Friday, December 3, 2010

The Last Stand over the Bush Tax Cuts ***UPDATE***

I hated Econ in college. It was one of those classes where the professor took a subject that was already complicated and made it into mission impossible.  So I won't make the same mistake of boring you with mathematical formulas and what have you.  Let's keep this thing as simple as possible, cool?  Alright then.  We all know that there's basically one way our federal government makes money: taxes.  What we may not realize is that there are actually 2 ways that our federal government can "spend" money:  (i) by funding programs; and (ii) by giving tax cuts.  That last one may seem kind of counter-intuitive because we don't really think of a government "tax cut" as government "spending."  But look at it this way: the government is entitled, by law, to tax X amount of dollars from the American people each year.  This number (X) becomes known as the annual federal budget.  Let's say for the sake of argument, that the annual federal budget is 100 bucks a year (a Republican's dream, right?).  The federal government is then entitled to tax 100 bucks a year from the American people, so when it gives up this right to tax the American people by, say, $10 bucks for example, it has the same effect as if the government had actually spent the $10 bucks on a program.  Either way, that $10 bucks is gone from the annual budget.  Either way, regardless of whether we chose to literally spend the $10 dollars or give a tax cut in the amount of $10, our annual budget goes from $100 bucks/yr to $90 bucks/yr.  Make sense?  Alright.  If you can understand this basic concept then you are a helluva lot smarter than a lot of our elected officials in Washington right now who do not seem to be able to make the connection that keeping the Bush Tax Cuts will actually cost us money. (to continue our example, a Bush sized Tax cut would take our $100/yr budget down to about $50/yr

From the Washington Post:

Republicans are demanding that Democrats extend Bush-era tax cuts at all income levels at least temporarily, not just those that primarily benefit the middle class.
You mean THESE Bush-era tax cuts?

The House Democrats, going against their traditional ideology, just passed the bill to extend the Bush Tax cuts...but only for those people making $250,000 dollars/yr or LESS.  Republicans don't like that.  They want the Bush Tax cuts (pictured above in orange) to remain where they are for people making OVER $250,000 dollars/yr.

Can the Democrats actually convey their pro-middle-class message to middle-class America?
Or will they trick it off as usual?
Even if Democrats are successful in selling this message, do you think America will "get it"?
Will the Republicans (who BTW have not taken office yet) get their way and extend the Bush Tax cuts for the Rich? And if so, will the middle-class finally see whose side the Republicans are really on?

*** UPDATE ***

Senate Republicans Block Democratic Proposal to Extend Bush Tax Cuts for Middle Class:

Republican senators, joined by a handful of moderate Democrats, led a filibuster Saturday to block consideration of two Democratic proposals to permanently extend the expiring Bush tax cuts for all but the highest earners, arguing that the Bush-era cuts should be extended for all income levels.

In a rare weekend session, senators voted 36 to 53 against moving to a House-passed bill that would have extended the Bush-era tax reductions for everyone making less than $250,000, as well as the first $250,000 of income for higher earners. That was seven votes short of the three-fifths majority (60) needed to break the filibuster. Four Democrats-- Joe Manchin of West Virginia, Jim Webb of Virginia, Ben Nelson of Nebraska, and Russ Feingold of Wisconsin-- voted with the Republicans to block action on the bill, as did Sen. Joe Lieberman, an independent from Connecticut.

Go figure.
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