Obama, Ayotte agree: On fiscal cliff solutions, find common ground
Hoping to "give families and businesses some good news going into the holiday season," President Obama in his weekly address continued to call on House Republicans to get on board - and soon - with a bill to extend the Bush-era tax cuts for Americans making less than $250,000 a year.
"We face a very clear deadline that requires us to make some big decisions on jobs and taxes; on investments and deficits," he said, referring to the so-called "fiscal cliff," a series of tax hikes and spending cuts set to go into effect Jan. 1 which could hurl the United States into a dangerous recession. "Both parties voted to set this deadline. And I believe both parties can work together to make these decisions in a balanced and responsible way."
The president echoed congressional leaders' statements that their meeting Friday at the White House to try to come up with a workable compromise was "constructive." In brainstorming how to "reduce our deficit in a way that strengthens our economy and protects our middle class," he said, "everyone agreed that while we may have our differences, we need to come together, find solutions, and take action as soon as possible.
"If anything, that's the message I heard loud and clear in the election: Work as hard as you can to make our lives better, and do it together," Mr. Obama continued. "Don't worry about the politics; just get the job done."
Republicans in Congress have consistently balked at any plan to extend tax cuts that does not include the top two percent of wealthy Americans. Democrats argue that allowing the lower rates to expire for the very rich is the only feasible way to generate revenue.
In the meantime, though, "We shouldn't hold the middle class hostage while Congress debates tax cuts for the wealthy," the president said. "Let's begin our work by actually doing what we all agree on: Let's keep taxes low for the middle class."
Ayotte: Fiscal cliff provides opportunity for renewed bipartisanship
Delivering the GOP response, Sen. Kelly Ayotte, R-N.H., tried to make the case for tax reform - which she believes both sides agree should be done - to eliminate loopholes and preferences as a revenue generator that "makes much more sense than raising tax rates, which will harm nearly a million small businesses and cost hundreds of thousands of jobs."
But in spite of the disagreements, Ayotte suggested, the year's-end deadline forcing Congress to deal with taxes and spending "provides an opportunity for both parties to change our country's irresponsible spending path." The nearly $500 billion in additional defense cuts, she used as an example, is something Republicans and Democrats agree would "hollow out our military and cost jobs."
"One thing is clear: doing nothing is not an option," she said. ""Failure to stop this combination of tax hikes and arbitrary spending cuts threatens to throw our country's economy back into recession - at a time when millions are still out of work. This is a test we cannot fail."
Popular in Politics
- Immigration reform would cut deficit, analysis shows 78 Comments
- Senators: U.S. must take "more decisive" military action in Syria
- House Republicans pass 20-week limit on abortions 169 Comments
- Obama and Berlin: Faded echoes meet new realities
- Bill Ayers: Obama should be tried for war crimes
- Snowden: U.S. gov't destroyed my chance for fair trial
- Smooth, on-time Obamacare rollout no sure thing: GAO
- Treasury secretary's loopy signature is now less loopy
linkicon reporticon emailicon
Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds
Here's a brief economic history of the last quarter-century in taxes and growth.
In 1990, President George H. W. Bush raised taxes, and GDP growth increased over the next five years. In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years.
____________________________________
You seem to think repeating the same tripe over and over makes it true.
Correlation is for sissies. Prove the cause and effect factually that higher taxes were the catalyst for the economy and not:
1) Onset of the Information Technology Age (1994) - changing the face of business and the definition of productivity forever.
2) Cut in Cap Gains Tax (1996) - making investment more profitable and therefore helping to fuel investment that accelerated the Tech Boom.
3) The Tech Boom itself - and it is well documented how well this helped GDP.
To prove that higher taxes were responsible for economic growth, you would need to find supporting evidence that the higher taxes did something definitive. Drawing some vague conclusion with some thin correlation explains nothing.
I'll save you some time - you can't prove it. You'll understand once you graduate the 3rd grade ciggle.
This is something that Boehner should have worked out September 2011 with the Grand Bargain, he did not and said that he would not. HE created the problem and now it is time for HIM to solve it. No crying nor weeping, just get the job done turkey!
There are serious economists who study the difference between what our states pay in taxes and how much they get in return from the U.S. government.
The numbers, for decades now, have been quite clear: With some exceptions, what we regard as RED states are sent a whole lot more of your hard-earned tax dollars than the traditional blue states. In effect, supposedly indolent, "tax and spend" liberals actually subsidize the individualistic, pure, and "hard-working" lifestyle of our conservative countrymen.
The results will stun many people, though not me: I've been telling my Tea Party relatives this for years. Here's a list of the top 10 states that got the most back in terms of federal benefits:
1. New Mexico ---- Indian reservations, military bases, federal research labs, farm subsidies, retirement programs
2. Mississippi ---- Farm subsidies, military spending, nutrition and anti-poverty aid, retirement programs.
3. Alaska ---- Per capita No 1 recipient of federal benefits; infrastructure projects, DOT and pork projects.
4. Louisiana ---- Disaster relief, farm subsidies, anti-poverty and nutrition aid, military spending.
5. W. Virginia ---- Farm subsidies, anti-poverty and nutrition aid.
6. N. Dakota ---- Farm subsidies, energy subsidies, retirement and anti-poverty programs, Indian reservations.
7. Alabama ---- Retirement programs, anti-poverty and nutrition aid, federal space/military spending, farm subsidies.
8. S. Dakota ---- Retirement programs, nutrition aid, farm subsidies, military spending, Indian reservations.
9. Virginia ---- Civil service pensions, military spending, veterans benefits, retirement, anti-poverty aid.
10. Kentucky ---- Retirement programs, nutritional and anti-poverty aid, farm subsidies.
From the non-partisan Tax Foundation
===========================================================================
Really?? No one paid 91%, in fact it was impossible to pay 91%. Even heiress Marjorie Merriweather Post owed no income tax. You must also remember that we were really the only manufacturing country left after WWII. We were supplying the rebuilding of the world. To top it off, total government spending was around 17% of GDP in 1950. Today it's around 35%. That means if your premise is correct our top marginal tax rate would have to be around 182%. It the spending that's killing us, not the income. As far as the 1950's not being dismal, my father was a member of the Teamsters Union. We did not have an indoor toilet until 1954 nor a TV until 1956. But I guess in your simple world, we were the Jeffersons of the 50's. We finally got "our piece of the pie" due to high taxes.
As if anyone in the top 1% pays 35% today......LOL!
As if any corporation pays 35% today.......LOL!
The Forbes 400 wealthiest Americans are ALL Billionaires, and they pay an average 17% in income taxes.......LOL!
The GOP mormon cultist gets the biggest "gifts" from Americans, by paying even less than the 15% capital gains rate on his income, and only pays 13.8%.......LOL!
FACT is, America was strongest with jobs and economic growth when taxes were considerably higher and unions were the strongest!
Here's a brief economic history of the last quarter-century in taxes and growth.
In 1990, President George H. W. Bush raised taxes, and GDP growth increased over the next five years. In 1993, President Bill Clinton raised the top marginal tax rate, and GDP growth increased over the next five years. In 2001 and 2003, President Bush cut taxes, and we faced a disappointing expansion followed by a Great Recession.
Analysis of six decades of data found that top tax rates "have had little association with saving, investment, or productivity growth." However, the study found that reductions of capital gains taxes and top marginal rate taxes have led to greater income inequality. Past studies cited in the report have suggested that a broad-based tax rate reduction can have "a small to modest, positive effect on economic growth" or "no effect on economic growth."
Well into the 1950s, the top marginal tax rate was above 90%. Today it's 35%. But both real GDP and real per capita GDP were growing more than twice as fast in the 1950s as in the 2000s. At the same time, the average tax rate paid by the top tenth of a percent fell from about 50% to 25% in the last 60 years, while their share of income increased from 4.2% in 1945 to 12.3% before the recession.
From new study from the Congressional Research Service, "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945"
The budgetcuts from sequestering average $100B per year over10 years -they don't appear to be massive and the accross the board reductions are easier to make than selecting entire programs to eliminate. Now every dollar not spent by the FED, mustbe made up by private economy or States to sustain the GDP bouyed by those expenditures.
Tax increases have less effect on the economy than budgetcuts. That is a fact. Tax cuts are at best 70% as effective as increased spending in improving demand. THe shortsightedness is thinking that only the 2% can pay anything significant here without affectingthe economy. ALL of the Bush Tax cuts need to expire for at least 3 years, just to pay for the Iraq/Afghan wars. I know,I know - the middle class with bear some burden- but there is no other way. This raises ~ $400B per year.
So the entirety of the "clif" is only a deficit reduction of ~ $500B on a deficit of $1T.
I believe theeconomy can take it. If it can't, Congress and the President can jump into limited restorative action after a quarter or so.
We have been living with our collective heads in the sand for well over a decade (more like 30 years).....we have tostart paying the bills. ......and it may take about 30 years to dig out.
You need to find another avenue of reasoning.
I do agree that just taxing the rich isn't a big enough solution, but your argument is the same class warfare from the other side of the fence.
I agree that the proposal to tax the wealthy does not generate enough revenue tomake a dent in the deficit, but neither does it affect the economy very greatly.
Massive budget cuts would affect every State economy and the private sector.....especially in light of the EU recession that is ongoing.
So. HOw do you propose to grow demand and/or pay down the deficit? I don't see a wayout without a broader tax increase back to CLintonian rates.
Also, are you then proposing that the those with the most citizens united votes are also the only ones deserving to vote? Your terminology analogizes the "Moral" majority verbage.
The majority - smart, moral or indifferent have spoken. Can we not now come to some resolve some difficult issues together?
How bout CHASM !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
It's only half of the annual deficit.
People seem to forget that this was a temporary tax break because there was a surplus.
Before Reagan the tax rate on high end earners was 70%, so the lost of the small tax break on the rich is hardly anything to argue over. No, it doesn't pay for the spending, but it is a step in the right direction. The other step is to cut spending. The other step is to pay for wars with higher taxes (laugh) or get out. It is a choice. But if you aren't willing to pay then you can't say someone is soft on defense.
I don't understand the Republican obstruction. Give the middle class a break AND avoid the cliff. Then you have the high ground for cutting spending. If it doesn't happen, you win. Right now everyone is losing because of the uncertainty.
If the economy starts tanking again , Congress can take action backing away then.