this is the document itself -- it's fifty "pages" are presented in a power-point format. A lot of the stuff in here is the sort of thing that makes watching paint dry exciting by comparison -- which means that it's probably making a very legitimate attempt to address the issue of balancing the budget.
basically it does the following:
1. it calls for imposing caps on all discretionary spending (including defense) - and a lot of the savings come from things like freezing salaries and gradually reduce the size of the federal workforce.
2. it calls for a major tax reform to get rid of many if not all of the "tax expenditures" (i.e. special deductions) - and then put into place a new income tax with three rates for individuals (a bottom rate, a middle rate, and a top rate), and a single corporate tax. And all income incl capital gains and dividends would be subject to the same tax rules.
the new tax rate would be 8%-14%-23% (and 26% for corporations) if all the deductions were eliminated -- a more realistic tax rate would be 13%-21%-28% (and 28% for corporations) assuming we keep deductions for certain things like mortgages.
3. a lot of complicated stuff to get federal spending on healthcare programs under control.
4. a number of ideas for reducing spending on other entitlements like farm subsidies and civil service pensions.
5. a plan to strengthen Social Security - that includes raising retirement age very gradually, and using what it considers a more accurate CPI (the chained-CPI) for cost-of-living adjustments.
It appears that a number of Democrats are already much less than thrilled with this plan. Pelosi has called it "simply unacceptable". So far, the GOP doesn't seem to have said much of anything.
I would imagine there are those on the left that don't really believe we need to do much about the budget. In that case, come right out and say so and give precise reasons why you believe this to be the case. Others may want to offer a plan that focuses more on raising taxes on the wealthy and less on cutting spending. Fine. But then offer something.
As for the GOP, I hope they drop their plan to do nothing but whine about Obamacare and the Bush tax cuts for the next two years and instead take up this commission's proposal -- or offer something else if they have a better idea.
Perhaps we can put a number of different plans on the table and allow the American people to see what the real options are. And then we can start a debate in which everyone in Congress acts like an adult.
Originally posted by Melanerpes It appears that a number of Democrats are already much less than thrilled with this plan. Pelosi has called it "simply unacceptable". So far, the GOP doesn't seem to have said much of anything.
I would imagine there are those on the left that don't really believe we need to do much about the budget. In that case, come right out and say so and give prec ...[text shortened]... tions are. And then we can start a debate in which everyone in Congress acts like an adult.
A "deficit reduction" proposal that cuts taxes for the rich to their lowest levels in over a 100 years while slashing Social Security and Medicaid benefits is hardly going to be acceptable to even the most tepid "progressive".
Originally posted by no1marauder A "deficit reduction" proposal that cuts taxes for the rich to their lowest levels in over a 100 years while slashing Social Security and Medicaid benefits is hardly going to be acceptable to even the most tepid "progressive".
The overall tax rates become lower because it eliminates some or all the various tax expenditures. And it requires all capital gains and dividends to be taxed the same as regular income.
But progressives are more than free to offer their own proposals with higher taxes on the rich and fewer spending cuts. That's my point. Or if they don't believe we should be worrying about the budget, then come right out and say "I do not believe the budget is a problem" and give a list of reasons why.
Maybe the 2012 campaign will end up featuring the GOPs and Dems both peddling rival budget plans - but they'd be real detailed plans and not just a bunch of talking points. Let the election be a referendum on something more specific than "Obama's radical agenda" or "those nutty Tea Party people".
Originally posted by Melanerpes The overall tax rates become lower because it eliminates some or all the various tax expenditures. And it requires all capital gains and dividends to be taxed the same as regular income.
But progressives are more than free to offer their own proposals with higher taxes on the rich and fewer spending cuts. That's my point. Or if they don't believe we sh ...[text shortened]... mething more specific than "Obama's radical agenda" or "those nutty Tea Party people".
The increase in capital gains and dividends is trifling after the massive cuts of the last 25 years; from 15% to 23% at the highest brackets. The reduction in top rates from its present insufficient 36% to 23% is yet another giveaway of epic proportions to those who have benefited from government policies while the average workers' income has stagnated. And its on top of massive reductions in corporate taxes as well!
I already offered a proposal that relied on much bigger decreases in military spending (which this plan still leaves at ludicrous levels) and an increase in the top tax rates which would put them somewhere near Reaganite levels. This is what the people have expressed as their preference when asked in polls. But it is unacceptable to the economic elite who continue to want to pretend that the huge decreases in taxes for the wealthy over the last 30 years were insignificant in causing the budget deficits and that working and middle class Americans must now pay for said deficits with reductions in programs that have afforded them some small level of protection over the last 75 years.
The proposal is a fraud and as Pelosi said "unacceptable".
One has to admire the chutzpah of the politicians and economic elite in the US; who would have thought that a Deficit Reduction Commission would have the nerve to propose more tax cuts for the rich?
this is the document itself -- it's fifty "pages" are presented in a power-point for hat it considers a more accurate CPI (the chained-CPI) for cost-of-living adjustments.
I looked over it as soon as it broke on the internet. Something in there for everyone to hate which means that they are doing something right.
Edit: Mel, you wondered what the GOP would be against. I'd say making all capital income taxed as ordinary income should piss them off. There are also a lot of military freezes and cuts.
You were right to point out to no1 that the progressivity of the schedule increases. Plus the proposal calls for an even more progressive social security schedule. No1 won't be happy until people making over $100K/year are taxed at 70% and everyone else at -70%.
Originally posted by telerion I looked over it as soon as it broke on the internet. Something in there for everyone to hate which means that they are doing something right.
Edit: Mel, you wondered what the GOP would be against. I'd say making all capital income taxed as ordinary income should piss them off. There are also a lot of military freezes and cuts.
You were right to ...[text shortened]... won't be happy until people making over $100K/year are taxed at 70% and everyone else at -70%.
The progressivity increases by slashing the top rate by 34%???
Maybe your ECO department should offer a remedial math course.
EDIT: You're right, of course: reforming the tax code to increase the purchasing power of the working and middle class would be an utterly awful idea - much better to propose some more tax cuts for the rich.
Originally posted by no1marauder The progressivity increases by slashing the top rate by 34%???
Maybe your ECO department should offer a remedial math course.
EDIT: You're right, of course: reforming the tax code to increase the purchasing power of the working and middle class would be an utterly awful idea - much better to propose some more tax cuts for the rich.
Say hello to Milton for me.
Well, why don't you do the maths? If I understand correctly a lot of deductions which benefit mostly the rich will be abolished, so it may be correct. It's still a bad idea to have such a low top rate, of course, but it might still be an improvement over the current situation.
Originally posted by no1marauder One has to admire the chutzpah of the politicians and economic elite in the US; who would have thought that a Deficit Reduction Commission would have the nerve to propose more tax cuts for the rich?
Yes, who would have thought that a commission appointed by a Democratic President would decide that the only way to get out of our financial mess was to do something that would cost "ideological" Democrats there jobs if they turned around and supported it.
I'm not sure Republicans need to say anything -- they can just let Obama and Pelosi duke it out.
This is the most bipartison thing we have seen in ages...It seems like its going to "spread the pain around " a bit....So far I've seen pelosi show she has no interest in fixing the economic crisis...who is next?
Originally posted by KazetNagorra Well, why don't you do the maths? If I understand correctly a lot of deductions which benefit mostly the rich will be abolished, so it may be correct. It's still a bad idea to have such a low top rate, of course, but it might still be an improvement over the current situation.
I think one of the big problems we have right now is that the tax code is a monstrously complex thing. There are so many loopholes and deductions and exemptions in it. So the amount of taxes that a given rich person actually pays depends on a myriad of factors including the quality of their lawyers and accountants.
So ultimately, it's very difficult to tell exactly how much the rich are actually paying. Which makes it exceedingly difficult to have a debate over what constitutes a fair taxation level.
So I very much support the basic idea of eliminating every single one of those loopholes (or only retaining a very limited number of things like the mortgage exemption because it would be too toxic to touch them). Which would leave us with a very simple tax system such as the "Zero Option Plan" that is included in the commission's proposal -- something that everyone can understand.
Then let the debate begin over this simple three-tiered income tax + corporate tax - and whether or not we should raise the top rate. In fact, because the simplification will make it clear that the rich are really only paying a maximum of 23% on their income, it might make it that much easier for progressives like yourself to demand that politicians make the rich pay more.
Bipartisan Commission's budget proposal
11 Nov '10 23:172 edits
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