Thank Goodness the Adults Are In Charge

And this time I really mean it:

GOP leaders — led by John Boehner and Eric Cantor — have spent days bashing the economic stimulus package being touted by President Obama and Democrats because it doesn’t sufficiently cut taxes.

But is it possible that the alternative plan House Republicans unveiled as a more responsible approach earlier this week would have actually raised taxes for untold numbers of Americans?

That’s the surprising claim that House Democratic staffers who have taken a look at the GOP plan are now making. They insist to me that the Republicans did some almost comic number shuffling in drawing up their proposal, the upshot of which would be that the actual tax bill would go up for many.

I understand the psychological need for the Republicans to feel relevant, and I understand their opposition to spending, but really, we would be so much better off if the Republicans just took a little breather, got themselves pulled together and composed, and stopped being the crazy uncle at the holiday dinner ranting insanely about everything. These guys need to get their act together and figure out that the “loyal” in loyal opposition is fealty to the country first, and not the party.

48 replies
  1. 1
    DonkeyKong says:

    These guys need to get their act together and figure out that the “loyal” in loyal opposition is fealty to the country first, and not the party.

    What’s the weather report in hell?

  2. 2
    Rachel says:

    "These guys need to get their act together and figure out that the “loyal” in loyal opposition is fealty to the country first, and not the party."

    I remember reading about the Bush White House in the early years and how staffers would run around talking about "The Party" like they were Communist apparatchiks. They never did put country first.

  3. 3
    Nicole says:

    I read the article, and as best I can tell, taxes wouldn’t exactly go up, but a lot of people would end up paying the AMT instead of their lowered taxes, so it’s not that their taxes would go up; it’s that they would end up not getting the benefit of the cut.

    As someone who got smacked by it last year (I can still hear our accountant: "Welcome to the middle class!"), though, the AMT does suck and I can’t figure out why the middle class hasn’t taken to Congress with pitchforks in one hand and lattes in the other to demand they finally index the damn thing to inflation, or whatever it is that needs to be done to fix it. Seeing as how it hasn’t exactly worked as it was intended to, anyway.

  4. 4
    John Cole says:

    I honestly have no idea how the AMT works. None.

  5. 5

    These guys need to get their act together and figure out that the “loyal” in loyal opposition is fealty to the country first, and not the party.

    I’m thinking that’s going to take a while.

  6. 6
    Brian J says:

    I just heard David Brooks on "The NewsHour" bashing what was in the stimulus because it was either wasteful or would be put together too quickly thus making it wasteful. He claimed a lot of Republicans wanted to vote for a stimulus, but wouldn’t vote for one that was as poorly designed as this one.

    Leaving aside any valid points he may have about the timing of certain items in the package, I don’t think his comments about the Republicans wanting to vote for a package pass the laugh test. How in the world can they want to vote for a package but then fail to contribute anything substantive to the debate when the president all but rolls out a carpet asking for their cooperation, and then fail to deliver a single goddamn vote in the House?

  7. 7
    Joshua says:

    As someone who got smacked by it last year (I can still hear our accountant: "Welcome to the middle class!"), though, the AMT does suck and I can’t figure out why the middle class hasn’t taken to Congress with pitchforks in one hand and lattes in the other to demand they finally index the damn thing to inflation, or whatever it is that needs to be done to fix it.

    Because:

    1. Congress "fixes" it every year, and gets a few brownie points for "taking care of it".
    2. Every tax projection put out by the government assumes the AMT in the future. Yes everyone making the projection knows the AMT will be fixed every year and it will cost a few billion but that doesn’t matter. Removing the AMT for good would mean that the tax projections would be lower/scarier.

    In any case could you imagine a tax bill "inching upwards" to eventually engulfed the rich? That thing wouldn’t last a single year on the books.

  8. 8

    Ill be honest I am nobody’s economist but this looks pretty straight forward

    the GOP plan, which would reduce income taxes across the board, would as a result shove millions over on to the Alternative Income Tax rate, which would be higher for them. Dem Ways and Means spokesperson Matthew Beck emails me this statement making the case:

    In 2008, 4.2 million Americans had to pay the Alternative Minimum Tax (AMT). The Republican proposal would lower marginal tax rates for individuals, but would not reduce AMT rates. Current law requires you to pay the greater of the two rates, so many of those receiving this lower marginal rate would now be held liable for the AMT.

    There is no question that Congress needs to — and will — act to prevent the number of taxpayers hit by the AMT from growing to an estimated 26 million this year. However, we confirmed with the non-partisan Joint Committee on Taxation that 26 million people would still be forced to pay the AMT this year under the GOP bill. Essentially, their tax bill would give with one hand and take away with the other, leaving 26 million families without the tax cut they promised in their bill.

    From my reading that means that because the rule says you have the pay the higher of the two when it comes to Income Tax versus the AMT. And while the Rethug plan lowers marginal rates it doesn’t lower AMT rates and since you have to pay the which ever one is bigger you are gonna have to end up paying the AMT. And evidently from the last paragraph more people are going to be hit with the AMT which would be, I gather, a tax increase any way unless nothing is done to stop it.

    Now I am not saying the Dems are right, hell who knows but the thing I like about Sargent is he tends to write in away thats easy for regular folks to process.

  9. 9

    I’m thinking that’s going to take a while.

    And a brain transplant for a few of our fine feathered GOP friends …

  10. 10
    jenniebee says:

    Did you know that Eric Cantor‘s wife Diana works for one of the banks that got a chunk of change in the bailout?

    The Treasury Department used $267 million of taxpayer funds to buy preferred stock in a private banking company that employs Cantor’s wife.

    The bailout for New York Private Bank and Trust (NYPBT) [2] came earlier this month as part of a Treasury Department program to boost "healthy banks" with extra capital. NYPBT is the holding company for Emigrant Bank [3], a savings bank with 35 branches in and around New York City. Diana Cantor runs the Virginia branch of Emigrant’s wealth-management division, called Virginia Private Bank & Trust, which targets an ultra-rich clientele.

    That’s the man of the common people from Virginia’s 7th district.

  11. 11
    Nicole says:

    Re: John’s comment (and I’m no economist either, so I may have this all wrong, but it’s how I understand it)

    At its most basic, the AMT sets a minimum amount of tax due, and if you make above the threshold where it kicks in, when it’s tax time the amount of tax you owe under the regular system is calculated and then it’s compared to the AMT amount, and you pay whichever is higher. The AMT was created in the 1960’s to insure that a handful of super-wealthy families who were paying no, as in zero, income tax (thanks to exemptions, loopholes, blah blah blah) actually had to pony up and participate in financing our great nation. Problem was, it was never indexed to inflation and so now, decades later, millions of middle class people are getting nailed by it because what was considered a cruise ship of cash in the ’60s is more like a canoe now. NYTimes did a great piece on it a few years ago- I’ll see if I can find the link.

  12. 12

    Well, if the House Democratic staffers made this claim, it must be true. This whole debate, on both sides of the aisle, is idiocy. The reality of the world is pretty simple:

    1. Labor in the world market is worth somewhere between one and three dollars per day.
    2. Profit increases when American labor has to compete with world labor. This is called supply and demand.
    3. When profit increases, wealth gets concentrated.
    4. The reason jobs are disappearing is because they are moving to places with cheap labor.

    Now, enlightened with these deep truths, we can approach a sane policy position, which is, in fact, nothing new. Tariffs have been at 30-40% throughout the history of the United States, up until recently. These tariffs are now essentially zero. So one more list. Tariffs would:

    1. Decrease the supply of labor, raising Middle Class wages, and spreading wealth.
    2. Bring back jobs, raising Middle Class wages, and spreading wealth.
    3. Provide a source of government funding, paying down the deficit.

  13. 13
    Joshua Norton says:

    As the house republicans become less and less relevant (and soon to be gone) the dumber and more tone deaf they seem to get. It seems that they’re suddenly having death bed conversions back to being "fiscally conservative" .

    Eric Cantor and his sun-tan-lotion advocate sidekick John Boner, as leaders of the Limbaugh party, scream and wave their arms in absolute ‘sky-is-falling’ delusion, they seem to discount the fact that REPUBLICANS led the charges with Reagan and Chimpy to get us into this financial quagmire and expand the FEDERAL DEBT to over $10 TRILLION dollars. And gave away the surplus that Chimp inherited.

    Short memory – apparently even shorter on brain cells.

  14. 14
    Zifnab says:

    @John Cole:

    I honestly have no idea how the AMT works. None.

    It’s a very complicated way of phasing out deductions and credits so that a guy making a million dollars a year can’t easily shelter his income behind mortgages and business deductions and church donations.

    You had people back in the late 80s and early 90s making seven or eight figures and paying virtually nothing back to the IRS because of how they took advantage of various credits and deductions. The AMT is just one giant plug for the myriad tax loopholes.

  15. 15

    I honestly have no idea how the AMT works. None.

    Once you make it up into that bracket, they have invented a whole new way to fuck you over.

    The AMT was created to force extremely wealthy taxpayers to pay income tax by limiting their credits and deductions. The AMT forces these families to exclude several credits and deductions, particularly those for state and local taxes, when calculating their tax liability. As a consequence, the families most at risk of being forced to pay the AMT live in wealthier, high-tax states, such as the New England states, New York, New Jersey, and California.

  16. 16
    Doug says:

    It is nice to remind us that there ought to be a national interest. I think it is shocking how narrow the constituency of some Republican politicians has become, but it seems to still work for them and also get them elected and to the national stage.

    The details do not seem to matter. If they did, we would have seen some fragmentation of the Republican block, but the AMT is directed at ensuring that people pay a certain minimum percentage in income tax and do not get to use deductions and lower rates for certain types of income to lower the tax they pay as a percentage of their total income below some minimum percentage level. It was written to only affect very high income folks, but because of inflation, and because the kick in points for the AMT were not written to be indexed for inflation, it now affects many more people.

  17. 17
    Nicole says:

    Aha! Found the link.

    The Untaxed Rich, Found and Then Lost

    For us, the worst of last year was, we got pushed into the AMT because my husband did an out-of-town job where the company housed him, and then when tax time came, listed his housing as income on his W2. So it’s not like we even actually made any additional money that year- we’d actually brought home less than the year before.

  18. 18

    we would be so much better off if the Republicans just took a little breather, got themselves pulled together and composed, and stopped being the crazy uncle at the holiday dinner ranting insanely about everything.

    B.O.B. is your uncle?

    Snark aside, the GOP can take a running swan dive into a pit of burning nails. They’ve reduced themselves to the rebound boyfriend of American politics. I know a having a single party in charge of everything doesn’t work, even when I like the party in charge. However, that isn’t a reason to keep the ReThugs around, especially when they’re incapable of taking charge of their own bowel functions. I look forward to the day when they’re gone and one or more fully functional parties can move into the void.

  19. 19
    Zifnab says:

    It was written to only affect very high income folks, but because of inflation, and because the kick in points for the AMT were not written to be indexed for inflation, it now affects many more people.

    Of course, the people it affects are still in the highest income brackets. I think you have to be earning a quarter-million $175,000 or more a year to even think twice about this kind of credit. The 26 million people predicted suffer the tax hike from 2008 probably A) still have their jobs and B) made more than you did in any given five or six two or three previous years. So it’s REALLY hard to feel sorry when you’ve got another 80,000 jobs slip down the shitter again this week.

    Re: Correction.

  20. 20
    calipygian says:

    They aren’t through being the crazy uncle at the table just yet. Just an hour ago, Starbursts Lowry reported that the GOP just wants to "pinch themselves" because they are all against a stimulus bill that a vast majority of the electorate wants passed.

    Just talked to a GOP senate aide. His guess is that Democrats in the Senate will allow a few amendments at the margins of the stimulus bill and maybe even accept a few. But it will be largely the same bill as in the House. He estimates it will get just north of 60 votes. Then, it will go to conference and some more sweeteners will be added before it passes on largely party-line votes in both houses. He can’t believe how well the debate has been going for Republicans ("I want to pinch myself").

    Delusional. Crazy-uncle-ranting-about-Socialism-at-Thanksgiving crazy.

    You haven’t erased that peak wingnut post yet, right?

  21. 21

    This is some kind of AWESOME, I don’t care if they are making them take it down.

  22. 22
    Tsulagi says:

    These guys need to get their act together and figure out that the “loyal” in loyal opposition is fealty to the country first, and not the party.

    Yeah, right, that’ll happen any day now. They’re too busy buying balls or looking for U.S. embassies in Iowa sneaky AQ terrorists may enter to get citizenship. The long range GOP forecast is for continued stupid with occasional winds blowing hard.

  23. 23
    lysias says:

    An e-mailer to Cafferty on CNN called them the Limbaugh Party. I’d say the shoe fits.

  24. 24
    Apsalar says:

    Of course, the people it affects are still in the highest income brackets. I think you have to be earning a quarter-million $175,000 or more a year to even think twice about this kind of credit. The 26 million people predicted suffer the tax hike from 2008 probably A) still have their jobs and B) made more than you did in any given five or six two or three previous years. So it’s REALLY hard to feel sorry when you’ve got another 80,000 jobs slip down the shitter again this week.

    All true, but the solution to this isn’t to keep the AMT and pretend that it’s still a "no loopholes for you" tax on the rich, but just to raise the damn marginal tax rates and put the AMT minimums back to where they were intended to be. The problem is when the AMT hits people who didn’t have to pay it before, or where it shifts in and out depending on small changes in income levels (or what is reported as income), and it becomes hard to plan household finances based around what deductions you will or won’t get. If you don’t have to worry about the AMT, and you just know that whatever you make above $120K is at the 39% tax rate (for instance), but you’ll still get to deduct state taxes and whatever other deductions are available, it’s a lot easier to plan for.

  25. 25

    Zifnab, it’s WAYY less than 175K. I don’t have a link, but I know familes making less than 80K combined who have been hit by it. Granted 80K is not poor, but when you pay almost 8% in SSI, over 25% of actual federal tax, 5% state tax and other misc tax, suddenly you’re taking home 4K a month to support four or five people. Hardly living the life of luxury in 2009.

  26. 26
    Comrade Stuck says:

    No need to fear the Reeper, Sarah Serendipity is coming to Washington DC, and will try and talk some sense into that hyper partisan all around meany Presnit Obama.

    Palin to Come to Washington in Hopes of Talk With Obama

    I hope somebody passes out a sufficient number of clean towels for the Starburst Crowd.

  27. 27
  28. 28

    Speaking of the Stimulus Plan they (Americans United for Change) just ran an ad encouraging NH residents to contact Judd Gregg and tell him to support the bill.

  29. 29
    Cain says:

    Palin to Come to Washington in Hopes of Talk With Obama

    He should ignore Palin and invite Limbaugh to the White House instead. In fact, don’t invite any other republicans, just Limbaugh.

    cain

  30. 30
    Brian J says:

    I don’t know when the next open thread will be, so I might as well post this here. A friend from work is a member of a group on Facebook called I BET I CAN FIND 1,000,000 PEOPLE WHO ADMIRE GEORGE BUSH!. This is a global group, so I believe it is open to anyone. Here’s a description, from the group’s page:

    This is a group for people that admire our current president, Mr. George W. Bush. People that join to flame, spam, troll, or outright attack Bush (and his supporters) with lies and other such nonsense will be cleaned up and banned.
    Here is a list of George W. Bush’s achievements:
    1) After 9/11, he kept terrorist attacks off U.S. soil, and because of his efforts in Iraq, there has been steep declines in terrorist attacks and murders in many regions of the globe.
    2) Bush is the most pro-life president in history.
    3) He is one of the few politicians that support the Federal Marriage Amendment (Because first of all, marriage laws should be the decision of the national government, not the states).
    4) Broke up terrorist cells within the U.S. using the Patriot Act.
    5) He has helped expand the economy and brought us out of the Clinton recession.

    How many members does it currently have? 15,355. Not there yet, I’m afraid.

  31. 31
    HyperIon says:

    @John Cole: and if you stay in academia, you probably never will.

    which reminds me….are you actively working on your dissertation?

    finish that sucker and move on.

  32. 32
    calipygian says:

    At this point, Starbursts is sitting in The Bunker listening to Der Boehner shuffle phantom units around, hoping to stop Zhukov with a company sized "divisions" manned with teenagers and Social Security recipients.

  33. 33
    Comrade Dread says:

    stopped being the crazy uncle at the holiday dinner ranting insanely about everything.

    They’ve moved beyond crazy uncle into Lyndon LaRuche supporter.

  34. 34
    Nicole says:

    @Zifnab: That’s just not true. I can assure you we made nowhere near $175,000 last year (I wish we had!). Households making $75,000 can be subject to the AMT, and the number that are increases every year. On top of that, people who live in states with high state income taxes are more likely to fall under it, thanks to the very complicated way the AMT is calculated.

    Now, can someone explain to me why this tax that was designed to make sure the wealthy pay their fair share actually phases out once one makes more than $415,000 a year?

  35. 35
    Just Some Fuckhead says:

    and I understand their opposition to spending

    lolz

    You mean you’re sensitive to their rhetoric, right?

  36. 36
    Church Lady says:

    Besides high state taxes, high deductions for child care or mortgage interest can throw someone into owing the AMT. My sister has six kids, causing huge daycare and after school care expenses, and she always winds up paying the AMT.

  37. 37
    Church Lady says:

    Off topic, but how did Tom Daschle not realize that a car and driver being provided to him by an entity that was paying him consulting fees (over two million during a three year period), was not a taxable benefit? I’m sure he was issued a 1099 – shouldn’t the value of the car/driver have been included on it? And what’s with all these very high income earners not paying a CPA to do their taxes? When you make the kind of money Daschle and Geither made, you can afford to pay someone to do your taxes. It’s a whole lot cheaper than paying back taxes, penalties and interest of $100K, not to mention the embarrassment of it all.

  38. 38
    Xenos says:

    @Church Lady: The daycare deductions don’t amount to squat, anyway (five kids here). We don’t even itemize, but still hit AMT. Just an effect of the class warfare that goes on, where the middle and upper middle classes are screwed by the top 1%. It is like the college graduates who decided to go to Wall Street are out to screw all their former classmates.

  39. 39

    […] From Balloon Juice (emphasis added). (W)e would be so much better off if the Republicans just took a little breather, got themselves pull… […]

  40. 40
    Ash Can says:

    OK, let’s see — a Republican senate aide is waxing euphoric about his party getting slapped around by the Dems over the stimulus bill, Moosepie Sarah is headed to DC thinking she can set Obama straight, and the RNC elects as its leader someone who considers being a Republican a liability.

    Good grief, the Onion’s going to be out of business by the end of next week at this rate.

  41. 41
    Jim says:

    They’ve reduced themselves to the rebound boyfriend of American politics

    The best description yet of Republicans. After scrolling through the comments and putting my four year old grandson to bed, I’m still laughing.

  42. 42
    D-Chance. says:

    Lessee…….. Rangel didn’t pay his taxes, Geithner didn’t pay his taxes, now we find out that Daschel didn’t pay his taxes… is it any wonder we’re so deep in debt when one entire political party doesn’t even bother to pay taxes?

  43. 43
    TenguPhule says:

    I’m sure he was issued a 1099 – shouldn’t the value of the car/driver have been included on it?

    Yes. It probably wasn’t though.

    Speaking from personal observation, upper management tends to fuck up what should really be left to the decision of the accountants.

    Also filling out the 1009 MISC is a PAIN IN THE ASS that is all too easy to fuck up if you’re not very very careful.

  44. 44
    TenguPhule says:

    is it any wonder we’re so deep in debt when one entire political party doesn’t even bother to pay taxes?

    Yes, we’re working on getting Republicans to actually pay their taxes as opposed to foreign tax shelters.

  45. 45
    TenguPhule says:

    1099 MISC

    Bleh.

  46. 46
    TenguPhule says:

    And what’s with all these very high income earners not paying a CPA to do their taxes? When you make the kind of money Daschle and Geither made, you can afford to pay someone to do your taxes.

    When you make the kind of money these people make, you try not to spend any of it unless you really have to or want to. Apparently in their cases CPAs were neither a sufficient need or want in their opinions.

  47. 47
    Davis X. Machina says:

    And what’s with all these very high income earners not paying a CPA to do their taxes?

    I blame software.

    From desktop publishing (composers, printers) to word processors (secretary-typists) to RosettaStone to accounting, people are doing for themselves what it used to take a skilled, if not very sexy, professional to do.

    And doing it wrong. Call in ‘insourcing’.

  48. 48
    kay says:

    @Davis X. Machina:

    I hire a CPA. I hand him Quickbooks data and he hands me back a bound…document 6 weeks later. It’s about 30 pages long, including schedules. I don’t make all that much money, but I work for three different counties and do private work too. I know I pay a city tax and a village tax, in addition to state and federal. I skim it, then I sign it, and I tear off the coupon-like attachments and write checks, periodically.
    I have no idea what I’m looking for when I skim it. I wouldn’t know an error if it jumped up and bit me. It’s the whole reason I hired him.
    I don’t know what would happen if anyone checked his work. He has a good reputation. My sister’s a CPA and she recommended him. I would have the "sister defense" I guess.

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