of the would be $1000 ... a year, or as you say about $85 a month ... out of $22,500 a month.

Sorry about that ... what a goof.

In this case the total increase in the taxes of this taxpayer would be about 0.4%.

That seems bearable and not too much of a burden on anyone.

Anon, I would like to simply take .4% more of whatever you earn..that ok with you? And then, I would like you to live and spend and make decisions never knowing how much I am going to decide to take from you next year, and the year after, and the year after. Never knowing if I am going to throw a new rule at you that destroys your income yet more.

Never know, in the name of you doing your patriotic duty, I might decide I need to take 75% of everything you earn next year, and I might decide to put a moratorium on your business so you lose it.

How would that affect your living/spending/saving style knowing you had no ability to predict next year in any way?

Wow, just read where the Congressional Dems, who still have their 4 years of power in their hands, voted to vote "no" on this tax compromise.

I really, really, really really hope they kill the bill. I really really do. That would be the best Christmas present for me. T

Then when the sweep takes over in mid-January, we can have the kind of bill that we SHOULD have had months ago. No new taxes, unemployment to work program, FAST, like we do on welfare.

I don't care if Obama gets the credit like Clinton did in the 90s for all the good things the Repubs did then ( unfortunately they lost their way by the time Bush came around). In this new information age, I believe more folks than ever will understand who is doing what, and I believe we are past the naive belief that somehow the PRESIDENT is in charge and can take all credit and all blame.

This is such major crap - it is so unjust.

Democracy Now is the only place that is was reported that the taxes on the poor are actually going up too.

From Democracy Now:

The plan’s $900 billion cost will be added to the federal deficit, not made up through spending cuts or the closing of loopholes that have taxed capital gains and dividends at just 15 percent. By contrast, the only group that will see its taxes increase are the nation’s lowest-paid workers. Individuals who make less than $20,000 and families with earnings below $40,000 stand to see tax hikes because Obama agreed to eliminate his Making Work Pay credit, which provided up to $400 for individuals and $800 for families of low and moderate income.

Yawn - for the record, I'm a fiscal conservative. I'm also a realist.

Like it or not, we're going to have to do both cut and increase revenues to clean up this mess.

Honestly, we should have left the tax rates the way they were under Clinton. And we should have kept out of Iraq and the "'stans". Then the stupid Medicare thing from Bush. Should have kept Glass-Steagall too. Should have let the banks and autos fail, go Chapter 11 and fix the problem themselves, instead of on my dime. The mistakes made under the previous 2 presidents are going to kill us - let alone the fiasco of ObamaCare. Don't get me started with Pelosi and Stimulus - what a crock and a waste of money.

I'm thinking 0.01% tax on single items over $500, not the total bill. So you pay $555 (rounding up for local/state sales tax) instead of $550. $5. How often do we buy any single item that's costs over $500? A car. An appliance. A TV. Not that big of a deal.

BTW - when I say simplify the tax code, I'm saying "flat tax".

At our house we are not counting on getting a dime from Social Security. And we also have little faith in government medical funds. It's all going to go "poof" in the next 20 years.

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CPD there is no "cleaning up this mess" without Saving Social Security and Medicare. The flat tax is unfair in the extreme especially at low income levels.

I don't now where you get off jumping into the middle of this and ignoring the topic and what was said before and then injecting the typical Republican talking points out of nowhere?

It may all go POOF in the next 20 years, but there would be no reason for that other than the continuation of the massive corruption we are seeing.

Obviously you didn't see my first post in the thread - I'm answering "yawn"...

Flat tax works if you eliminate all of the loop holes and deductions that the upper income levels avail themselves to every year. And you set a minimum income level - forgot to mention that. Have two rates if you want - just get rid of all of the deductions, credits, etc. There are a lot of people making upper six figures (or more) who avoid taxes via deductions. Same goes for corporations...

Saving SS and Medicare is cleaning up the mess. Neither program can run forever under the current funding and expenditure models. I'd raise the cut-off income beyond the current ~$113K. I'd also add in a "means test" for distribution.

Um - the Republicans don't want to go back to Clinton era tax rates. So strike one on your criticism. The Republicans don't want to go back to Glass-Steagall - strike two. The Republicans are all for the Middle East wars - strike three.

I'm not exactly injecting GOP talking points if you can agree that I just poo-poo'd so many of the things that they voted for and I'm against...

the flat tax works if you want to tax everyone the same ... just as a dollar to someone making minimum wage is not the same as a dollar to someone making over 250 there is a gradient in character in economic income that is totally ignored with a flat tax.

flat tax supporters are either liars supporting benefits for someone else because they thing the someone else will pay them in some way, or they do not understand the basic ideas of math or economics.

the argument in favor of the flat tax is basically, nothing we do works in terms of taxes anyway, so why not do something totally different that we know won't work either to waste time and fog up the debate.

A flat consumption tax, with cutouts for essential survival items (food, basic utilities) would be the best tax. Of course, this means the elimination of ALL income taxes, and property taxes, etc.

The U.S. Congress will never approve such a tax, because it removes its basic taxing authority, through which it exercises its power. It will probably require a Constitutional ammendment to impose such a fundamental change.

It is long overdue...and it WILL happen, but it will probably be another 15-20 years before the ink dries on that new ammendment. In the meanwhile, we will continue to drift down into oblivion....

the flat tax and all the over positive feedback-loop to the very wealthy are dishonest solutions that will not work and are not compatible with a middle class in America or democracy.

listen to those who support the flat tax for a while and they are always dishonest in promoting something that is dishonest ... the only flat part of the flat tax is that it is a flat out cheat to 98% of Americans.

Anon - I am curious - what is your proposed solution to the Federal budget deficit?

>> Crescent Park Dad
>> I am curious - what is your proposed solution to the Federal budget deficit?

My best answer to that is to point to the book "Aftershock" by Robert Reich. I believe Mr. Reich best understands the problems that United States has brought upon itself, and offers solutions that in the long term will rebuild the country's economy and place in the world.

In the short term, I believe Obama faced with the problem should have been prepared to let the unemployment extension lapse along with the Bush tax cuts clearly telling the American people why, and waiting with his veto pen, requesting legislation to fund a reasonable middle class tax & unemployment extensions. This was no compromise in my opinion, this was a farce and the whole government knows it.

Letting the Bush Tax cuts expire for $250K and above would have been reasonable morally, and experimentally - we will learn something. Republicans are terrified that is there is an uptick in the economy without tax cuts for the top 1% they will be cast into hell for a generation for what they have done.

We have been through 10 years of tax cuts for the top 1% already, irresponsibly started under Bush when we were already almost 6 trillion in debt, and it has landed us here in purgatory where we somehow have to pay our bill. it is time to try a bailout for the middle class while it still exists. The United States currently has the most disparity in wealth of any nation in the whole developed world and has the least economic mobility as well. All trends indicate our policies are not designed to bring back the country but to force it into a new reality - that no one got to consider or vote on.

Hey Anon - the top 1% of taxpayers accounted for 38% of federal personal income tax payments in 2008, while the bottom 50% only paid in 3%. That's fair? Sounds like the lower tiers are getting quite a break already!

As for the claim that there's a new reality that nobody got to vote on . . . uh, you forgot November 2? People thought they wanted a neo-socialist government when they elected Obama, but once they saw the reality, they obviously changed their minds.

Thanks Ten18. I get exhausted trying to speak to walls.

BTW, Anon, the poorest "pay more in taxes"??? You must be kidding...Do you understand what "pay taxes" means? Do you realize that you have to actually PAY taxes to pay more? What you are quoting does not mean the poor's taxes go up, it means there would be less transfer from those who pay taxes to those who don't.

You gotta remember..all schools, roads, police, military, social services, welfare, food stamps, housing allowances, medicare/medicaid, unemployment, disability, etc are paid for by fewer than 60% of the nation's adults ( about 56% rif you factor ALL taxes, 52% if you factor just Fed taxes). This means the lower 40-48% pay nothing, and in fact benefit from the use of all of the above, and half of that group get payment transfers to them.

I lived in subsidized housing once..I saw who was there. I went to work and saved money to get out, while my neighbors drank and smoked and partied. I got out..they didn't. ( Well, there were 2 of us in the whole apt building). They were fine where they were.

The more people we pay to not work, the more unemployed we have trying to make money by milking the taxpayer cow.. We have LONG left the era where there was shame in taking charity, and are well into a time when there is an "entitled to it" feeling amongst many, maybe most, of those who are "getting". Hard to fight that except to stop milking our cow dry and let people get uncomfortable enough to figure out how to take care of themselves.

There were a couple there who clearly needed the help. They are not the problem. But, if I am extremely generous, no more than half actually needed the help, the rest were, frankly, bums doing nothing to help themselves and feeling entitled to the taxes I was paying to keep them at home, and to help pay for the babies they were having as a "paycheck" train, while I was waiting until I could take care of my own babies.

Taught me a lot.

Get the point yet?

CP Dad, we agree on most, apparently. I disagree violently on anything which will hurt businesses, and any increase of taxes will kill a little more business.

The tax rate of post 9/11, combined with the knowledge of a steady hand for a few years in office and congress, helped us recover from the shock of 9/11 a lot faster than if we had had a sudden increase in taxes and loose cannon approach of "planes are dangerous, shut down planes" that this Admin has taken. So, I disagree with you. We were in business, and came within an hair of going bankrupt after 9/11, but pulled out just in the nick of time, thanks to the steady hand and tax cuts of Bush. And went on to employ 50 people ( until we lost our business last year....never saw the Mack Truck of the Community Reinvestment Act perversion of Clinton and Bush through Fannie/Freddie coming toward our economy, and our business. Never knew it was even possible for our govt to be THAT stupid).

Anyway, apologies for not getting your full point. I am pretty hard line on any tax or regulation increase in these times. I am against any slippery slope anything. As for the flat tax, I am completely for it, but it will never,ever fly in this country. At least 30% of the country actually thinks like Anon above, and at least 90% of the media thinks like him..do you think there is a chance of a snowball in hell that we could get the word out to the masses about how much better this would be for our economy, and thus ALL of us?

Not. Just look at the snow job the media gave the people on Obama...first time ever not one journalist even tried to track down ANYTHING about a candidate.

At the risk of blathering on, I will quit now.