In the back of every Washington politician’s mind is this sobering fact: Unless Congress acts, the temporary tax cuts it passed when George W. Bush was president will expire at the end of next year.

If the Democrats who control Congress do nothing and let the tax rates on the highest income brackets return to their pre-2001 levels, their Republican rivals and many Americans will slam them as tax hikers.

If they prevent the legislation from expiring, however, they and any Republicans who support this approach will add $2 trillion to the already-growing federal budget deficit over the next decade. The news media and influential watchdog organizations will slam them for that.

What does the President want to do? Remember his watch word: Change.

President Barack Obama has said that he expects to retain most of the Bush tax reductions, letting them expire only for individuals or couples who earn more than $250,000 annually in taxable income. This would apply to income taxes and to capital gains on investments, making Bush’s tax cuts Obama’s tax cuts.

Under Obama’s plan, high earners no longer would fall into a 35 percent top tax bracket, but into new 36 percent or 39.6 percent brackets. Capital gains taxes would rise from the current 15 percent to 20 percent for long-term investments, and up to 39.6 percent for gains from short-term investments.

And how will this affect “Jobs, jobs, jobs”?

What Should Happen To The Bush Tax Cuts?

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  1. Uncle Don says:

    Obama’s plan is fair, though for my benefit keeping the deficit-generating Bush plan is the only way.

    On the other hand, another 1929 depression isn’t for me.

  2. Pmitchell says:

    keep the Bush tax cuts add more for small business to stimulate the economy and then cut govt spending to only what we take in.

    Dissolve the NEA, dept of education, dept of health and human services, hud and any other that is not explicitly allowed by the constitution and leave it up to the states to fund the other programs them selves if they choose to.

    then line up and shoot every single congressman and senator and lobbyist (after a fair trial where they will be found guilty of treason)

    that should be a good start to restoring our country

  3. dusanmal says:

    Keep tax cuts as even that much is too much. Cut Govt. spending at every single possible place. Realize that we are now country in economic trouble, poor, in overwhelming debt and adjust spending accordingly. And savings exist everywhere: return most (90+%) of troops from Europe, cut troop levels from tense but relatively safe places around the World (50+%); stop completely Govt. driven International aid of any kind (we are poor as a Country and can’t/shouldn’t give until we do not owe anything; individuals should take over that humanitarian duty [instead of using money to undermine our political system ex. Soros]); cut Govt. agencies and scale their average pay to Country-wide average pay; stop paying any domestic non-govt. agencies for whatever they do (again – move this obligation to concerned individuals); sell Govt. real estate which is not essential; raise money by emergency sale of unrestricted natural resource expl. rights (overriding any State and Fed. regulations);- just for the start… Make commitment for no new or increased taxation for a decade AND commitment of the budget with 1 T$ surplus per year for a decade (via budget cuts of everything not essential).

  4. Postman says:

    #2,

    There are not longer any small businesses in the USA, so giving them a tax break does nothing. Think about it, I bet in your town, every restaurant is a big corporate chain. Every retail is the same, and you probably also have a NAFTA impact zone where all the smaller manufacturers used to exist, but are now barren and empty buildings.

    We should go back to a confiscatory tax scheme where individuals making more than 250k and couples making more than 500k are subject to a 90% tax rate, on all their income over those amounts, be it income or capital gains.

    Also, the top rate for capital gains should match or be greator than income tax, because it is bad policy to not tax people for not working… It causes them to invest in risky investment schemes, like the ones that created the current economic climate.

  5. Dwight David Diddlehopper says:

    “What should be done about the expiring tax cuts.”

    Sell your stocks and take the capital gains before the tax cuts expire, of course. And probably sooner is better than later because there will be a lot of “profit taking” as we get further in to next year.

  6. The Ox says:

    The Bush tax cuts had nothing to do with jobs and everything to do with gutting our government’s ability to deal with the issues we face. The tax cuts went to those with plenty and were paid for with borrowed money. I’d say it’s about time for the people who received that borrowed money to begin paying back at least the interest. So yeah…the tax loans…they need to go.

    “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” – FDR

  7. stopher2475 says:

    I feel bad Postman has no restaurants to go to. The best ones in my town are the smaller ones. That would be a nightmare.
    Anyhow, I don’t necessarily agree with 90% but letting them go back up to the Clinton era rates for people making 250k isn’t going to put anyone out and is more fiscally responsible. It’s a couple points and I’m sure after the accountants get done with it it will be even less.

  8. brm says:

    #4:

    “There are not longer any small businesses in the USA”

    You’re dumb.

  9. Dallas says:

    Let’s leave them in place since they worked wonders.. oh wait.

  10. tydas says:

    don’t forget that in this game the ‘rabble’ must be kept content lest we face a revolt…and please, if you are going to say cut..cut..cut then also say defense, corp. welfare, etc…

  11. bill says:

    It’s simple math:

    more taxes = less jobs
    less taxes = more jobs = more taxes (eventually)

  12. Uncle Patso says:

    Think tax rates are high now?

    From Wikipedia
    http://en.wikipedia.org/wiki/Taxation_history_of_the_United_States

    “Congress enacted an income tax in October 1913 as part of the Revenue Act of 1913, levying a 1% tax on net personal incomes above $3,000, with a 6% surtax on incomes above $500,000. By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War I. The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000) in 1945. Top marginal tax rates stayed near or above 90% until 1964 when the top marginal tax rate was lowered to 70%. The top marginal tax rate was lowered to 50% in 1982 and eventually to 28% in 1988.”

    Chart of the highest income tax brackets in the U.S. in the last 95 years at

    http://portfolio.com/interactive-features/2008/03/Tax-Brackets/

    = = = = =

    It amazes me how many people want to live in a weak country. Want to see what it’s like living in a weak country? Try a vacation in Somalia, Liberia, the Balkans, the ‘stans, Haiti. Then imagine what it would be like in your state if there were no U.S. government.

    And the Laffer curve is still as laughable as ever. If collections go up as rates go down, we should lower the rates to ZERO and get INFINITE collections! Why, negative rates should provide TRANS-INFINITE amounts! We’ll rule the UNIVERSE! HA-HA-HA-HA-HAAAAAA!!!

    Let the tax cuts die!

  13. Cursor_ says:

    “Eisenhower believed that taxes could not be cut until the budget was balanced. “We cannot afford to reduce taxes, [and] reduce income,”

    “Eisenhower kept the national debt low and inflation near zero”

    Kill the tax cuts. They have not worked, we need money to fix all the problems we have and rebuild our aging and crumbling infrastructure.

    We have more “I-35W” bridges waiting to happen.

    Take care of the USA now, don’t put it off.

    Cursor_

  14. HeeHee says:

    #6 is correct
    #14 is also correct

    Taxes hurt the middle and lowest earners much more than the high earners (who can afford to pay them). Yet, the highest earners are helped most by the benefits of being Americans – and they wail the loudest against paying taxes.

    Lottery Republicans: Low wage earners who don’t owe much tax; but IF they hit the lottery, they don’t want to pay taxes on it.

    You live here, shut up and pay your way.

  15. RTaylor says:

    The estate tax shouldn’t be reinstated at the million dollar level. That’s a 45% tax. At least keep it at the $3.5 million exception. This tax can destroy family businesses.

  16. Thomas says:

    #13
    > And the Laffer curve is
    > still as laughable as ever.
    > If collections go up as
    > rates go down, we should
    > lower the rates to ZERO
    > and get INFINITE collections!

    They say that ignorance is bliss which would explain your laughter. Apparently, you never learned about curves in mathematics. To present the other side of your laughable analogy, why don’t we raise tax rates to 100% if increasing taxes increases tax revenue?

    The tax revenue as a function of tax rate occurs on a curve where at the optimal rate any increase would lower tax revenue just as any decrease would lower tax revenue. This the Laffer Curve and it is not in dispute. Where there is great disagreement is knowing our exact location on the curve. Are taxes too low or too high? Given Obama’s increase in tax rates (both direct and indirect) and his desire to let the Bush tax cuts lapse, we are about to find out.

    Would you be in favor of increasing tax rates if you knew it would lower tax revenue?

  17. Rick Cain says:

    Who honestly cares.


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