GOP plan to extend tax cuts for rich adds $36 billion to deficit, panel finds

[Sandy Eggo]

A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year -- and transfer the bulk of that cash into the pockets of the nation's millionaires, according to a congressional analysis released Wednesday.

New data from the nonpartisan Joint Committee on Taxation show that households earning more than $1 million a year would reap nearly $31 billion in tax breaks under the GOP plan in 2011, for an average tax cut per household of about $100,000.

The analysis, requested by Democrats on the tax-writing House Ways and Means Committee, comes as debate heats up over tax cuts enacted during the Bush administration, most of which are scheduled to expire at the end of this year. Republicans want to extend all the cuts, which would cost the Treasury Department $238 billion in 2011, according to the taxation committee. President Obama and congressional Democrats have vowed to extend the cuts only for families making less than $250,000 a year and individuals making less than $200,000 -- 98 percent of American taxpayers -- in a plan that would add about $202 billion to next year's deficit.

Given the soaring national debt, many economists deem both proposals unaffordable. Even some Republicans, including Reagan administration budget chief David Stockman and former Fed chairman Alan Greenspan, have urged lawmakers to let them expire and allow income tax rates to pop back up to their levels during the Clinton administration.

Obama campaigned on a pledge not to raise taxes for the middle class, however. And with midterm congressional elections in November, few politicians in either party are calling for full repeal. Instead, lawmakers are gearing up for a battle when they return to Washington in September over the small fraction of the tax breaks that benefit the nation's richest families.

Both sides are eager to engage that fight on the eve of the election. Democrats see a political advantage in accusing Republicans of holding tax breaks for the middle class "hostage" in order to get tax cuts for the wealthy, though it's not clear that GOP lawmakers would in fact block extension of the middle-class cuts if they were offered alone.

Republicans accuse Democrats of plotting one of the biggest tax hikes in American history, arguing that raising taxes on wealthy households would punish the very people capable of creating jobs, spurring economic growth and reducing the 9.5 percent unemployment rate. About half of all small-business income is reported on the individual returns of people making over $250,000 a year, according to the taxation committee's data, though those taxpayers represent only about 3 percent of small businesses.

"We cannot forget that a lot of those people are small businesses," said Sage Eastman, a spokesman for Rep. Dave Camp (Mich.), the senior Republican on Ways and Means. "The American people don't want them paying higher taxes -- they want them hiring more people."

Democrats counter that wealthy households would receive a tax benefit under their plan. The joint committee analysis shows that million-dollar households would continue to receive an average tax break of about $6,300 next year compared with full repeal -- significantly more than the average break of about $1,100 that would go to families making less than $200,000 a year, according to the taxation committee.

Despite that bit of news, the nation's 315,000 millionaires are unlikely to feel grateful; the joint committee said their overall federal tax rate would jump to about 29.9 percent under the Democratic plan, compared with 24.6 percent if all the tax cuts were extended.

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/11/AR2010081105864_pf.html

Based on the comments that I've seen here from some of our right wing friends, this should infuriate them. The Republican party wants to do their rich friends a favor at the cost of increasing the national deficit.

**Disclaimer, I don't like posting entire articles, but I chose to do so because I was concerned that you'd need a membership to read the whole thing and I didn't want to force you to do that.

[The Troll]

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/11/AR2010081105864_pf.html

Based on the comments that I've seen here from some of our right wing friends, this should infuriate them. The Republican party wants to do their rich friends a favor at the cost of increasing the national deficit.

**Disclaimer, I don't like posting entire articles, but I chose to do so because I was concerned that you'd need a membership to read the whole thing and I didn't want to force you to do that.

  How many  years have the Super Rich and these corporations had all of these tax breaks?

  OK, where in Hell is all of the Jobs.  Fat over payed rich people create jobs.  My ass.  Tell me just were are all of the jobs here in American. 

   
  The only jobs these fat over paid SOB's have produced, are outsourced or over seas.  Has anybody check China and Indian and some of the other slave wage paying countries for our stolen jobs.  WAKE UP AMERICA.  THESE BASTARDS WILL STEAL THE PENNIES OUT OF A DEAD MANS EYES.

[Henry Hawk]

Let me ask you one question....

where do you think that $36 billion is going, if left to those who earned it in the first place?

I would rather let the rich have that money who is going to spend it or invest it (means more jobs)...OR...let that 36 billion go back into the hands of the REAL crooks (our government)...

tax breaks CREATE's a REAL stimulus.....the gov spent $787 billion nearly two years ago....and I have not seen a whole lot of stimulation....

we ALL need to keep MORE of what we earned....to stimulate the economy..........................giving MORE to our government is NOT going to help the economy.

period.

[The Troll]

Let me ask you one question....

where do you think that $36 billion is going, if left to those who earned it in the first place?

I would rather let the rich have that money who is going to spend it or invest it (means more jobs)...OR...let that 36 billion go back into the hands of the REAL crooks (our government)...

tax breaks CREATE's a REAL stimulus.....the gov spent $787 billion nearly two years ago....and I have not seen a whole lot of stimulation....

we ALL need to keep MORE of what we earned....to stimulate the economy..........................giving MORE to our government is NOT going to help the economy.

period.

  Henry you so full of Bull Shit and you full of yourself.  The bastard are holding on to it.  If they invest it, it will be over seas.  Dumbass just where have the jobs gone to.  The working middle class sure didn't steal them.

[IYT]

A Republican plan to extend tax cuts for the rich would add more than $36 billion to the federal deficit next year -- and transfer the bulk of that cash into the pockets of the nation's millionaires, according to a congressional analysis released Wednesday.

Transfer wealth to millionaires?  How is letting rich people keep their tax dollars transferring anything?  It's their wealth to begin with.  But I'm sure the gubment will spend that money wisely.  Broken Window fallacy at its finest.  Of course, the rich won't be hardest hit by the tax cuts expiring.