Senate Democrates add millionaire tax to jobs bill

[mirage62 0]

WASHINGTON (AP) - Struggling to deliver the big jobs package proposed by President Barack Obama, Senate Democrats are using the issue to force Republican senators to vote on tax increases for millionaires, picking up on a White House theme that the nation's wealthiest Americans aren't paying their fair share.

Senate Majority Leader Harry Reid, D-Nev., said Wednesday he is changing Obama's jobs package to add a 5 percent tax on income above $1 million, a proposal that is sure to be blocked by Republicans.

The $447 billion package still includes Obama's proposals to cut payroll taxes and provide money for teachers, firefighters, the unemployed and infrastructure. The tax on millionaires is expected to pay for the package, so it wouldn't add to the budget deficit.

Democrats are banking on Republicans to oppose both the higher taxes on million-dollar earners and the president's call for new spending aimed at reducing joblessness, leaving them open to a charge of protecting the wealthy at the expense of the unemployed.

"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off, rather than have millionaires and billionaires pay their fair share," said Sen. Chuck Schumer, D-N.Y. "Republicans will struggle to defend putting off repairs to crumbling schools in order to protect tax breaks for the wealthiest 1 percent of America. This is the contrast that will be on display in the Senate next week."

Reid said he plans to bring the bill up for a vote in the Senate next week, though without Republican support, it won't get the 60 votes needed to advance. Republican leaders said they won't support tax increases, even on the wealthy, because they would hurt an already weak economy.

"I understand our Democrat friends want to jettison entire parts of the bill altogether — not to make it more effective at growing jobs, not to grow bipartisan support," said Senate Republican leader Mitch McConnell of Kentucky. "No, they want to overhaul the bill to sharpen its political edge."

The new 5 percent tax would be applied to adjusted gross income above $1 million — that's income before itemized deductions are subtracted — including income from capital gains and dividends. The top tax rate on earned income is currently 35 percent. The top capital gains tax rate is 15 percent.

The tax increase would raise about $450 billion over the next decade, paying for the entire jobs package, Reid said. It would take effect Jan. 1 — a year earlier than the tax increases in Obama's original package.

Obama has said raising taxes during a weak economy is not a good idea and, campaigning for his jobs bill in Cincinnati last month, he made a point of noting that his tax increases would not kick in until 2013. "Nobody is talking about raising taxes right now," he said.

On Wednesday, White House press secretary Jay Carney said he was not familiar with details of the Senate Democratic plan and would not comment on the specific timing of the millionaire surtax. But he added that "if we have to make choices here, that this trade-off is an acceptable one whenever the revenue increases kick in because of the urgent need we face to address an economic problem."

Democratic leaders in Congress point to recent polls showing support for increasing taxes on the wealthy.

A Washington Post-ABC News released this week said 75 percent of respondents supported raising taxes on Americans with incomes over $1 million a year. That same poll found that 52 percent of respondents supported Obama's jobs package, and 36 percent opposed it.

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, recalled that previous proposals to raise taxes on millionaires had failed, with some Democrats joining Republicans in opposition.

"Some of my Democrat colleagues were right to reject a similar proposal when they controlled both chambers of Congress," Hatch said. "Given the weak state of our economy, they'd be wise to reject it again."

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This is just so NORMAL it makes me sick and both sides do it. But here it seems we are going to raise taxes to spend it of the NOBLE cause of hiring teachers and such...... SOUNDS so damn good, what great politics..... shit.

I'm with Bill (I think) on this. We have to rasie taxes BUT NOT to add service or people. PAY DOWN THE DEBT you dumb asses.

Let's see you make a milliion and they are going to take $50,000 MORE dollars from you - besides it's your FAIR SHARE forget that you pay the most already.

They sell the idea with taxing Warren Buffet but this tax is going to hit a lot S-corps.

Lord I hate them all...............

Kevin Keenan is my hero, a double FUP, he does so much with so little

[StreetScooby 5]

Well, that's certain to help it pass...

We are all engines of karma

[lawrocket 3]

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The tax on millionaires is expected to pay for the package, so it wouldn't add to the budget deficit.

Which is what is always said. But then it turns out that people will limit their incomes to $999,999.99 per year because they'll have $50k more than if they make $1 million.

Then the taxes don't come in as expected, the spending adds to the deficit because tax revenues aren't as expected, etc...

It always happens. It'll happen again, and the high earners will be blamed for avoiding taxes by earning less.

My wife is hotter than your wife.

[billvon 3,120]

>But then it turns out that people will limit their incomes to $999,999.99 per
>year because they'll have $50k more than if they make $1 million.

Some will. The people who make $20 million a year, however, will not give up 95% of their income. And once that person can make $1,050,000, they'll generally take it.

While you can make many arguments against this sort of tax, "it won't raise any money" is not one of them.

[lawrocket 3]

I agree. It won't stop all funding. But I am stating that revenues won't meet forecasts (they never do) and that outlays will exceed forecasts (they always do).

My wife is hotter than your wife.

[kelpdiver 2]

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The tax on millionaires is expected to pay for the package, so it wouldn't add to the budget deficit.

Which is what is always said. But then it turns out that people will limit their incomes to $999,999.99 per year because they'll have $50k more than if they make $1 million.

No, the article said 5% on income above 1 million. So there's a penny's difference there, or perhaps in the worst case, a dollar if it lead to rounding up.

Very rarely (ever?) do we see taxes that kick in at a threshold but not apply to marginal income only. However, many tax credits do apply so drastically, or over a narrow phase out range.

----
So the question this presents is:

Is Reid and the Senate Democrats acting against Obama in reneging on the no tax changes until 2013 deal made between the parties, or is this merely an act to shield Obama in his reelection campaign? Reid already got reelected, so he can be the bad guy.

And will the Democrats tactic of breaking the deal and making Republicans vote against firemen to prevent taxes - will it further damage the polarized Congress, or is it merely a symptom of how bad it is between the parties of late?

My thoughts - of course Obama is in on the plan and yes, these parties do hate each other that much and are unwilling to do the job necessary. Until we get a change away from a zero sum mentality, we're in for a tough stretch.

[billvon 3,120]

>But I am stating that revenues won't meet forecasts (they never do) and
>that outlays will exceed forecasts (they always do).

Likely true. But you can use that argument against anything.

"That spending-cut bill? Nonsense. Those bills never cut as much as they promise. It's a waste of time to pass any such bill."

[lawrocket 3]

Of course, had the tax increase been used to pay off the deficit we already have, I'd be a bit more supportive. But no, it's to pay for additional spending, thus ensuring that any additional revenues are not used to close the deficit...

My wife is hotter than your wife.

[kallend 2,150]

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The tax on millionaires is expected to pay for the package, so it wouldn't add to the budget deficit.

Which is what is always said. But then it turns out that people will limit their incomes to $999,999.99 per year because they'll have $50k more than if they make $1 million.

Doubt that. I expect it's marginal, not absolute.

...

The only sure way to survive a canopy collision is not to have one.

[mirage62 0]

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Of course, had the tax increase been used to pay off the deficit we already have, I'd be a bit more supportive. But no, it's to pay for additional spending, thus ensuring that any additional revenues are not used to close the deficit...

Bill, just wondering....are you willing to say that the money raised sb use to LOWER the deficit rather than be used to keep the deficit from going up?

I wondering because this seems as just a clear cut case of politics as usual.

Kevin Keenan is my hero, a double FUP, he does so much with so little

[headoverheels 334]

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Let's see you make a couple of million and they are going to take $50,000 MORE dollars from you

For your sake, I hope you do not do your own taxes. There, I fixed it for you.

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They sell the idea with taxing Warren Buffet but this tax is going to hit a lot S-corps

My S-corp never paid any Federal tax. It passed all income to the 3 owners, who paid tax on it as their ordinary income.

[billeisele 130]

Unfortunately politics as usual. Yes, more income is needed but spending cuts offer more opportunity.

I've spent (wasted ) 3 hours this week talking with so-called government subject matter experts helping them to understand basic concepts of federal contracting, simple math, and cost recovery. I still don't think they understood.

I could go on with dozens of examples of waste, incompetence, ignorance and simple stupidity. None of them could get a job in the real world making a salary close to what they are being paid.

It is simply amazing how incapable some federal employees are.

Give one city to the thugs so they can all live together. I vote for Chicago where they have strict gun laws.

[kallend 2,150]

Wasn't Democrates some old Greek philosoper dude?

...

The only sure way to survive a canopy collision is not to have one.

[mirage62 0]

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Let's see you make a couple of million and they are going to take $50,000 MORE dollars from you

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For your sake, I hope you do not do your own taxes. There, I fixed it for you.




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In Reply To
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They sell the idea with taxing Warren Buffet but this tax is going to hit a lot S-corps

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My S-corp never paid any Federal tax. It passed all income to the 3 owners, who paid tax on it as their ordinary income.

Sorry DID I MAKE A MISTAKE 5% of a million is $50,000....isn't it?

And am I wrong to understand that as I am pass that million directly I wouldn't have to pay the $50,000?

Seriously I could be all wrong. And as a matter of fact I don't do my taxes so perhaps I am wrong. Please clear it up to me

Kevin Keenan is my hero, a double FUP, he does so much with so little

[headoverheels 334]

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Sorry DID I MAKE A MISTAKE 5% of a million is $50,000....isn't it?

Doesn't apply to the first million, which is why you will not owe anything "new" if you only make one million, and "only" $50k new if you make 2 million.

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And am I wrong to understand that as I am pass that million directly I wouldn't have to pay the $50,000?

That is going to hit the individual, not "hit a lot of S-Corps." Perhaps you meant "hit the owners of a lot of S-Corps." See above for the fact that it will not apply at all for the 1st million. If you net $1.1 million income, you'll pay an extra $5k.

[mirage62 0]

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Doesn't apply to the first million, which is why you will not owe anything "new" if you only make one million, and "only" $50k new if you make 2 million

ROTFLOL let me get this straight. IF I make a million and one dollars I don't have to pay the $50,000? I believe you are wrong. At 2 million it wb $100,000K

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That is going to hit the individual, not "hit a lot of S-Corps." Perhaps you meant "hit the owners of a lot of S-Corps." See above for the fact that it will not apply at all for the 1st million. If you net $1.1 million income, you'll pay an extra $5k.

Many S-corp are single owners as in my case, btw I am an individual.

If I trusted that the tax would be used to lower the defict and not go to speeding - even if it was defict neutral - I would be much more supportive.

My post also was more about the politics of the whole move.

Kevin Keenan is my hero, a double FUP, he does so much with so little

[DiverMike 5]

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"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off,

This kind of annoys me. Those same teachers and firefighters have a much better pension plan than I do as a Sub S Corporation single shareholder. Why don't we get rid of their pension plans and make them fund their own 401K plan rather than make me pay more taxes?

For the same reason I jump off a perfectly good diving board.

[kallend 2,150]

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"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off,

This kind of annoys me. Those same teachers and firefighters have a much better pension plan than I do as a Sub S Corporation single shareholder. Why don't we get rid of their pension plans and make them fund their own 401K plan rather than make me pay more taxes?

How do you feel about corporate execs with their $multi-million golden handshakes after they are fired for messing up?

...

The only sure way to survive a canopy collision is not to have one.

[mirage62 0]

The same way I feel about tenure and college professors that have fantastic retirement plans….none which you have but maybe you get my point.

Kevin Keenan is my hero, a double FUP, he does so much with so little

[champu 1]

Two things...

When you're already in the red, any new spending, "adds to the budget deficit" whether it is accompanied by a tax increase or not.

Let's hope it's indexed to inflation this time...

[BoogeyMan 0]

This tax the rich thing is getting dumber by the day. The super wealthy are typically deeply invested in TAX FREE gov't bonds. They don't pay tax. The lower strata of wealthy, if taxed higher, will lower their overhead. Hiring cheaper foreign workers on a legal workers visa, etc. Less jobs for US workers.
The real answer is that government must cut spending.

[airdvr 210]

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"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off, rather than have millionaires and billionaires pay their fair share," said Sen. Chuck Schumer, D-N.Y. "Republicans will struggle to defend putting off repairs to crumbling schools in order to protect tax breaks for the wealthiest 1 percent of America. This is the contrast that will be on display in the Senate next week."

Once again the brain trusts in congress show their asses to the American public. We are so fucked as long as we allow this type of bullshit to continue. I don't know whether I'm for or against this proposal anymore, but I do know the motivation and the intent of the fuckwads in congress isn't 'what's good for the country' or 'what's the right thing to do'.

Please don't dent the planet.

Destinations by Roxanne

[DrewEckhardt 0]

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"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off, rather than have millionaires and billionaires pay their fair share," said Sen. Chuck Schumer, D-N.Y. "Republicans will struggle to defend putting off repairs to crumbling schools in order to protect tax breaks for the wealthiest 1 percent of America. This is the contrast that will be on display in the Senate next week."

There are three classes in this country

1. Those who pay to elect the government.
2. Those who pay for the government.
3. Those who barely matter.

It costs about $8.5M per term or $1,417,000 a year to land a US Senate seat paying $174,000 for a net pay of -$1,243,000 a year. It costs about $1.5M per term or $750,000 a year to become a US Representative with the same pay for a -$1,152,000 return on your investment. To make the arithmetic work Congress Critters pay for their election with hard-money contributions to their campaigns and soft money contributed to the party. Only .4% of Americans contribute over $200 to a candidate, with some candidates receiving the majority of their hard money from people donating the $2500 per individual/$5000 per couple legal maximum. That less than .4% and various companies + PACs pay to elect our government. The legislation which actually passes is mostly on behalf of this group.

America has the most progressive tax system out of the OECD 24. By 2008 the top 1% were paying 38% of federal income taxes, top 5% 59%, and top decile 70%. These people pay for the government. Government policies are structured to keep that money coming in, with things like state board certifications limiting mobility and downward price pressure on wages within the country and immigration controls keeping out foreign professionals who'd work for less money.

The bottom half pay 2.7% of federal income taxes with the average tax rate negative for the two bottom quintiles. These people pay for neither elections nor government and therefore barely matter. Government policies favor the top two groups at their expense, with things like porous borders keeping wages down.

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Once again the brain trusts in congress show their asses to the American public.

Teachers don't matter, most fire fighters don't matter, the American public doesn't, and as long as poverty comes with color television and cable TV that's not going to change.

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We are so fucked as long as we allow this type of bullshit to continue. I don't know whether I'm for or against this proposal anymore, but I do know the motivation and the intent of the fuckwads in congress isn't 'what's good for the country' or 'what's the right thing to do'.

The motivation and intent of the fuckwads in congress is to stay in Congress where they can exercise power. They do that by throwing bones to the people paying for their re-election campaigns.

[lawrocket 3]

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Doubt that. I expect it's marginal, not absolute.

You're likely correct. I'll do my best to retract my foot from my mouth.

My wife is hotter than your wife.

[lawrocket 3]

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"Republicans will be hard pressed to explain why they allowed teachers and firefighters to be laid off, rather than have millionaires and billionaires pay their fair share," said Sen. Chuck Schumer, D-N.Y. "Republicans will struggle to defend putting off repairs to crumbling schools in order to protect tax breaks for the wealthiest 1 percent of America.

I agree with you, airdivr.

This is exactly the standard line of argument. What happens when budget cuts come? Politicians look to cutting the following:
(1) Schools (especially teachers)
(2) Police; and
(3) Fire.

And which teachers? Do a google search for "'teacher of the year' and 'laid off.'" I got over 4 million hits. It's a political goldmine to lay of the best teachers. (It's also in union contracts that layoffs are based on seniority and not merit). Laying off teachers is a wonderful thing to do to get that funding increase you want.

Cut firemen? That's where we go along with policemen. Scare the people. increase the terror alert and create a perfect storm. It's awesome stuff.

Here's an explanation: "Teachers didn't used to get laid off when the states and local governments ran education. But since the federal government took over, the localities have little choice anymore. Bureaucrats in Washington decide who gets the money and who doesn't, and those bureaucrats are not laid off.

"Mooney for firemen? That's state and local. Money for police? State and local. We intend to free up the state and local forces to decide who gets hired and fired and who does not."

I like the "putting off repairs to crumbling schools." Hey, Schumer: those schools crumbled under your watch.

It's political posturing and puffery at its finest. It comes from the left and the right and red herring is a favorite dish!

My wife is hotter than your wife.