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Shuts and Failures

by Michael Maiello

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Are Democrats... Fighting?

by Michael Maiello 7/25/2012 - 6:40 pm   |

Interesting action in the Senate today.  The Republican plan to extend the Bush-era tax rates for everyone failed and the Democratic plan to extend them for all household income up to $250,000 a year succeeded*.  Now the House is expected not to vote on, or to vote down the Democratic proposal and will likely pass the Republican one.  The bill will then go to the Senate, where Reid and company will replace it with the Democratic plan that the Senate passed and send it back to the House.

Ultimately, John Boehner will have to decide if he and his caucus really want to argue that if the rich pay more, so must everyone else.  They'll also be arguing that lower tax rates for the rich are so important that the entire economy must confront the deflationary "fiscal cliff," until it learns its lesson.

Seems like deft Democratic legislative maneuvering.  I can hardly believe it.  What am I missing?  How does Team D. screw this up?

Oh, and I know Joe Lieberman is kind of a non-issue these days but guess which side he voted with?  Can you believe we ran that guy for veep just 12 years ago?  Well, I can.  But he's why I traded my vote to a liberal Floridian and voted Green.

*NCD pointed out, quite correctly, that sloppy writing like "for all people making under $250,000 a year" is misleading. 

Because of the way progressive tax rates work, every American gets these tax rates on that level of income, whether they are a tycoon or middle class or working poor.  If anything, anyone who doesn't make at least $250,000 has cause for complaint as the person who made $1 million get the full benefit of this while the person who makes $50,000 gets only a fifth of the benefit.*

The Bush era tax cuts are being extended to all families, not "only for families making below $250,000".

The tax cuts are rising on income above $250,000, all families still have the same tax cut on income up to $250k. For instance, a family making $255,000 will have a small tax rise, only on the $5,000 over the $250k cutoff.

Does seem the Democrats are finally developing some realistic strategies to confront the con artists and liars of the GOP. I also like Obama's ads on Romney.

by NCD 7/25/2012 - 10:08 pm

Sorry, yes, bad phrasing.  Should be, "for all income up to $250,000."  I'll fix it.

by Michael Maiello 7/25/2012 - 10:36 pm (re: NCD)

They should couple the restoration of the old tax rates for the rich with big and bold new spending proposals.  If the Dems continue to promote the taxes as a means to attack the spurious debt problem, and then follow through on that by holding the line on spending, then the resulting fiscal contraction might indeed constitute a "fiscal cliff" - or at least a fiscal slope.  We need sustained fiscal expansion and dramatic government activism to escape from the decade of stagnation that is staring us in the face.  We don't need more debt hysteria.

by Dan Kervick 7/25/2012 - 10:17 pm

The bill passed 51-48. TPM reports Jim Webb joined Lieberman in voting against it. I can't quite see why the Republicans dropped their filibuster threat, unless they convinced themselves Reid had only 49 votes. Oops.

This victory is, as you say, only symbolic -- but what a symbol! The Republican majority in the House is exposed as the final obstacle to a continuing middle-class tax cut. Obama should start running ads denouncing the "tax-and-spend" GOP. Worth doing for the chuckle alone.

by acanuck 7/25/2012 - 10:19 pm

Seems to me that what happened was that the GOP is just looking to get some election ad material for swing states (and in the House, later, swing districts;) Becker & Cox at the "Floor Action Blog" at The Hill:

The votes came following a topsy-turvy morning of legislative maneuvering in which Minority Leader Mitch McConnell (R-Ky.) consented to allowing straight up-or-down votes on the two tax plans. The Senate had been scheduled to hold a procedural vote on just the Democratic plan, which would have needed 60 votes to advance.

McConnell, speaking on the Senate floor, suggested his move was meant to smoke out vulnerable Democrats, and make them put their cards on the table. “The American people should know where we stand,” McConnell said. “Today they will.”

by artappraiser 7/25/2012 - 10:23 pm

AP Business reporter with the view that that is basically what both parties were doing; that both bills are only minor tinkering for 2013 for symbolics for the election (the Dems on the high end and GOP on things like EIC and college cost deductions) and do not deal with the amounts both parties they have to get to by 2014:

Despite the high-wattage political theater over taxes dominating Congress these days, there's a lot of consensus between the two parties over what should happen in the short term. In a campaign season dominated by the limp economy -- and with neither party eager to boost taxes on voters so close to the elections -- Democrats and Republicans want tax cuts for most Americans to continue through 2013 while lawmakers try to reduce the federal debt and overhaul the tax code.

"The broad range of tax cuts set to expire are ones both parties want to continue. The debate is over a fairly narrow but very symbolic range of taxpayers," said Robert Bixby, executive director of the bipartisan Concord Coalition, which favors controlling budget shortfalls.

by artappraiser 7/25/2012 - 10:36 pm (re: artappraiser)

Lord save us from the Concord Coalition - one of the worst exports from my home state.

by Dan Kervick 7/25/2012 - 10:40 pm (re: artappraiser)

Yeah, I saw McConnell's "smoke them out" rationale. But it looks to me like a total miscue. The Republican "tax cuts for all" bill went down in flames, with Scott Brown and Susan Collins crossing party lines.

And now the Senate Democrats are on record as having "passed" -- not enacted, but passed -- legislation that could mean thousands of dollars in savings for more than 90% of taxpayers.

All they have to do to pocket those savings is for enough of them to vote in a Democratic Representative in November to replace their current GOPer. If I'm a Democratic candidate, that's my bumper sticker.

by acanuck 7/25/2012 - 10:38 pm (re: artappraiser)

Yep. They're actually fighting.

by Doctor Cleveland 7/25/2012 - 10:30 pm

Definitely symbolic

Don't you have to make money, in order to pay taxes?

It is rumored;  Walgreens, Best Buy and other corporations are already talking of cutting wages next year.

Is this how we compete on the global scale; corporations cut our wages?

Doesn't wages cut = less taxes? 

Just wondering.

by Resistance 7/26/2012 - 8:12 pm

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