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Thread: Letting a Tax Cut Expire....Tax Increase or not?

  1. #1

    Letting a Tax Cut Expire....Tax Increase or not?

    We were told repeatedly by one of our brightest JI Poli-Sci minds that allowing a Tax cut to expire at the end of it's legislated lifespan, i.e. choosing not to re-up that tax cut, is NOT a tax increase. That argument was amde repeatedly and often in regards to the Bush/Obama Tax Cuts for the "Rich".

    However, I am confused now, because yesterday the president repeatedly described the Social Security/Payroll Tax cut ending as "raising taxes".

    I hope someone can help me here, because this game of terminology gets so confusing at times.

    1. Is it a tax increase to let a tax cut expire, or not? Or does it depend on which party supports it?

    2. If we cut the payroll tax again (re-up), are we taking money out of Social Security? I heard this was calling 'stealing from the lockbox, stealing from middle class and eledery Americans" in the past, whats different now?

  2. #2
    when he says that, Obama is playing by the rules that the right wing set down. in political message terms it is a tax increase, although technically not true, it's what people believe.

    I also believe he doesn't necessarily want this tax cut forever but he is playing politics with the GOP, forced to either raise taxes or compromise with the President. They want to do neither, as they are a party in the midst of a 3 year temper tantrum.

    we shouldn't forget that permanent tax cuts are alot harder to legislate into law. The losses in revenue must be offset in the budget.

    these temporary measures, designed to expire, are easier to pass. So they are temporary and they all should expire. even the payroll tax cut.

  3. #3
    [QUOTE=bitonti;4266125]when he says that, [B][U][COLOR="Red"]Obama is playing by the rules that the right wing set down[/COLOR][/U][/B]. in political message terms it is a tax increase, although [B][U][COLOR="red"]technically not true[/COLOR][/U][/B], it's what people believe.[/quote]

    So you're calling the President a Right-Wing Playbook Playing Liar who is playing politics with the tax code then?

    Hope.

    Change.

    Lol.

    ;)

  4. #4
    [QUOTE=Warfish;4266086]We were told repeatedly by one of our brightest JI Poli-Sci minds that allowing a Tax cut to expire at the end of it's legislated lifespan, i.e. choosing not to re-up that tax cut, is NOT a tax increase. That argument was amde repeatedly and often in regards to the Bush/Obama Tax Cuts for the "Rich".

    However, I am confused now, because yesterday the president repeatedly described the Social Security/Payroll Tax cut ending as "raising taxes".

    I hope someone can help me here, because this game of terminology gets so confusing at times.

    1. Is it a tax increase to let a tax cut expire, or not? Or does it depend on which party supports it?

    2. If we cut the payroll tax again (re-up), are we taking money out of Social Security? I heard this was calling 'stealing from the lockbox, stealing from middle class and eledery Americans" in the past, whats different now?[/QUOTE]

    A government by and for the rich should be paid for by the rich. Obama believes in big government that takes care of fat cats and that the fat cats should pay for it. I agree.

    When we have a government that is for all the people, all the people should pay for it.

    The President is an elitist who supports the elite with policy. It's only fair that the richest 1/100th of 1 percent the President has bailed out should pay more.

  5. #5
    [QUOTE=Warfish;4266086]We were told repeatedly by one of our brightest JI Poli-Sci minds that allowing a Tax cut to expire at the end of it's legislated lifespan, i.e. choosing not to re-up that tax cut, is NOT a tax increase. That argument was amde repeatedly and often in regards to the Bush/Obama Tax Cuts for the "Rich".

    However, I am confused now, because yesterday the president repeatedly described the Social Security/Payroll Tax cut ending as "raising taxes".

    I hope someone can help me here, because this game of terminology gets so confusing at times.

    1. Is it a tax increase to let a tax cut expire, or not? Or does it depend on which party supports it?

    2. If we cut the payroll tax again (re-up), are we taking money out of Social Security? I heard this was calling 'stealing from the lockbox, stealing from middle class and eledery Americans" in the past, whats different now?[/QUOTE]

    All campaign politics from the campaigner in chief.

  6. #6
    [QUOTE=Warfish;4266086]We were told repeatedly by one of our brightest JI Poli-Sci minds that allowing a Tax cut to expire at the end of it's legislated lifespan, i.e. choosing not to re-up that tax cut, is NOT a tax increase. That argument was amde repeatedly and often in regards to the Bush/Obama Tax Cuts for the "Rich".

    However, I am confused now, because yesterday the president repeatedly described the Social Security/Payroll Tax cut ending as "raising taxes".

    I hope someone can help me here, because this game of terminology gets so confusing at times.

    1. Is it a tax increase to let a tax cut expire, or not? Or does it depend on which party supports it?

    2. If we cut the payroll tax again (re-up), are we taking money out of Social Security? I heard this was calling 'stealing from the lockbox, stealing from middle class and eledery Americans" in the past, whats different now?[/QUOTE]

    1.) Paying more taxes than previously is a tax increase. Both parties will try and get around that when it fits their agenda.

    Closing any of the "loopholes" that both parties shy away from specifically identifying.. Tax increase.

    Allowing reductions in taxes in expire... Tax increase.


    2.) I admit to being less than fully educated on the specifics on how funds from payroll taxes are administered... but yeah, i think it's hard to characterize anything that reduces them as not "taking from SS/Medicare. Now if you put the money back via other funding (taking it from the rich guys), the bill in it's entirety could be neutral to entitlement funding. But calling on a party to vote for a tax increase, to prevent a tax increase, because they pledged not to vote for tax increases... is... damn, it's brilliant politics.

  7. #7
    [QUOTE=Winstonbiggs;4266152]A government by and for the rich should be paid for by the rich. Obama believes in big government that takes care of fat cats and that the fat cats should pay for it. I agree.

    When we have a government that is for all the people, all the people should pay for it.

    The President is an elitist who supports the elite with policy. It's only fair that the richest 1/100th of 1 percent the President has bailed out should pay more.[/QUOTE]

    Let's see if I understand.
    Obamacare is for the rich. So are payroll deduction cuts. Extended unemployment. Tuition loans. Welfare. Head Start. Free school lunches. Medicaid. Mortgage relief. Cash for clunkers.
    All Fat Cat programs?
    Almost hald the people out there pay zero federal tax. There should be a minimum for all. Start with 5% of the gross maybe. Close loopholes for people like hedge funds (see Warren Buffett) who get away with murder. Old Warren is not generating jobs anyway.

  8. #8
    [QUOTE=palmetto defender;4266205]Let's see if I understand.
    Obamacare is for the rich. So are payroll deduction cuts. Extended unemployment. Tuition loans. Welfare. Head Start. Free school lunches. Medicaid. Mortgage relief. Cash for clunkers.
    All Fat Cat programs?
    Almost hald the people out there pay zero federal tax. There should be a minimum for all. Start with 5% of the gross maybe. Close loopholes for people like hedge funds (see Warren Buffett) who get away with murder. Old Warren is not generating jobs anyway.[/QUOTE]

    He doesn't take care of all the rich guys just the ones that bundled money for him.

  9. #9
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    If the original tax cut was designed and designated as temporary, then it is not a tax increase when it expires. If you hold the position that the expiration is indeed an increase, then you should also hold the position that the original cut was deceitful.

  10. #10
    [QUOTE=palmetto defender;4266205]Let's see if I understand.
    Obamacare is for the rich. So are payroll deduction cuts. Extended unemployment. Tuition loans. Welfare. Head Start. Free school lunches. Medicaid. Mortgage relief. Cash for clunkers.
    All Fat Cat programs?
    Almost hald the people out there pay zero federal tax. There should be a minimum for all. Start with 5% of the gross maybe. Close loopholes for people like hedge funds (see Warren Buffett) who get away with murder. Old Warren is not generating jobs anyway.[/QUOTE]

    TARP, GM bailout, Fannie and Freddie bailout. The inflating of stocks and other assets held by the rich.

  11. #11
    [QUOTE=parafly;4266253]If the original tax cut was designed and designated as temporary, then it is not a tax increase when it expires. If you hold the position that the expiration is indeed an increase, then you should also hold the position that the original cut was deceitful.[/QUOTE]

    Is it not simpler to hold the position that the tax cut designed as temporary, then was designed to result in a tax increase (back to "normal" levels) when it expires? When i approach a stop sign, my speed decreases, when i leave the stop sign, it increases. The stop sign at no point deceived me or my vehicle.

  12. #12
    [QUOTE=Winstonbiggs;4266263]TARP, GM bailout, Fannie and Freddie bailout. The inflating of stocks and other assets held by the rich.[/QUOTE]

    You're making my point. GM was to benefit the UNIONS. Fannie and Freddie were to benefit homeowners. Irresponsible ones who defaulted.
    The banks paid back most/all of the loans.
    Inflating of stocks by the rich? Really? My portfolio on paper is worth 2 1/2 mill less than 3 years ago. You have a very positive perspective on "infalting of stocks held by the rich".
    Advice: take a look at the Dow 30 stock by stock and performance over the last 3-6 years. Good learning experience. Btw, I really didn't get hurt too much since I invest for income not growth at this point.

  13. #13
    [QUOTE=Warfish;4266143]So you're calling the President a Right-Wing Playbook Playing Liar who is playing politics with the tax code then?

    Hope.

    Change.

    Lol.

    ;)[/QUOTE]

    I dont care about hope or change all I want is competance.

    And if you read my post you'll find another area where I disagree with OUR President. The tax cuts should be allowed to expire. Anyone who cares about the size of our deficit should also want this to happen.

  14. #14
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    [QUOTE=Axil;4266300]Is it not simpler to hold the position that the tax cut designed as temporary, then was designed to result in a tax increase (back to "normal" levels) when it expires? When i approach a stop sign, my speed decreases, when i leave the stop sign, it increases. The stop sign at no point deceived me or my vehicle.[/QUOTE]

    A better analogy would be the DOT putting a 35 MPH zone in the middle of a larger 45 MPH zone with every intention of drivers ultimately going the original speed. At the end of the day, there is a zero net increase in speed.

    In my mind, a tax increase is either a new tax or a rate increase on an established tax. The presumption is that the original tax cut never would have occurred without the stipulation of an expiration.

  15. #15
    [QUOTE=palmetto defender;4266309]You're making my point. GM was to benefit the UNIONS. Fannie and Freddie were to benefit homeowners. Irresponsible ones who defaulted.
    The banks paid back most/all of the loans.
    Inflating of stocks by the rich? Really? My portfolio on paper is worth 2 1/2 mill less than 3 years ago. You have a very positive perspective on "infalting of stocks held by the rich".
    Advice: take a look at the Dow 30 stock by stock and performance over the last 3-6 years. Good learning experience. Btw, I really didn't get hurt too much since I invest for income not growth at this point.[/QUOTE]

    Government policy has been to inflate assetts that's a fact. Assetts are primarily held by the wealthy. That's also a fact.

    Your portfolio has been pushed ahead dramatically by government policy as has real tangible assetts held by mostly the upper middle class. With the exception of extended unemployment benifits, government policy has barely impacted the working class.

    Don't talk about TARP being paid back when banks are putting toxic assetts on to the backs of the public through the FDIC. It's complete BS that TARP has been paid back. The public is still holding the bag through the FDIC which should be fire walled away from this crap.
    Last edited by Winstonbiggs; 12-06-2011 at 12:33 PM.

  16. #16
    [QUOTE=parafly;4266334]A better analogy would be the DOT putting a 35 MPH zone in the middle of a larger 45 MPH zone with every intention of drivers ultimately going the original speed. At the end of the day, there is a zero net increase in speed.

    In my mind, a tax increase is either a new tax or a rate increase on an established tax. The presumption is that the original tax cut never would have occurred without the stipulation of an expiration.[/QUOTE]

    Actually they do quite a bit of the speed limit zones signage in Georgia and parts of SC. An excelllent revenue generator.

  17. #17
    [QUOTE=parafly;4266253]If the original tax cut was designed and designated as temporary, then it is not a tax increase when it expires. If you hold the position that the expiration is indeed an increase, then you should also hold the position that the original cut was deceitful.[/QUOTE]

    It's semantics. It's a tax increase from "year before the cut expired". It is not a tax increase from "expected taxes in year after the cut expires". In a broad sense, it has the same economic effect as a tax increase - in that people will have less money in their pockets and will likely spend less - but also a different economic effect, in that as a scheduled change in tax rates, it can be planned for in advance (not that anyone does).

  18. #18
    [QUOTE=Winstonbiggs;4266339]Government policy has been to inflate assetts that's a fact. Assetts are primarily held by the wealthy. That's also a fact.

    Your portfolio has been pushed ahead dramatically by government policy as has real tangible assetts held by mostly the upper middle class. With the exception of extended unemployment benifits, government policy has barely impacted the working class.

    Don't talk about TARP being paid back when banks are putting toxic assetts on to the backs of the public through the FDIC. It's complete BS that TARP has been paid back. The public is still holding the bag through the FDIC which should be fire walled away from this crap.[/QUOTE]


    That is a lot of socialist crap. I have assets because I: 1. worked my ass off and 2. am smart. I'm wealthy and I earned it.
    My portfolio is pushed ahead? Did you read my comment? $2 1/2 mill down is now ahead? Sound like a real financier talking. More Obama nonsense.
    My portfolio relative to value is still well ahead of acquisition prices? Why? Because I make sound investments (mostly) in quality comapnies that do good things. Some of these companies I worked for.
    You would know more if you were more involved. I am. Most borrowed money has been paid back. Period.
    And I "partially" itemized just some of the Federal government giveaways to the American public. Let's not forget the 48% ZERO payers. Further lower level taxpayers pay no tax or capital gains or dividends.
    My position is and will always be - if you are poor it's your own fault. There are just a couple exceptions like becoming disabled or incurring a crippling disease.
    We get what we deserve as far as success.

  19. #19
    [QUOTE=parafly;4266334]A better analogy would be the DOT putting a 35 MPH zone in the middle of a larger 45 MPH zone with every intention of drivers ultimately going the original speed. At the end of the day, there is a zero net increase in speed. [/quote]

    I'm not sure i understand your analogy 100% Are you talking about speed-traps, where the intent is to make a quick buck?

    [quote]
    In my mind, a tax increase is either a new tax or a rate increase on an established tax. The presumption is that the original tax cut never would have occurred without the stipulation of an expiration.[/QUOTE]


    The tax rate will increase next year, when compared to this year, if the tax cuts expire. The tax rate will not increase when compared to the rates before the tax cut. We all understand that. But when people talk about taxes being raised... it's implied that you're comparing a new rate to the current rate.

    The issue here is that "raise taxes" has become such a politically charged phrase that we can't call a spade a spade anymore.

    Here perhaps is a better example. I have children. I pay less income taxes because of my children. When one my children turns 18 (yes i know in some circumstances 24) i will no longer be able to claim them as a dependent, and my taxes will [b]increase[/b] Now i know that's going to happen, it's perfectly fair, we're all (pretty much), ok with that... but it doesn't change the fact that my taxes will increase versus the year prior.

    Expiring tax cuts, are tax increases, the argument ought to be whether or not they're justified, wanted tax increases.

  20. #20
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    [QUOTE=Axil;4266401]I'm not sure i understand your analogy 100% Are you talking about speed-traps, where the intent is to make a quick buck?




    The tax rate will increase next year, when compared to this year, if the tax cuts expire. The tax rate will not increase when compared to the rates before the tax cut. We all understand that. But when people talk about taxes being raised... it's implied that you're comparing a new rate to the current rate.

    The issue here is that "raise taxes" has become such a politically charged phrase that we can't call a spade a spade anymore.

    Here perhaps is a better example. I have children. I pay less income taxes because of my children. [B]When one my children turns 18 (yes i know in some circumstances 24)[/B] i will no longer be able to claim them as a dependent, and my taxes will [B]increase[/B] Now i know that's going to happen, it's perfectly fair, we're all (pretty much), ok with that... but it doesn't change the fact that my taxes will increase versus the year prior.

    Expiring tax cuts, are tax increases, the argument ought to be whether or not they're justified, wanted tax increases.[/QUOTE]

    Or when your income gets to high to be allowed to that the credit for kids.

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