Democrats Reveal Tax Proposals — Triggering Complaints that Some Rates Threatened to Go as High as 57 percent

thumb_bag_of_moneyMany of us have expressed concern about the pork-laden appropriation bills and stimulus package this year. Just as Republicans showed little restraint in spending in the war bills, Democrats have treated the economic recovery bills as a license for unlimited spending. Now, massive taxes and sur-taxes are being proposed. New York officials are complaining that, if passed, the rate for some of its citizens could reach almost 60 percent. Some Democrats are now seeking to reduce a proposed 5.4% sur-tax to 1 %.

The taxes are being proposed to reduce the towering deficit and pay for the national health care plan — which the Obama administration is pushing through as a breakneck speed — demanding passage by the August recess. This reminds many of us of the Patriot Act where precious little time was allowed to consider its implications and language.

However, the New York Times has an editorial detailing the fairness of the plan and questioning the criticism over tax increases. I happen to support the policy agenda of the Administration in this area, but I think that the administration can be faulted for pushing such an important piece of legislation through on an expedited schedule.

Biden reportedly entered the fray today with a classic statements: “Well, people when I say that look at me and say, ‘What are you talking about? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, I’m telling you.”

Nevertheless, opposition to the sur-tax is growing among Democrats and Pelosi is indicating that she may try to reach a compromise, here.

For the New York objections, click here.

78 thoughts on “Democrats Reveal Tax Proposals — Triggering Complaints that Some Rates Threatened to Go as High as 57 percent”

  1. Mike A.,

    That was well said. I will only add one thing that someone told me once. If you’re willing to be taxed call you Senator and Representative and let them know that. I think that’s a very good idea and doing it is worth the shock value on the other end of the line!


    I agree.

  2. Healthcare and fuel should be utilities, like water, gas, electricity, and garbage collection.

    The reason is that without it being a utility, the plunder barons get all jiggy wid it.

    Anything that is basic enough for survival should not be left to “profit” oriented individuals.

    Good capitalists can make a living in endeavours where they cannot use or resort to extortion to make a profit.

    That is my theory and I am sticking to it.

  3. We all know that all taxation involves the redistribution of wealth. Assuming we all agree that taxes are required for certain purposes, the issues then are: 1. what purposes do we wish to support through taxation; 2. how much is required to support them; and, 3. who is going to bear the tax.

    My position is that we should establish health care as a right for all. If you agree with that position, you will recognize a need to produce revenue to fund it. If you disagree, you will oppose the imposition of any taxes for that purpose. I believe that a clear majority in this country support the idea of universal health care.

    It is also my opinion that the fairest tax for most purposes is a tax on income and that it is appropriate to tax higher incomes at higher rates. Therefore, I do not find anything problematic with a surcharge to fund health care. I do know that my own health insurance presently costs in excess of $12,000.00 per year for two people, with a deductible of $3,500.00. Therefore, assuming that I use most of that deductible in the ordinary course of the year, which I do, my health related expenses are approximately $15,000.00 per year. It doesn’t take a genius to calculate that I would realize significant savings through universal health care even were I hit with a surtax of five to six percent.

    That being said, I recognize that there is much to consider in the details of a well thought out bill, and I’m not in favor of an arbitrary deadline to complete the legislation. However, if no deadline is set, opposition forces will attempt to drag out debate forever. I cannot imagine any legitimate excuse for not being able to have a comprehensive statute in place by sometime this fall.

  4. puzzling,

    What you wrote is really interesting to me. I know we come from very different perspectives about the role of govt. and yet we are in agreement. This govt. is an out of control Entity (I’m giving Entities a bad name here, sorry) which does not serve the public good. I feel this is the time for a third party. There are many of us, from all different philosophical stripes who believe this govt. is not acting on behalf of the common good, in fact it is completely antithetical to any kind of good at all. I don’t think many people feel at home in either the Republican or Democratic party any more. I think people who do want a common good are the real majority, we just don’t have a home in the major parties. Those parties need their asses kicked to the curb and their trunks thrown in the street!

  5. Jill,

    Let’s just say that I would gladly agree to pay taxes for a few selected entitlements … IF by doing so we could stop the astronomical military/industrial spending, shut down the global empire, end rampant corporatism, and somehow strip the government of the resources it needs to abuse its contract with the people with near impunity. Yes — that would be a great deal better than where we find ourselves today.

  6. Patrik,

    The devil is in the details. The package being rammed through Congress is not helpful to the poor and middle class. People who voted for Obama did want affordable and decent health care for all and that was what he promised. Unfortunately, if you take a close look at this plan, you will see these are not what it is about.


    You know we differ on taxes. I am happy to pay for the social well being of people in my society. I do not consider it a confiscation of my income. I consider it money well spent on a good society. I do however, really resent my taxes being spent on wars, financial cronyism and Eatrs!

  7. This was a strange post all around. Obama campaigned on health care and won. It has been 9 months since the election, and 19 months since Iowa. I think most people are wondering what is taking so long, not that it is being “rammed” through.

    I find almost no Americans, even CPAs and CFPs I’ve talked with, understand how the marginal income tax bracket works. 99% of Americans believe if you move into the 28% tax bracket, from 25%, you will pay 28% on all your income. Never mind that with deductions, nobody pays their marginal rate. They don’t even understand the mechanics.

    The top 1% pay lower effective tax rates than the 20-30% of taxpayers directly below them (~30% to 32%). Their effective tax rate should be higher, or everyone else should be lower. But Republicans spent us into a huge debt and deficit and at this point it makes more sense to raise them.

    With a top rate of 35%, and a surtax of 3%, what is NY’s highest marginal rate, 20%? I find that really unlikely. Which makes this whole post a ramble on an easily verified false number. Of course, when you use the NY Post as your source, that is what you get.

  8. Taxing high earners, and eventually all earners, won’t be the end of wealth reallocation by the government.

    I see the United States eventually modeling France’s “L’impôt de solidarité sur la fortune”, or wealth tax.

    In other words, rather than taxing production, this tax simply taxes assets directly. Living large on $1M in muni-bond income with a house in the Hamptons? Currently not taxed. Just out of school and landed that big $250K job in Manhattan? Hand over 60%.

    There will be no end to the confiscation methods employed by the government in order to create programs that politicians use to convince people to re-elect them.

    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money”
    -Alexis de Toqueveille

  9. BuelahMan:

    “One might, but one might also believe you are a clueless idiot.”

    I am interested in why you think so. If I am wrong about any of the above statements I would like to know why and how my thinking is incorrect. Please posit an alternative interpretation of these events.

  10. One may presume you have no answer other than venom and vituperation.

    One might, but one might also believe you are a clueless idiot.

  11. BuelahMan:

    I disagree with the bailouts and was against them from the beginning and knew they would not work. I think the companies that took government money should have been allowed to fail. I think Bush and Paulson were fools and did a great disservice to our country.

    You are “idle” because we have fools that run our country.

    I also don’t believe in crony capitalism, I think if you cannot make it on your own merits then go out of business and let the more effective companies use the resources that you are wasting.

    I hope that clears it up for you.

    I really don’t like being called an idiot, but then I suppose I should take it as a compliment since you haven’t had the decency to answer a fairly simple question. One may presume you have no answer other than venom and vituperation.

  12. IS,

    What jill said.

    Did you JUST fall off the turnip truck after this election? Or are you nothing more than a Demublican who MUST protect his ultra rich friends who have propped him up for so long.

    My God, you are Max Baucus in disguise, aren’t you?

    You see, I don’t have that same benefit Obamaites and Bushies have. I can tell the difference between “productive” rich people and the same folks who got all the bailouts while I am left to die on the vine. You are oblivious to such a notion.

    As far as I am concerned, if you are one of those ultra rich assholes who have ravaged this country with the blessing of our “leaders”, then you are a traitor.

    BTW: If you think I am “idle” in any damned way, form or fashion, you are a plainly an idiot.

    I hope this clears it up for you.

  13. Buelahman:

    How so? Isnt that exactly what he is doing?

    Explain to me then what he is doing?

    Taxes are the taking of your productivity by force. That you dont understand this elemental concept is interesting.

  14. This just in—GS, BofA, Citi, AIG etc, are now considered the idle poor!

  15. This president is stealing from the productive rich, middle class and poor to give to the idle poor.

    What an amazing display of unabashed idiocy.

  16. bdaman:

    “The President as advertised is/will be the modern day Robin Hood.”

    Robin Hood stole from the idle rich and gave back to the productive poor. This president is stealing from the productive rich, middle class and poor to give to the idle poor.

    He is a thug using the full force of the federal government to take our rightfully earned money. Since we earn money, typically by trading hours for dollars we are giving up a part of our life to the state. I believe in an earlier time they called it slavery.

    It will not work, the productive rich will find ways to keep their money and the productive middle class will quit being as productive and the productive poor will work for cash that is untraceable. All this will do is diminish the amount of money available for stealing and the government will be broke.

    And for what? Providing health care for maybe 15 million of our citizens.

    “The only problem with socialism is that you eventually run out of the other persons money” M. Thatcher former Prime Minister of Great Britain

  17. C.L.,
    Actually, I used to work a minimum 72 hour week for considerably less than $100,000 and my job was much harder and at times more dangerous than being a lawyer. I always worked through lunch. Grow up entitled person and realize that most people never sniff at $160,000 in their lives and work harder at their harder jobs than you do. Besides, maybe having you home for dinner would be better for your family? People making the most in this country have not been paying their fair share for years and reaping the benefits. However, I guess when you see the world strictly through the perspective of your own selfish interests, then you think you are doing us a favor making your $160,000. By the way I’ve known salesman for major corporations who make twice what you do and work 40 hour weeks if you count time on the Golf Course. Many of them had never finished college. Let’s continue to reward them also with tax breaks. They actually displayed more sensitivity and intelligence in their comments than you do.

  18. I know if the highest tax rate is 60%, I will not go to work for a law firm. Money is the only thing tipping the balance between (1) working 60-hour weeks and never seeing my family for $160k and (2) working 40-hour-plus-hour-lunch-plus-vacation weeks for the government for $60k.

  19. How quickly we all forget. The Bush/Cheney Crime Family’s tax cuts for the wealthy in 2001 cost the country one trillion$. Everyone else got pennies. This put us in deficit and then doubled with the Iraq war. Tax rates on the richest American have fallen precipitously since the days of the dumb, B Movie Actor, while those of everyone else have risen. It’s time to redress the imbalance that has brought our county to the verge of bankruptcy and the rich to a new Golden Age of Greed.

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