Return to the Clinton Era Tax Rates?

[bjl584]

Fratto: 'Cliff' Talks and Party Like It's 1999

This has come up recently. I think that the only way this would work is if we also returned to the Clinton Era spending rates which would be something like a 37% reduction in government spending.

In the end, both sides are going to have to give up something.

[elessar78]

Ah, the expiring decade-long Bush tax cuts.

Let's cut to the chase, Boehner is beholden to the wealthy. He's not going to sell them out. He'll sell out the middle class before he sells out his and his party's donors.

Fact is, 7 of the 10 richest counties in the country voted for Obama and Progressive policies. A majority of the highest earners don't mind paying higher taxes.

Obama, while logically unsavory, can tax the top 2 percent of earners and generate a great amount of revenue. The top 2 percent can afford to pay more in taxes. Most middle class families can't even absorb the hit of going back to the Clinton rate off the bat. He can tax the top 2 percent more and still come in under what the richest were paying under the sainted Reagan.

Despite talking big, Republicans have NOT been fiscally responsible both in long and short-term situations. They ignore the fundamentals of funding whatever they choose to undertake. Reagan was lucky with the economy. Bush 1, according to Alan Greenspan, could care less about economics and the economy. Bush 2 took on massive spending initiatives AND reduced revenue.

Either way, going off the cliff or not, my family will survive. In a real way, going off the cliff is what this country needs. Going off the cliff means taxes rise (growth in revenue) and automatic, across the board spending cuts (reduce spending). But it's the shot gun approach. Everyone would rather have a controlled rise/descent but that's not always possible.

[elessar78]

To add, many will say now is not the time to go into a POSSIBLE recession, that the country can't afford it. Ideally we wouldn't but the chicken-little thing is getting old. The economy is very resilient. In recent memory we've survived the 9/11 and the Great Recession and the near collapse of the banking system (btw, news today is that the gov't has made $23 Billion off the bailout of AIG).

As Warren Buffet says, be a contrarian. Zig when others Zagging. Buy when people are getting out of the market, stocks are on sale during recessions.

[bjl584]

Obama, while logically unsavory, can tax the top 2 percent of earners and generate a great amount of revenue. The top 2 percent can afford to pay more in taxes. Most middle class families can't even absorb the hit of going back to the Clinton rate off the bat. He can tax the top 2 percent more and still come in under what the richest were paying under the sainted Reagan.

I agree with this. But, I would like to add that if taxes are raised, then the government is going to have to reign in spending to compliment it. Simply raising taxes and continuing on the same course of spending increases will accomplish nothing. If the goal is in fact to cut the deficit and the debt, then there needs to be revenue increases AND spending cuts. As you alluded to, I don't think that going off the cliff is the way to accomplish that. I'd rather see it occur in a more controlled and thought out way. Certain programs we need right now, others can be cut or eliminated, but I'd like to see our leaders all sit down at the table like adults and come up with a viable plan.

[elessar78]

Regarding spending reductions. The thousand lb gorillas in the room are defense, social security, and Medicare. Social sec is essentially self-funded. So reductions in spending have to come from the other two areas. If one looks at tw fed budget, the rest of the spending doesn't even come close to one of these three.

What can be done about these? Not much quickly. Other entitlements like cash assistance and food stamps don't add up as much as these other segments. We can focus on the little things but if the big gorillas aren't dealt with then it's pretty pointless.

Yes, we need to tighten up and police the welfare programs better so people that can work do work. But is that increasing the size if govt? We need to fix the healthcare system so there isn't so much waste in Medicare. We need to raise the age of social security since people are no longer dying at 65, like they were when it was instated.

[bjl584]

Regarding spending reductions. The thousand lb gorillas in the room are defense, social security, and Medicare. Social sec is essentially self-funded. So reductions in spending have to come from the other two areas. If one looks at tw fed budget, the rest of the spending doesn't even come close to one of these three.

What can be done about these? Not much quickly. Other entitlements like cash assistance and food stamps don't add up as much as these other segments. We can focus on the little things but if the big gorillas aren't dealt with then it's pretty pointless.

Yes, we need to tighten up and police the welfare programs better so people that can work do work. But is that increasing the size if govt? We need to fix the healthcare system so there isn't so much waste in Medicare. We need to raise the age of social security since people are no longer dying at 65, like they were when it was instated.

Yes. We should start with the big areas that literally hemorrhage money at a mind numbing pace. The little areas, well, those should be policed as well.

I guess I just see a situation in Washington where politicians are either content to do nothing out of ignorance, or they are content to simply kick the can down the road and let someone else deal with it. Big problems require hard decisions. I'm not so sure our current leaders on either side of the isle are willing to make those hard decisions.