Free Markets, Free People

Politics now takes center stage as tax deal moves to Congress

Let’s get a few things straight, shall we?   For the most part, this deal between Obama and the GOP on the Bush era tax rates isn’t a “tax cut”.  It is a maintenance or extension of the current tax rates.  There is nothing – absolutely nothing – permanent about any tax rate.  They’ve ranged all over the place in the history of the income tax and are, in fact, subject to the whims of Congress.  Within this package  there are some tax cuts (payroll taxes for a year) and tax giveaways (EIC, etc).  Other than that, it’s about keeping the current tax rates for everyone in a time of economic hardship.

Consequently it isn’t costing the government anything except a few rosy revenue projections if it had been able to increase taxes on the wealthy.  And consequently, at least that part,  adds nothing to the deficit.  Got that?  Nothing.  What adds to the deficit is spending based in borrowed money.

And that problem is found in the extension, again, of unemployment benefits.  So if there’s a spending negative, that’s it.  Some may argue that it’s necessary.  I personally wonder about that. 

Anyway, it is important, as the spin begins to come out on both sides about this deal that the basics be understood.

Yesterday a petulant president tried to defend the deal at a hastily called news conference.   Once into questioning, a bit of bitterness began to show through.  This particular quote struck me:

And I will be happy to see the Republicans test whether or not I’m itching for a fight on a whole range of issues.  I suspect they will find I am.  And I think the American people will be on my side on a whole bunch of these fights.  But right now I want to make sure that the American people aren’t hurt because we’re having a political fight, and I think that this agreement accomplishes that.

It reminded me of the kid picking himself up off the dirt of the playground after getting his rear end kicked and yelling “next time your butt belongs to me” at his antagonist.   Obama then goes on to call John Boehner a “bomb thrower” and compare the Republicans to hostage takers (to be fair, he was none to kind to the “professional left” and even took a shot at the New York Times).

But the bottom line remains, the GOP succeeded in getting the tax rates extended for all to include thousands of small businesses who would have otherwise been hit with higher taxes.  And what Obama is left saying is, “you know that line in the sand about doing away with tax cuts for millionaires, the one I drew 3 years ago and have promised to do away with ever since?  Yeah, well, wait till 2012, by gosh”.

Another interesting quote from the newser was this:

So the issue — here’s the choice.  It’s very stark.  We can’t get my preferred option through the Senate right now.  As a consequence, if we don’t get my option through the Senate right now, and we do nothing, then on January 1st of this — of 2011, the average family is going to see their taxes go up about $3,000. 

Is that a fact?  What have we heard for years concerning what the left continues to call the “Bush tax cuts”?  That they were primarily “tax cuts for the rich”.   Of course, they were much more than than and as is obvious, Democrats can’t allow them to expire or that nasty little truth would suddenly become widely known.

Finally, this struck me the wrong way:

This country was founded on compromise.

No.  It wasn’t.  It was a nation founded in a principle – that which said people have the right to be free from oppressive government and have the right to do what is necessary to accomplish that.  Any compromise had to do with the particulars of accomplishing the principle, not in the principle itself.  Obviously politics is the art of compromise.  What isn’t to be compromised is that founding principle and it is the ongoing compromise of it – or at least an attempt to do so – that has people figuratively up in arms.  Those Gadsden flags are waiving for a reason.

Anyway, each side is busily spinning a “win” for themselves on this particular deal.  All the while, political resistance is forming on both sides of the aisle in Congress.  Pelosi and Reid both seem less than enthusiastic about it and have signaled by their language that they may not have the votes to pass it.

Politically, the next few days should be interesting.



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17 Responses to Politics now takes center stage as tax deal moves to Congress

  • This country was founded on compromise.

    Oh, absolutely!  It took literally years of tough negotiations, but we finally reached a compromise with George III wherein he graciously allowed us to have our own country in return for our pledge to stop shooting his soldiers.

    / sarc

    Once again, I get the idea that The Dear Golfer doesn’t understand plain English, much less our country and its history.  It’s sort of like when he denigrated “American exceptionalism” by comparing it to the natural, patriotic pride that other people have in their own countries.  We do not regard our country as “exceptional” because it’s big or rich or just because we happen to have been born here: it IS exceptional because we were the first nation conceived in liberty and dedicated to the proposition that all men are created equal.

    • “it IS exceptional because we were the first nation conceived in liberty and dedicated to the proposition that all men are created equal.”
      Think about it Doc, he’s doing his best to change that with the help of Nan and Harry- and when they’re done, we’ll no longer be exceptional, we’ll just be the super delux version of  a banana republic.

    • He’s not 100% wrong though.  During the founding, Slavery was allowed to exist – that was an unhappy compromise that we paid dearly for.  And the bill of rights was added as part of a compromise as well to appease certain members about the limits of the govt.

      • Excellent points, but I suggest that they constitute what McQ calls “particulars of accomplishing the principle”.  In the general principles first of independence and then of a republican federal government, there were no compromises.

        • And those principles endured and expanded such that slavery was eventually banned.
          There is a big difference between principled compromise for the better, and compromise with evil/statism/looters.

  • I find the whole thing a bit odd. In practice most compromises are celebrated by the negotiators, you get lots of false bonhomie about finding common ground and putting aside differences for the good of the public. I heard some of those words but the context was dissonant. A good summary would be, “I had to do this because those bastards on the other side forced me between a rock and a hard place.” Based on my view of American politics over the past 30 years, it was a dramatic departure from how politics is practiced in pubic.
    We have our first Peter Principle President. He makes Carter look adequate.

  • Even if it doesn’t pass, Baracky badly damaged himself with this.  And his snotty, un-presidential press conference didn’t help either.

    Boehner is a “bomb thrower”?  Huh.  Pres. “I won” sure has his panties in a bunch. I suspect he’ll get no relief going forward when Boehner is actually in charge of the House, and the Dems have a teeny tiny margin in the Senate.

    Dude, you threaten Boehner not to test you?  You already flunked the test.  If this were prison, everyone would know who’s punk you’d be.

    One termer.

    • I think he’s worse off if it doesn’t pass, taxes go up and the economy remains bad as a result.

    • Boehner is a “bomb thrower”?
      Next to the definition of “Men In Black” is a picture of John Boehner.  He is a figment of your imagination.

  • It is interesting that Obama cut a deal with the GOP, which is not yet in power (except the ability to filibuster in the Senate).

    The left and the Democrat elite in both houses don’t like this compromise. The Republicans don’t like it much either.

    If this thing goes down in flames, Obama looks like an idiot (even more than he does now, that is), tax rates go up, and the economy is hurt at a bad time. But Pelosi et al don’t like it, and the only reason they have to support it is to support Obama. What could go wrong?

  • A deal is generally considered a good deal when both sides are happy or when both side are unhappy.

  • At an off-camera briefing this afternoon, National Economic Council director Larry Summers said that a failure to pass the tax cut compromise President Obama negotiated “would significantly increase the risk” of a double-dip recession.

    … and they let it go till now ?

  • ‘Bomb throwers,’ ‘hostage takers,’ and ‘terrorists.’  Sure sounds like he’s questioning certain Republicans’ patriotism.
    And no doubt the ‘No Labels’ bunch will be right out there denouncing it, yessiree.  Any minute now.

  • I saw a chart recently that showed that actual tax receipts as a percentage of GDP has remained basically constant at around 19% for the last 50 years or so.
    So, if you want to collect more taxes, you should try to do something to increase GDP – like maybe cut taxes even further.

  • when the economy was good years ago the republican argument was” don’t raise taxes in a good economy”. Now it’s “don’t raise taxes in a recession”  The only thing consistent about repubs is that it is never a good time to tax millonaires.

    • Yeah, you’re right: in our opinion, there really is never a good time to take other people’s money, whether they are a dirty millionaire (who actually deserves to be thrown into prison or even shot for the crime of daring to have a lot of money) or just an average person.