Editore"s Note
Tilting at Windmills

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February 18, 2009

BIGGEST. TAX CUT. EVER. (REDUX).... We talked a week ago about the tax-cut provisions of the economic stimulus package, and how it turns out that President Obama proposed and passed one of the largest tax cuts in American history -- $282 billion over two years -- without Republican support.

I'm glad to see some others are picking up on this. Yesterday, Marc Ambinder noted:

Don't know if anybody has yet noticed in the Republican Party but President Obama was presented last week a major talking point for 2012.

He'll sign today one of the largest tax cuts in history.

In spite of the White House pointing this out to journalists, it is funny how little remarked-upon this is.

It's hard imagine we won't hear about this four years from now. And if that's not boxing a future Republican candidate in ahead of time, I don't know what is.

Chris Hayes had a similar observation.

On the politics side of the ledger, Ben Smith notes Obama's emphasis on the tax cuts in the bill. I'm not necessarily a fan, though politically it's true that every single Republican member of congress can now be accused of "Voting against the biggest tax cut in history" come next election." Clearly, this hasn't escaped the White House's notice.

It's good to see this observation gaining some traction, but I'd just reiterate one angle to this that shouldn't be overlooked: Obama's tax-cut plan in the recovery package is not only arguably bigger than any previous plan, but it's also better targeted. George W. Bush's tax cuts were long-term income-tax rate cuts, which amounted to a generous break for those at the top, since the wealthy pay most income taxes. A.L. reminds us today, "The Bush tax cuts were skewed dramatically toward the wealthy. In 2004, 60% of the tax cuts went to the top 20 percent of income earners with over 25% going to the top 1% of income earners. Those numbers have increased since then as the cuts to the estate tax have taken effect."

Obama's tax cuts, meanwhile, are short-term refunds paid directly to working and middle class families (some of which Republicans have denounced as "welfare").

As such, GOP lawmakers have rejected one of the largest, if not the largest, tax cut ever proposed by a president -- which just so happens to be targeted at the working and middle class families Obama vowed to look out for.

Expect to hear this point again at some point in the future.

Steve Benen 5:00 PM Permalink | Trackbacks | Comments (31)

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Comments

The new Republican line is that tax breaks are welfare when a Democratic Congress does them?

Seriously, this is the most irresponsible party since the know-nothings.

Posted by: anonymiss on February 18, 2009 at 5:04 PM | PERMALINK

Of course they rejected it - it's change, and they're the Taliban.

Posted by: Cazart on February 18, 2009 at 5:05 PM | PERMALINK

Yeah, that's all well & good, but when can we set about the business of levying some tax *increases* on those beneficiaries of the Bush years? At the very least, it's time the previous administration's tax cuts expire. I understand gubmint could use a little cash right about now.

Posted by: junebug on February 18, 2009 at 5:05 PM | PERMALINK

"some of which Republicans have denounced as "welfare""

That's because they are. Refundable tax credits that are valued at an amount greater than amounts paid in income taxes are welfare. To the extent they reduce income taxes paid, I'm in favor of it, but I'm also in favor of reduced taxes for everyone. Yes they pay payroll taxes and medicare taxes, but those are specifically earmarked to fund specific programs. It's a nice trick Obama thinks he's pulled, but may the reason no one is talking about it is because they understand the reality of it. I'm not sure why we don't just give working and middle class families refundable tax credits to infinity. Everyone can be a millionaire!

Posted by: Brad on February 18, 2009 at 5:09 PM | PERMALINK

You're confused on how the GOP will spin this. We've seen this before.

The spin will be that the DEMS again voted for higher taxes. Since the GOP wanted even greater tax cuts, and the bill approved solely by the DEMS did cut taxes, but less than the GOP wanted, the DEMS therefore voted for higher taxes.

Posted by: PRESSmUP on February 18, 2009 at 5:22 PM | PERMALINK

"As such, GOP lawmakers have rejected one of the largest, if not the largest, tax cut ever proposed by a president -"

OMG that means the republicans not only voted AGAINST THE LARGEST TAX CUT, but, they, they ,they, VOTED TO RAISE TAXES - because by their reasoning, anytime you vote against a tax cut , you're voting to raise taxes. Oh boy, I can see the ads now.

Posted by: James G on February 18, 2009 at 5:23 PM | PERMALINK

Brad, Wow! Thanks for the great heads-up!

Please post the excerpts from the stimulus tax provisions about exactly how much "refundable tax credits" are above average income tax received. From the actual legislation or from a credible tax analysis foundation. No second hand info please.

Once I get that, I can't wait to rub it in all my democratic welfare friend's faces!

I'll just be over here holding my breath.

Posted by: palinoscopy on February 18, 2009 at 5:25 PM | PERMALINK

I'm not sure why we don't just give working and middle class families refundable tax credits to infinity

Because that doesn't make things better. A small dose is medicine, a large dose is poison. And your "earmarked" distinction is a useless word game. Right now, lots of that earmarked money is being loaned, at low interest, to the general fund, reducing taxes and/or the deficit. In addition, often a large chunk of "taxes" go to earmarked program spending (for instance, if you pay income taxes in California, much of that money is directed in a non-discretionary way). Sometimes a percentage of the sales tax is earmarked. Most people figure, if you send the money to the government, it is a tax.

Posted by: dr2chase on February 18, 2009 at 5:31 PM | PERMALINK

"Yes they pay payroll taxes and medicare taxes, but those are specifically earmarked to fund specific programs."

More BALONEY from the right. Payroll taxes are not earmarked to fund specific programs anymore that Income taxes are. Anyone who receives a regular paycheck pays payroll taxes, and they are deducted form their check. Income tax is what the 'investor class' (deadbeats who want a free ride) pays because they don't normally draw a regular paycheck. But the right has a problem when ordinary people get a tax break.

Posted by: James G on February 18, 2009 at 5:35 PM | PERMALINK

And what did I just write earlier this afternoon?:

Or how about hitting them on what's supposed to be their strength, taxes. After all, the stimulus bill was the largest tax cut in history, and we know from the GOP that if you oppose a tax cut you are in effect raising taxes. So try this ad:

"President Obama and his Democratic allies in Congress just passed the single largest tax cut in American history. Unfortunately, every single Republican Congressman -- including [insert local Rep's name here] voted against that tax cut. Call [local Republican congressman] and ask him why he voted to raise your taxes in the middle of a recession."

Posted by: Stefan on February 18, 2009 at 4:18 PM | PERMALINK

Posted by: Stefan on February 18, 2009 at 5:50 PM | PERMALINK

And what did I just write earlier this afternoon?:

You just like seeing your name twice in one post.

Posted by: shortstop on February 18, 2009 at 5:56 PM | PERMALINK

Income tax is what the 'investor class' (deadbeats who want a free ride) pays because they don't normally draw a regular paycheck.

Ahem... as someone who's scrambling to get his yearly receipts in order, I resent that. I'll freely cop to being a deadbeat, but don't you dare refer to me as the investor class. Them's fightin' words.

Posted by: junebug on February 18, 2009 at 5:59 PM | PERMALINK

Republicans voted for the largest tax increasse in history! Yay!

Posted by: goethean on February 18, 2009 at 6:11 PM | PERMALINK

To the extent they reduce income taxes paid, I'm in favor of it, but I'm also in favor of reduced taxes for everyone.

I'm also in favor of ponies and ice cream for everyone. But if you favor reduced taxes, then presumably then you're also in favor of reduced services for everyone. So what would you cut? What do people have too much of? Be specific.

Posted by: Stefan on February 18, 2009 at 6:12 PM | PERMALINK

don't you dare refer to me as the investor class

Come now. What about those Hummel figurines you can't get enough of?

Posted by: shortstop on February 18, 2009 at 6:12 PM | PERMALINK

Expect to hear this point again at some point in the future.

Every hour on the hour, 24/7/365 would be nice. If I can get the sound system hooked up, I'll play it for the Obama-hating Limbaugh Hugger neander-con across the lane.

Reveille is still at 5 AM, isn't it?

Posted by: Steve W. on February 18, 2009 at 6:38 PM | PERMALINK

The nerve... as if you could put a figure on my Hummel collection. On the other hand, I'm open to offers on my Beanie Babies. Daddy needs Powerball tickets.

Posted by: junebug on February 18, 2009 at 6:40 PM | PERMALINK

Yes they pay payroll taxes and medicare taxes, but those are specifically earmarked to fund specific programs. -- Brad, @17:09

You're in one of those states where there's no sales tax? Lucky you. Ditto if you pay no property tax. Oh, and payroll taxes aren't "earmarked", as in "pegged to fund specific programs".

Vis income tax...
I disagree with James G, @17:35 statement:
"Income tax is what the 'investor class' (deadbeats who want a free ride) pays because they don't normally draw a regular paycheck."

We (that is my husband and I) pay income tax, even though he's now retired, after spending 45yrs in the workforce. What we've not been paying for the past couple of years are capital gains taxes on our carefully invested savings; there haven't been enough gains to pay the taxes on.

To everyone who's frothing at the mouth about people who're not paying income taxes but are still getting a leg up via the stimulus... What does it say about our rich country, that so many people are working themselves to death -- holding two, three jobs -- and STILL do not make enough to have to pay income tax?

Posted by: exlibra on February 18, 2009 at 6:53 PM | PERMALINK

Yeah, nice try. Rought times head to... weak attempts to make a point. I cannot wait for my $13 a week. This tax cut, of which something like MOST OF IT is payments to folks who don't pay taxes is not quite "all that". A bit disappointing.

It also happens to be some of the biggest spending in history. Grasping at straws, aren't ya?

Posted by: still-trying on February 18, 2009 at 6:57 PM | PERMALINK
That's because they are. Refundable tax credits that are valued at an amount greater than amounts paid in income taxes are welfare.

Wrong. Refundable tax credits that are valued at an amount greater than the eligible person paid in all federal taxes might be validly be called "welfare" (not that "welfare" is a bad thing), but as long as the taxpayer is still paying a non-negative total federal tax burden, irrespective of what kind of taxes are paid, a refundable credit cannot fairly be described as welfare.

Posted by: cmdicely on February 18, 2009 at 7:05 PM | PERMALINK
Yes they pay payroll taxes and medicare taxes, but those are specifically earmarked to fund specific programs.

(1) payroll taxes include social security and medicare taxes, and
(2) payroll taxes, in fact, pay current general fund obligations; the idea that they do not is an accounting fiction not reality.
(3) Payroll taxes and income taxes aren't the sum total of federal taxes.

Posted by: cmdicely on February 18, 2009 at 7:14 PM | PERMALINK

Refundable tax credits that are valued at an amount greater than amounts paid in income taxes are welfare. To the extent they reduce income taxes paid, I'm in favor of it, but I'm also in favor of reduced taxes for everyone. Yes they pay payroll taxes and medicare taxes, but those are specifically earmarked to fund specific programs.

Yeah, that's a winning strategy -- tell everyone making less than $100,000 a year that they're welfare leeches because payroll taxes aren't "real" taxes.

Good luck with that one.

Posted by: Mnemosyne on February 18, 2009 at 7:16 PM | PERMALINK

I cannot wait for my $13 a week.

You're not paying attention: that's not your $13 a week. Didn't you read what Brad said? That's a welfare payment straight from the government and it doesn't really belong to you even though you paid it in.

If that $13 came from payroll taxes and not income tax, it's welfare. You're a welfare queen just like all the rest of us working saps.

Posted by: Mnemosyne on February 18, 2009 at 7:20 PM | PERMALINK

Obama's tax cuts, meanwhile, are short-term refunds paid directly to working and middle class families (some of which Republicans have denounced as "welfare").

Tax cuts to people who don't pay taxes are not "cuts." You acknowledge that yourselves. What the Republicans proposed was a temporary suspension of FICA which would affect these working families.

Posted by: Mike K on February 18, 2009 at 9:44 PM | PERMALINK

Just so the safety net is there for the poor, disabled and disaffected--those at length neglected by Bush and Cheney. I admire President Obama for addressing these need areas, and --as a person laboring in the social welfare/recovery initiatives area--shame on Bush and Cheney for the last eight years of feeding the already rich

Posted by: consider wisely on February 18, 2009 at 9:49 PM | PERMALINK

I love Chris Hayes, who appears on Countdown with Keith Olbermann.
So insightful and thoughtful.
Never an insipid moment. What a wonderful person in a mediocre world.

Posted by: consider wisely on February 18, 2009 at 9:54 PM | PERMALINK

Tax cuts to people who don't pay taxes are not "cuts."

So you must make over $100,000 a year, right? Otherwise, like the rest of us, you're not a real taxpayer. Better make sure you send that welfare check back to the government when you get it after doing your tax return.

Posted by: Mnemosyne on February 18, 2009 at 11:29 PM | PERMALINK

Mike K wrote: What the Republicans proposed was a temporary suspension of FICA

Yeah, Republicans couldn't convince the American people to abolish Social Security, so they try to de-fund it by the back door? No thanks.

I support the terms of the original arrangment between Saint Reagan and Super Wizard Alan Greenspan: Now that the boomers are retiring, raise the capital gains and upper-bracket income taxes to make up for any shortfalls, especially since Bush transferred the surplus caused by the FICA tax increase to the wealthy already.

Posted by: Gregory on February 19, 2009 at 7:50 AM | PERMALINK

If you pay $15,000.00 a year in federal tax (income or payroll), and are given a refund of $15,500.00, then you have taken $500.00 of welfare money. It wasn't yours to begin with, and it shouldn't be yours at the end of the year. This is the "Tax Cut" that the Stimulus plan has created. That's all there is to it.

Posted by: WFIGUY on February 19, 2009 at 7:55 AM | PERMALINK

....and, of course, Mike K repeats the zombie Republican lie that the recipients of the credit do not pay taxes.

Liar.

Posted by: Gregory on February 19, 2009 at 7:57 AM | PERMALINK

WFIGUY: ?????

Posted by: confused on February 19, 2009 at 1:41 PM | PERMALINK




 

 

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