There is so much misinformation that get circulated in some progressive/liberal blogs, it is quite inconceivable how much we do ourselves a disservice to promote our own cause. I think it is important to make sure that we all have the facts straight on the tax deal that was made late in December of 2010 and that it is crystal clear so that there is no misunderstanding of what its intended purpose was and the fact that it is only a two years extension that is suppose to expire by 2012. AGAIN, IT IS ONLY A TWO YEAR EXTENSION and it is not going to be PERMANENT as some would like to spin it. I don't believe many ask the question about how they would feel had the tax deal was not struck and that they will be paying $3,000 more in their taxes on the average or that they won't receive a $1000 per-child tax credit up to $3,000 or those 7,000,000 unemployed Americans won't collect any kind of unemployment income or lose a $2,500 in tax savings to help pay for their children college tuition, and on and on. However, averting the Government shut down by compromising with a Republican Majority congress in fact will only reduce the actual budget from the 2009 level by only $33 Billion and not by the $73 Billion in imaginary, government-speak dollars that is now characterized and framed according to one DailyKos blogger as:
Its funny the hole that they plan to fill is pretty much the same size as they dug with the extension of the Bush tax cuts. [HOGWASH #1:look at the $$$ in the tax deal up close because statement such as this are a complete substanceless sensationalization and a complete lie] [or is it...] The largest budget cut in history just paid for the giveaway of the century. [HOGWASH #2:Thw largest budget cut from which budget? The imaginary budget that was never passed? Please. The cut that is being sold as a $73 Billion is from a proposed budget that was never was an actual budget since the actual budget cut really is only $33 billion]I really think progressive/liberals in the blogshpere must put a little more effort and energy in seeking out the truth and support the assertions they make with facts rather than be like the MSM sensationalizing facts to serve their own interest. The question I have though would be, when we do such misrepresentation from the progressive/liberal side, what is our interest and intention? How is that serving us in shaping the message or the lack thereof? How is that helping us get accurate information reach its audience when some are using typical RW narrative used by the MSM? Just to recap and this time with expanded sources that each and everyone who never had an opportunity to look in depth about the benefit of the tax deal can take time to digest all the information available in one place and educate ourselves to shape our message instead of being self defeating on something that does benefit many working Americans: Damn it, the TAX DEAL is not PERMANENT 1) Keep $3,000 in tax savings annually 2) Unemployment Benefit for 7,000,000 Americans worth $56 Billion. 3) $2,500 in tax savings to help pay for college tuition and other expenses 4) A $2,000 payroll tax savings to someone making $100,000 or a $1,000 payroll tax savings at a 2% employee-side payroll tax cut for over 155 million workers 5) Child tax credit of $1,000 per child with the $3,000 maximum credit threshold. 6) Earned Income Tax Credit that will give on an average $600 in additional assistance to families with 3 or more children 7) A 65 percent tax credit to help cover the cost of COBRA for those who lost their jobs in the recession 8) forecast to creating approximately 1.6 million jobs increasing the GDP for 2011 9) extended the credit for adoption-related expenses that reduces families tax bill up to $13,170 in 2011 through 2012 with a maximum of $12,170 in credit. But, but, but...let's look at the analysis on President Obama's Budget Taxes: Almost $1 Trillion in New Taxes Over Next 10 yrs, Starting 2011
1) On people making more than $250,000. $338 billion - Bush tax cuts expire $179 billlion - eliminate itemized deduction $118 billion - capital gains tax hike Total: $636 billion/10 years 2) Businesses: $17 billion - Reinstate Superfund taxes $24 billion - tax carried-interest as income $5 billion - codify "economic substance doctrine" $61 billion - repeal LIFO $210 billion - international enforcement, reform deferral, other tax reform $4 billion - information reporting for rental payments $5.3 billion - excise tax on Gulf of Mexico oil and gas $3.4 billion - repeal expensing of tangible drilling costs $62 million - repeal deduction for tertiary injectants $49 million - repeal passive loss exception for working interests in oil and natural gas properties $13 billion - repeal manufacturing tax deduction for oil and natural gas companies $1 billion - increase to 7 years geological and geophysical amortization period for independent producers $882 million - eliminate advanced earned income tax credit Total: $353 billion/10 yearsThat does not seem like dinging the working class Americans, does it? According to Andrew Fieldhouse of the Economic Policy Institute:
The president’s budget requests have consistently adhered to one campaign pledge: Allow the Bush-era tax cuts for the wealthiest 2% of Americans to expire. Like last year’s budget, this budget proposes to permanently extend middle-class tax relief for individuals earning less than $200,000 and joint-filers earning less than $250,000. This proposal implicitly means allowing the top 33% and 35% marginal tax rates to revert to 36% and 39.6%, respectively, for individuals earning above $200,000 and joint-filers making more than $250,000. The budget also assumes that the personal exemption phase-out and the limitation on itemized deductions are reinstated for these top earners. Finally, the preferential rate on capital gains and dividends would increase from 15% to 20% for upper-income tax filers (prior to the Bush-era tax cuts, qualified dividends had been taxed as ordinary income under progressive tax rates). Last December’s tax deal had extended these upper-income tax cuts through the end of 2012 as the price for securing middle-class tax relief and continuing emergency unemployment insurance.I am going to try to give you a pointer as to what a wide range of independent analysts and economist have said so that this myth that Democrats caved is rubbish and should be put in its rightful place and that is in the garbage:
Mr. Zandi, Chief economist at Moody's Analytics estimated that the deal could cause an acceleration of growth to 4 percent next year and help create 1.6 million jobs, drawing the unemployment rate down from 9.8 percent to 8.5 percent by the end of the year.
The Economist: On Monday Barack Obama and Republican and Democratic leaders in Congress struck a deal on a massive new package of stimulus and tax cut extensions, worth some $800 billion (around 5% of GDP). Though it must still pass the parties’ respective caucuses, this is good news for the economy: the prospect of inadvertent fiscal tightening was the biggest cloud hanging over the 2011 outlook... Economists had generally projected growth next year at only 2.5%, and the biggest risk to that already tepid outlook had been the prospect that some or all of Mr Bush’s tax cuts would expire at the same time as much of Mr Obama’s temporary stimulus. Tonight’s deal is likely to lead to a round of upward revisions.
From a psychological standpoint, this probably will continue to boost the markets in the sense that this most likely will lead to an expansion in economic activity," said Peter Cardillo, chief market economist at Avalon Partners in New York.
Lawrence Mishel, The Economic Policy Institute: President Obama won policies that will put or keep money in the pockets of the unemployed and middle and low-income families, which will increase spending and create jobs.
Bricklin Dwyer, Economist for BNP Paribas:“The package should provide a noticeable boost to GDP in 2011.”
Greg Mankiw, Professor of Economics at Harvard University: “I am generally pleased with the compromise over taxes the President and Republicans struck yesterday... As the policy was described yesterday, this payroll tax cut goes entirely to the worker. This increases work incentives, but the main motivation is probably to increase take-home pay, consumer spending, and aggregate demand. ... I should note that, as part of the deal, the President also got his proposal to allow businesses to expense investment spending. As I have said previously, this is a good idea, but the impact is likely to be modest.”
Macroeconomic Advisers: A December to Remember Compromise Boosts Growth: There are three major components that we had not assumed, and that would, in fact, together significantly impact the economic outlook over the next few years...Based upon what is currently known of these three key proposals, our preliminary analysis suggests that GDP growth in 2011 would be boosted by roughly 1/2 to 3/4 percentage point. This is on top of the 3.7% growth of GDP anticipated for 2011 in our recently published forecast.
Michael Linden and Michael Ettlinger, Center for American Progress: The Jobs Impact of the Recently Announced Tax Framework: The deal as announced would save or create 2.2 million jobs [through 2012], excluding jobs saved by extending the broad based Bush tax cuts, on which everyone agreed.
Ezra Klein, Washington Post: So is this a good deal? It's a lot better than I would've told you the White House was going to get if you'd asked me a week ago. There's some new stimulus in the form of the payroll-tax cut and the expensing proposals. The older stimulus programs that are getting extended -- notably the unemployment insurance and the tax credits -- probably would've expired outside of this deal... And finally, it's something of a hopeful sign: The White House sat in a room with Republicans and Democrats and managed to negotiate an actual compromise. The final deal includes some things that Democrats will like and some things they won't like, and it includes some things Republicans will like and some things they won't like. But it's a deal, and a better one than many -- myself included -- thought they'd reach. These tax cuts were a bit of a special legislative case, as their scheduled expiration forced action, but if you want to be optimistic, this process suggests that the next two years might be a bit more productive than some of us have been predicting.Here, here, here, here, and here are other opinions and facts you might want to consider before painting the President as someone who is unprincipled, a betrayer, self-defeating, weak, and not tough enough to stand for liberal causes. Some said, President Obama did not push for more stimulus and the stimulus was not enough. Well, we used the tax deal as a second stimulus but I guess it is not good enough...right?