Jobs Report Means Bush Tax Cuts For The Rich Must Be Extende
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Interesting report- does it make sense?
Republicans Claim Lousy Jobs Report Means Bush Tax Cuts For The Rich Must Be Extended
Today’s jobs report from the Bureau of Labor Statistics paints an ugly picture of lackluster job creation and increasing long-term unemployment. The Federal Reserve — which is taking its own steps to boost employment after dithering for months — has been reduced to pleading with Congress for further fiscal stimulus, in the hopes of averting an even longer jobs slog.
So, naturally, Congress is spending the day debating whether or not the richest two percent of Americans should receive a tax cut (in addition to the tax cut they will receive on their first $250,000 in income if, as everyone in Congress wants, tax rates are extended for the lower- and middle-classes). In fact, many House Republicans are claiming that the richest two percent of Americans desperately need a tax cut because of the bad jobs report:
House Minority Leader John Boehner (R-OH): Any sign of job growth in this struggling economy is encouraging, but clearly no match for the uncertainty families and small businesses are facing, which is why we must cut spending and stop all the looming tax hikes.
House Minority Whip Eric Cantor (R-VA): Today’s jobs report marks the 19th consecutive month in which unemployment has exceeded nine percent — an unacceptable result. We must do everything possible to bring that number down and get people back to work by ending the uncertainty that is plaguing the private sector. To start, Congress should reassure job creators and investors by taking the impending tax hikes off the table.
Rep. Mike Pence (R-IN): Today’s heartbreaking unemployment report should be yet another wake-up call to Democrats that raising taxes in the middle of the worst economy in 25 years is a mistake. Higher taxes on America’s small businesses won’t get anyone hired. I call on Washington Democrats to abandon their plan to raise taxes on small businesses and get America back to work.
Rep. Tom Price (R-GA): Nationwide, the unemployment rate has stayed at 9.4 percent or higher for 19 straight months. Yet instead of sensible policies to encourage private sector job creation, Democrats have pushed one job-killing idea after another…Well, higher taxes don’t hire Americans.
As The Wonk Room noted, there was no attempt on the part of these Republicans to grapple with the fact that the Bush tax cuts ushered in the weakest period of job growth in the post-war period, or that the Congressional Budget Office ranks extending the Bush tax cuts as the least effective tax measure for promoting economic growth.
http://thinkprogress.org/2010/12/03/jobs-tax-cuts/
Republicans Claim Lousy Jobs Report Means Bush Tax Cuts For The Rich Must Be Extended
Today’s jobs report from the Bureau of Labor Statistics paints an ugly picture of lackluster job creation and increasing long-term unemployment. The Federal Reserve — which is taking its own steps to boost employment after dithering for months — has been reduced to pleading with Congress for further fiscal stimulus, in the hopes of averting an even longer jobs slog.
So, naturally, Congress is spending the day debating whether or not the richest two percent of Americans should receive a tax cut (in addition to the tax cut they will receive on their first $250,000 in income if, as everyone in Congress wants, tax rates are extended for the lower- and middle-classes). In fact, many House Republicans are claiming that the richest two percent of Americans desperately need a tax cut because of the bad jobs report:
House Minority Leader John Boehner (R-OH): Any sign of job growth in this struggling economy is encouraging, but clearly no match for the uncertainty families and small businesses are facing, which is why we must cut spending and stop all the looming tax hikes.
House Minority Whip Eric Cantor (R-VA): Today’s jobs report marks the 19th consecutive month in which unemployment has exceeded nine percent — an unacceptable result. We must do everything possible to bring that number down and get people back to work by ending the uncertainty that is plaguing the private sector. To start, Congress should reassure job creators and investors by taking the impending tax hikes off the table.
Rep. Mike Pence (R-IN): Today’s heartbreaking unemployment report should be yet another wake-up call to Democrats that raising taxes in the middle of the worst economy in 25 years is a mistake. Higher taxes on America’s small businesses won’t get anyone hired. I call on Washington Democrats to abandon their plan to raise taxes on small businesses and get America back to work.
Rep. Tom Price (R-GA): Nationwide, the unemployment rate has stayed at 9.4 percent or higher for 19 straight months. Yet instead of sensible policies to encourage private sector job creation, Democrats have pushed one job-killing idea after another…Well, higher taxes don’t hire Americans.
As The Wonk Room noted, there was no attempt on the part of these Republicans to grapple with the fact that the Bush tax cuts ushered in the weakest period of job growth in the post-war period, or that the Congressional Budget Office ranks extending the Bush tax cuts as the least effective tax measure for promoting economic growth.
http://thinkprogress.org/2010/12/03/jobs-tax-cuts/
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Comments
Weak.
they did not create jobs with these cuts this whole time. they bought big ticket items or invested it in this weak ass stock market and lost most of it.
in fact when taxes were higher they created MORE jobs and did more hiring because hiring and paying salaries and benefits to an employee is a TAX WRITE OFF FOR THE EMPLOYER...
do not believe the lies that the republicans are spouting off about this issue...
"Well, you tell him that I don't talk to suckas."
Why isn't this understood? I know it's a complicated issue, but it's not like these people are being taxed to death- It's not like they're not getting kick backs in other areas-
I just hate how the GOP is so one sided on the issue and unwilling to make a sacrifice/negotiate the issue....
"Well, you tell him that I don't talk to suckas."
same as if those that appear to care actually show up.......
"Well, you tell him that I don't talk to suckas."
you have the mega valliant suggestion that will not work in the real world.
communism will not work in theface of severe ecomomic strife.......
i'm tired of offering suggestiions with no backing....
you can offer all you want.
nothing will ever change,
why not offer more chomsky
and have some others support it
with no change at all...
"Well, you tell him that I don't talk to suckas."
how can you be tired of "offering suggestions" when you've yet to offer a suggestion?
"Well, you tell him that I don't talk to suckas."
or better, come up with your own solution. still waiting for that.
"Well, you tell him that I don't talk to suckas."
Why does it matter when they came into being?
It's all just politics as usual. I support tax cuts for anyone and everyone.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
This is hilarious! People don't try to make their income from tax write-offs.
This is the same kind of misguided logic that drives people to keep a house payment because they don't want to lose the tax break. It's hard to believe people would think that makes sense, but that's the kind of world we live in - the kind where many people can't plan and do for themselves.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
The problem there is the more you cut taxes, the less money there will be to pay for infrastructure - unless you want privatized roads, police force, firefighters, etc. "I'll cut taxes" is a great buzz phrase to help you win an election, but I don't think in actuality it's that simple. A tax cut is one of the reasons Louisiana is in the shitter right now, and the governor is refusing to even entertain the idea of reinstating it - even though there is now a growing number of people actually asking for the tax to be reinstated.
actually, it does make sense to have a mortgage with deductible interest payments if you can get a better return on your money elsewhere. if you have a mortgage with a 4.5% interest rate and can deduct interest payments, your effective interest rate is actually closer to 2-3%. If you can earn more money investing in equities or other investments, then it makes sense to invest in that and continue paying the mortgage and getting the deduction.
sweet adeline, CFP®
I don't think so. If you can earn better interest for your money somewhere, wouldn't you rather take the payments that you're PAYING interest on and put it to somewhere that's EARNING that better interest?
If you have the cash to pay off the house, you should do it.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
We have a lot of fat the government can trim off before it would need to cut into infrastructure. Of course, our terrible politicians and government would likely cut infrastructure and leave the fat.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
I disagree. Do you realize how enormously bloated the federal government is? It boggles the mind. There are SO many places where the government could cut corners before having to dig into essential programs funding.
A little fiscal responsibility is all that's needed...well, revising the tax code wouldn't hurt either.
i'm not sure we're talking about the same thing, maybe we are.
what i'm saying is, if you have a $500k mortgage with a 4.5% interest rate, a job, an income stream, and say, $500k in the bank. so, theoretically, if you wanted to, you could pay off the loan on the house.
what i'm saying is you are better off paying the mortgage payments and sticking the $500k that you have in the bank in an investment that is paying you a higher rate of return. the effective interest rate on a 4.5% mortgage is really closer to 2-3%, so what i'm saying is you can get a higher rate of return than 2-3% on your $500k that you have in the bank, you should do that and NOT pay off the mortgage. it's a cost of money question and a cost of money question. i could show you the math if you want, but this is what i do for a living and the mortgage tax credit is a benefit for most people who want to purchase a home.
purchasing a home is an investment and if the cost of that investment is only 2-3% and you can take the lump sum that you would otherwise use to payoff the home and earn a better rate of return in another investment, than you are better off paying the mortgage and using the cash to earn a higher return.
You (and Electric_Delta who also posted something similar) may be right - I honestly don't know a hell of a lot about the specific details of the U.S. budgets. It just doesn't make much sense to me, as an outsider, to listen to Republicans say they'll cut taxes and balance the budget, without providing any further details - as if cutting taxes (and reducing the government's income) will somehow lead to more money without any other factors being added in.
As for governmental fat that can be trimmed - like I said, I'm not an expert on the intricacies of the U.S. governmental spending, but you're probably right. Whether or not the amount of fiscal waste is large enough to balance a budget or lead to a surplus if it's trimmed I have no idea, but I suspect there's a shitload of money being wasted, and it's being wasted with equal efficiency by both sides of the aisle. For all of the talk from some people on here about how they'd eliminate entire government departments to save money if they were in charge (which I argued in another thread will never happen), I'd be happy if they simply started by eliminating pork and pet projects (which will probably also never happen).
You're right, Cajun. If they cut pork projects, they would upset their biggest contributors.
A vicious cycle, to be sure.
But that 2-3% you're talking about is interest that you're PAYING and not interest that you're EARNING. If you paid off the house, you could stop PAYING interest immediately and start EARNING it by using the money you would to make house payments to invest in something else.
If you took 30 years to pay it off at 2.5% interest, you're ultimately going to spend over $200K in interest. Wherever your money is, it's going to have to overcome that deficit before it makes sense to not pay off the house.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
true, the payments you are making do charge interest, however, the money you'd make on your $500k presents a bigger opportunity. i'll do the math for you:
option 1, carry a mortgage
mortgage = $500k
interest rate = 4.5%
term = 30 years
monthly payment = $2,533
total principle paid = $500,000
total interest paid = $412,033 (a portion of which is deductible each year)
total = $912,033
option 2, invest the $500k in stock market
present value of lump sum = $500k
investment return = 8%
term = 30 years
future value = $5,031,328
option 3, save the $2,533 each month instead of paying mortgage
savings = $2,533
return = 8%
term = 30 years
future value = $3,775,080
THINGS TO NOTE:
-the interest you pay in option 1 is deductible each year. in year 1, the deductible interest is ~$22k, which means you get to reduce your taxable income by $22k, which depending on your marginal tax bracket, could be significant.
-you have to live somewhere, so if you aren't paying a mortgage, you are paying rent (or living in your parents basement), so the money is going out regardless, may as well be going toward buying something and getting the tax deduction.
-at the end of 30 years of paying on a mortgage, your $500k home that you now own outright with have grown to ~$2.8m in value (real estate has historically appreciated at 6% annually). so you'll own a $2.8m home and have over $5m in cash in the investment account.
i may not have convinced you, but to me, it's a no-brainer.
excellent post
That said, it is currently 5 degrees outside :shock: I think I may have suffered a head injury while surfing in San Diego . . .
If tax cuts for the rich mean more jobs will be created...
And the tax cuts that are in place currently have been there since 2003...
Then where are the jobs?
By the reasoning of those on the right, extending the tax cuts to the top 2% will lead to more jobs being created. Except, the top 2% have been enjoying those tax cuts for seven years now, and unemployment is roughly 9%. If tax cuts for the rich really do lead to job creation, then shouldn't there already be more than one job for every four unemployed Americans?
You can't use common sense, logic, and facts... That simply isn't supported here.
If the plan is to take more from the rich and continue spending at the current rate, guess who pays up the next time around ...