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Or...why this is a good deal...

Math below the fold...

So the current deal as I understand it basically boils down to two key points:

Democrats give in on the family threshold from $250k to $450k

vs.

Republicans agree to extend unemployment benefits for 2.1 Million Americans for one more year

What this means is rich folks will see a 6% tax hike on all income above $450k instead of $250k. This will save them 6% on $200,000 or $12,000 per year.

In other words, a family making $1 Million per year will see their taxes go up by $33,000 instead of the $45,000 the President wanted. This is an increase in taxes, not their total tax bill.

A family making $5 Million per year will see their taxes go up by $273,000 instead of $285,000 as the President wanted.

In exchange, 2.1 Million Americans will see their unemployment benefits extended for all of 2013.

I understand the psychological arguments about 'caving' and setting ourselves up for whatever future evil the Republicans have in mind.

But for today, I take that deal.

Seriously, I take it, and deal with the rest later.  There is no leverage that I can see for extending these vital unemployment benefits if we go off the cliff.  The pragmatic progressive in me says get these unemployed people their money today, and get back that $12,000 per rich dude in some other way tomorrow.

My 2 cents.

Cheers

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Comment Preferences

  •  You can't do tax math (0+ / 0-)

    revisit your numbers.

  •  Is there a time limit on the tax rate cut (2+ / 0-)

    like there's a time limit on the UI extension? Or are we being asked to give a permanent tax break to $400,000 families while leaving UI open to a new hostage-taking in 12 months? If so, this is not a good deal.

    Filibuster reform now. No more Gentleman's agreements.

    by bear83 on Mon Dec 31, 2012 at 03:18:04 PM PST

    •  You are correct (0+ / 0-)

      The new threshold is permanent.

      The UI extension is 12 months.

      So if you don't think it's a fair trade, I can see your point, except I would add...

      2.1 Million people will be given one more year to allow the economy to improve enough to get them back to full employement.  Many of these people will get to KEEP their homes they might otherwise lose if we cut them off.

      and...

      We can find other ways to get the $12,000 back from everyone who makes over $250k.  Whether they be limits in deductions or increasing the SS threshold or whathaveyou, there are other ways.

      To me, I take the deal.  YMMV!

      •  If we're going to 'find other ways' (3+ / 0-)

        those other ways better be part of the deal too, because there sure as shooting isn't going to be any other way to get them separately as long as Republicans control the House, unless it's in exchange for yet another turn of the screw on poor people.

        •  Dr Erich (0+ / 0-)

          Hi!  I enjoy your diaries.

          The thing about this deal is there is nothing in it that screws poor people.

          It increases taxes at a higher threshold than I would like, but in exchange we get a vital extension to unemployment insurance.

          How do we get this extension otherwise?

          In January after we go over the cliff?  How?

          Cheers.

          •  I think so. (1+ / 0-)
            Recommended by:
            DeminNewJ

            Boehner doesn't want to deal now because he gets voted on for his speakership on Jan 3rd.  If he tries any realistic deal before then, he stands a good chance of losing that vote.  If he gets voted back in as speaker, he can immediately turn around and put something to a vote that will actually get votes from both Dems and Republicans.

            The problem with all of the 'deal' talks is that we never really know which items are in or out until they actually are ready to vote on something and it's posted on Congressional websites.

            If the only things in the 'deal' atm are tax levels from 250k to 1 mill or whatever and a UI extension, again fine, inasmuch as that goes.  But we've got a host of other issues that need dealt with as well, and the question becomes 'Where do we still have any leverage?'  Without leverage of some sort, we're going to have to let them screw over the poor elsewhere to get anything else we want.

            And, remember, 'going over the cliff', Republicans get to pretend that they're actually only 'cutting taxes' by agreeing to any deal at all that keeps any segment of Americans from returning to Bush tax rates, instead of being branded as having voted to raise taxes if they vote before the cliff.

            It's a mixed bag for them.  A lot of people will blame them for cliffdiving, but really, most of them won't ever vote for them anyway.  But if they 'go over', they're actually at least somewhat safer from RW primary challengers who will hammer them on 'raising taxes'.  So they do have some incentive to make a deal - after.

            •  The politics (0+ / 0-)

              Frankly I care less about the politics and who gets to say what vs the 2.1 Million Americans who are about to lose unemployment benefits come Wednesday morning.

              It's a big deal IMO, and I suspect it's the key #1 reason why that danged chained CPI was on the table, and it's the only reason to give in on the 400k threshold.

              How can we get these benefits extended if we don't sign a deal tonight?

              Where is our leverage Wednesday morning after the benefits expire?

              Cheers.

              •  The problem is that the politics exist whether or (0+ / 0-)

                not we care about them, and the very people who care the most about the politics are the only people who actually get to negotiate or vote on any deal.

                The leverage after is that any deal after we go over the cliff that involves keeping any American from paying more in taxes becomes a winner for Repubs.  Whereas any deal right now that involves anyone reverting back, whether above 250k or 400k, is a political loser for them.  You may not care if they get re-elected, I may not care if they get re-elected, but they sure as shooting care, and they do not want to lose their primary to some far right nutball who will turn around and lose the general to a Democrat.

                So a deal after the cliff saves face for them, and actually gives them incentive to cut a deal, even more generous of a deal than they might be willing to go for before.

                •  Yep (0+ / 0-)

                  I understand the political calculus...

                  but just a few days ago folks around here were saying bye bye to the UI extension, it was a price we would have to pay to get our message through to the Republicans.

                  I don't see how we get that back in if we let all the cuts expire.

                  Definitely we can get a tax cut passed, but why would house R's give us the UI extension?

                  Do we threaten to not sign the tax cuts unless they are included?  How do you think that will play in middle America?  My opinion is not so good...

                  To me, that's very risky...take the UI extension now IMO.

                  But clearly I am in the minority!

                  Cheers.

  •  You leave out the part (0+ / 0-)

    Where the tax cut is permanent and the unemployment extension is temporary. Absolutely unacceptable.

    "Victory means exit strategy, and it's important for the president to explain to us what the exit strategy is." - George W Bush

    by jfern on Mon Dec 31, 2012 at 04:20:47 PM PST

    •  I don't understand "permanent" (0+ / 0-)

      No snark intended.  More and more I see references to these tax changes being permanent.  Does that mean never, ever, in the history of the US can they be changed?  I've also heard 10 years, so does that mean they are unchangeable until 2023?

      Our state legislature tried to create "permanent" tax rates on the oil industry and it was deemed unconstitutional because it would limit the options of legislatures not yet elected.  Is the US Congress not constrained by those constitutional considerations?

      It seems to me that rates that change now could be revisited if, and hopefully when, a complete rewriting of the tax structure is undertaken.  Or they could technically be revisited in January, 2013 as a new Congress will be sworn in (although that would be counter productive).  Am I misinformed?

      Exactly what, if anything, are the constraints on permanent in this context?

      Thanks

      Truth is generally the best vindication against slander - Abraham Lincoln; 1864

      by Debis Diatribes on Mon Dec 31, 2012 at 04:43:30 PM PST

      [ Parent ]

    •  This is my concern. (0+ / 0-)

      No-one wants to see 2.1 million Americans deprived of their only (and arguably meager) source of income. However, fighting for an extension measured in months provides only limited relief (we certainly won't be seeing 2.1 million jobs created in that period of time), and effectively kicks the issue down the road - where it will inevitably be taken hostage by the GOP once again.

      If we are serious about this, we should seek an unemployment benefits extension with longevity - preferentially a permanent extension, but a four of five year period could be acceptable. Anything less is simply handing an already obstructionist House yet more ammunition.

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