

Senate-Passed Deal Means Higher Tax on 77% of Households - pebb
http://www.bloomberg.com/news/2013-01-01/senate-passed-deal-means-higher-tax-on-77-of-households.html

======
jere
Let's be clear here. The deal means the bush era tax cuts remain for most
people (a 3 percentage point reduction for most brackets), while we lose a
temporary payroll tax for 2%:
[http://www.bloomberg.com/news/2012-11-28/breaking-down-
the-c...](http://www.bloomberg.com/news/2012-11-28/breaking-down-the-cliff-
the-bush-tax-cuts.html)

If I understand correctly, that means taxes should still be about 1% lower
than they were during Clinton.

I love how every time a _temporary_ tax cut expires, we call it a "tax hike."
I don't see how we can ever fix the debt if no one is willing to pay more
taxes and no one is willing to lose benefits.

~~~
Steko
The bottom line is taxes are going up from what people paid two weeks ago.
Calling that a hike is not disingenuous to me. It's a bit linkbaity, yes. The
payroll tax holiday was a stimulus measure that was never meant to be
permanent, yes. We should not compound the long term issues with social
security by chronically underfunding it, yes.

It's a hike and one I'm perfectly happy to live with. As a commenter at
metafilter put it:

 _Well, it's that or more ice floes to put the old folk on, and the ice
industry isn't making any production gains either._

~~~
jere
>The bottom line is taxes are going up from what people paid two weeks ago.
Calling that a hike is not disingenuous to me.

I'm not so sure. If a company has a huge sale for 1 month and everything is
temporarily 50% off, we don't call it a 100% "price hike" the next month.
Maybe it's just me, but hike has a very specific connotation that isn't
appropriate here.

~~~
chimeracoder
> If a company has a huge sale for 1 month and everything is temporarily 50%
> off, we don't call it a 100% "price hike" the next month.

No, but if they had that "sale" for over 10 years, rather than one month, then
you might call it a price increase.

~~~
jere
You do realize the payroll tax cut only lasted 2 years, right? Not only that,
but I'm fairly certain it was enacted partly to counteract the recession,
which by definition should only be temporary.

In the context of historically low taxes (the top rate used to be 94% and is
now 35%), I think the sale analogy is much more apt.

------
outside1234
I'll probably be unpopular, but it should be 100% of households.

We are in denial that we can have all of the benefits we want and not raise
taxes. The choices we have is:

A) Cutting Medicare B) Cutting Social Security C) Cutting National Defense D)
Raising Taxes

Everything else is noise. Choose some combination of A-D.

My choice is a 35% cut in C and D to cover the rest.

~~~
abduhl
Cutting national defense entirely while raising taxes to 100% on the entire
population would still mean a budget deficit by the middle of the 2030s due to
the rate of growth of our social programs.

~~~
onezeno
Do you have a source for that?

------
jonhinson
The article makes it sound like the bill explicitly raises taxes on 77% of
households. This would be false. The bill simply does not extend the
_temporary_ tax holiday that was signed into law at the end of 2010. The
payroll tax rate goes back to the rate we've had since 1990.

~~~
smsm42
"Your Honor, the prosecutor makes it sound as if I killed that man with a
brick. Nothing could be farther from the truth - I just let the brick go, and
some time later, completely independently from my actions and completely
beyond my control, the brick fell onto the victim's skull and crushed it. I
simply failed to extend my temporary holding over the brick, which I never
promised to hold forever, by the way, and fully intended to let it go at some
point. Clearly, I can accept no blame for this unfortunate incident and am
completely innocent".

There was a tax reduction in 2010 and there is a tax hike in 2013. How adding
word "temporary" to it changes anything?

~~~
jonhinson
I was simply commenting on the semantics of the article. The wording in the
title and body claims this bill is the cause of the temporary tax cut
expiring. That would be disingenuous. The cause of this "tax increase" is the
fact that the original legislation made it temporary. This bill has nothing to
do with "...[raising] taxes on 77.1 percent of U.S. households..."

~~~
smsm42
Of course the bill is the cause. If they didn't want the tax to raise in 2013,
they'd make it permanent in 2010 or extended the current levels in 2012. They
did not, which means they fully intended for it to happen exactly like it
happened. E.g., have taxes for 77% of households be higher in 2013 then they
were in 2012.

------
codegeek
An interesting read related to Medicare issues. It says that on average,
_"Medicare couple pays $109,000 into the program and gets $343,000 in benefits
out"_

[http://www.nytimes.com/2013/01/01/opinion/brooks-another-
fis...](http://www.nytimes.com/2013/01/01/opinion/brooks-another-fiscal-
flop.html?_r=0)

------
IgorPartola
For reference, here is the 2013 US federal budget [1]. Make sure to sort the
spending table by the Total column.

[1]
[http://en.wikipedia.org/wiki/2013_United_States_federal_budg...](http://en.wikipedia.org/wiki/2013_United_States_federal_budget#Total_revenues_and_spending)

------
geogra4
Endlessly frustrating that there is such vindictive zeal on the right for
pushing the faces of the poor into the dirt.

~~~
thisisdallas
Endlessly frustrating that there is such vindictive zeal on the left for
pushing the face of the economy into the dirt by refusing to cut spending.

~~~
Steko
If only the right could control the presidency and both houses of congress
we'd finally see spending get under control right?

~~~
smsm42
We would probably have less rampant abuse, though if Bush times is an
indication of anything, the right can definitely be tempted by debt spending
also, just in less egregious quantities. But I'd take Bush-level deficits
(400bn) over Obama-level (1trln+) any day.

~~~
Steko
Obama's deficits are caused by the depression bush brought us (decreased tax
revenues -> deficit) and the continued unfunded wars, tax cuts and Medicare D
program.

[http://www.forbes.com/sites/jasonoberholtzer/2012/02/01/obam...](http://www.forbes.com/sites/jasonoberholtzer/2012/02/01/obama-
vs-bush-breaking-down-the-deficit/)

~~~
smsm42
Of course Bush is to blame for everything. It's not like Obama had control
over the budget for 4 years now and did nothing to reign in spending. Here I
was naively hoping there's some point where blaming Bush has to stop. Of
course it will never stop.

>>>> decreased tax revenues -> deficit

This is only partially true - IIRC, CBO estimates are about 24% of the Bush-
era deficits were caused by tax cuts. The rest is spending increases and tax
revenue falling short of previous expectations (i.e. would happen with or
without tax cuts, and without tax cuts would probably be more severe as tax
cuts were observed to decrease tax avoidance). The difference between 400bn
and 1trln can not be explained by tax cuts.

~~~
Steko
"It's not like Obama had control over the budget for 4 years now"

Because he's a dictator?

"and did nothing to reign in spending. "

Slowest increase in spending since Eisenhower?

"Here I was naively hoping there's some point where blaming Bush has to stop.
Of course it will never stop."

Because it will never stop being true that he's responsible for the current
fiscal mess? I'm sorry it's an 'inconvenient truth" for you that Bush sucked
and got us in this mess.

"The rest is spending increases and tax revenue falling short of previous
expectations"

This is actually what I meant by decreased revenues. My full quote as you can
see is:

"decreased tax revenues -> deficit) and the continued unfunded wars, tax cuts
and Medicare D program."

So perhaps that could have been punctuated better but it's not hard to see
that I was making the distinction between the tax cuts and the decreased
revenues due to recession/depression.

~~~
smsm42
>>>> Because he's a dictator?

Because Bush was a dictator, yes. Obama is the same level of dictator as Bush
were.

>>>> Slowest increase in spending since Eisenhower?

"Reigning in" does not mean "increase". Especially when we have trillion
deficit. If you have budget in surplus - fine, increasing spending may be kind
of OK. If you have trillion deficit - "we are deep in the hole, but we keep
digging slower" is not enough.

>>> I'm sorry it's an 'inconvenient truth" for you that Bush sucked and got us
in this mess.

Bush sucked 4 years ago. This mess is still with us and only got worse since.
I understand Obama can not be blamed for anything because he is the Saint
Lightworker, but I still can't take it seriously. If you blame Bush for Bush
time, blame Obama for Obama time. Otherwise you just sound like an apologist.

