The election is over, but now our country faces another big moment. Behind closed doors, some members of Congress are trying to arrange a “grand bargain”—and some are insisting on extending tax cuts for the richest 2 percent of Americans while cutting Medicaid, Medicare and Social Security benefits.
Who would be impacted by these decisions in Washington?
Working Americans like Kristen from Nashua, New Hampshire, a single mother. Because her son was born very sick, she relied on a federally funded program run through Medicaid, for several months to pay for the health care her son needed. Without it she would have been bankrupted by her son’s medical bills.
Social Security has kept afloat middle-class families like Dan’s from Tucson, Arizona. Dan supports his son's family with his Social Security payments because his son has cancer and can't work. Dan’s son has a wife and three kids who would struggle to deal with steep medical bills on top of day-to-day expenses if Social Security is cut.
People like Kristen and Dan have done everything right. They followed the rules, chipped in and paid their fair share. But they still come up short. They are not asking for a handout or looking to shirk their responsibilities. The facts of life are that sometimes our families need programs to serve as a support network to help us get back on our feet when life throws us the unexpected.
We need to protect the programs our families depend on, not cut them. We can and must make our health care system more cost-effective, but simply shifting costs to individuals is not a solution.
However, this is being drowned out by the financial hypocrisy of corporate CEOs and politicians who argue that we can’t afford to maintain benefits for these programs if we want to balance the budget and cut deficits. The same people who say they are serious about lowering the deficit are the most stubborn about giving away more tax cuts to the richest 2 percent. Who are the people advocating for this approach? Shadow groups like “Fix the Debt,” a responsible-sounding organization whose members are heads of big companies who would benefit mightily from some of their key proposals. The 63 “Fix the Debt” companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system” that is an incentive for companies to move operations offshore. Under this system, companies would not have to pay U.S. federal income taxes on their offshore earnings.
The truth is, all this “grand bargain” talk isn’t about the deficit. It’s a political ploy to use deficit hysteria to implement the policies of the past—the policies of giving more and more tax breaks to the wealthy while cutting benefits for the poor and middle class. This isn’t the way to make progress. From lost jobs to cuts to our schools, health care and public safety, regular Americans have already sacrificed enough.
It’s time we asked the richest 2 percent to pay their fair share and start focusing on jobs and real economic security for all.
Some of our representatives, like Paul Gosar, need to tell us where they stand on this issue. Will you give away more tax cuts to the richest 2 percent of Americans and tell middle class families “you’re on your own?” Or will you stand with working families and advocate for an economy that works for all? We are counting on Congress to do the right thing.
• Richard Trumka is president of the AFL-CIO, and Rebekah Friend is a Mesa resident and executive director of the Arizona AFL-CIO.
mnjcpa posted at 2:21 pm on Thu, Nov 29, 2012.
bluepoet - Spot on!
Cerulean - Seriously, turn off the media and read from credible sources. When almost HALF of the country pays NOTHING, why is there even any discussion about what's fair or not for them? Common sense would answer that question. And if soaking the rich prevails, it only covers 8 DAYS of government spending.
Why don't you demand of the Obama administration to focus on the REAL problem - out of control unsustainable spending?
Bluepoet posted at 1:44 pm on Thu, Nov 29, 2012.
Mnjcpa,
Oh, yes, I agree with you on the manipulation, and the insignificance of raising taxes on the rich. But, again, that's not necessarily a manipulation of the Liberals. My contention is that this would be happening, no matter Liberal or Conservative. The people manipulating this information, or misinformation rather, are supporting both major parties, whether openly or under the table. They enjoy the infighting, much like a lot of us enjoy a good football game, or wrasslin' match. They enjoy the ability to crash whole markets, and then claim "stimulus" money--assuring getting paid twice. And, I assure you-these are people who don't work at all...only the aimless boredom of old, inherited money could produce such misery. The aristocrats of the autocratic royalty--right here in the good ol' US of A.
Can I produce some names? Nope...no proof whatsoever. I'm just following the money...the first clue is, who has the money? Both Liberals and Conservatives have money, after all...If A, then B, etc...
By the way, if the Conservatives were in power, they'd be manipulating us with talk of lower taxes, while raising revenues through rising insurances costs, sales tax, union busting, prison expansions, and privatizing everything, including the military. In effect, we (middle class) would still be paying out more, and more, and more, while still losing jobs, to third world countries, and widening the gap between poverty and plenty.
Either way, we are being manipulated. It's just a matter of where one is, on the food chain, in the Hunger Games...
Cerulean posted at 1:41 pm on Thu, Nov 29, 2012.
I will reference an earlier remark section for my last comment:
JNelson said, “only those in the lower income tax brackets have ever really been taxed close to the maximum applicable rate.”
H.L. Mincken, as outlined by Rich, “Democracy is a pathetic belief in the collective wisdom of individual ignorance."
mnjcpa said, “Liberals argue that tax revenues from the wealthy increased simply because the rich got richer. And so they did.”
Yesterday mnjcpa added “Tax credits are reserved for people that pay nothing. . . Many studies show that these people already pay the lion's share of tax, with upwards of 50% paying nothing.”
mnjcpa posted at 10:41 am on Thu, Nov 29, 2012.
bluepoet,
I appreciate your point of view and it's great to see that you had experience with how difficult it is to run a business. Most people in this column breeze right past this important point. My intentions are simple - to clarify the truth about taxes.
There's no doubt the middle class is hurting. But the answer to that problem is a robust economy that you're not going to get under Obama.
Manipulation of Americans by the liberal press - in particular the NY Times School of Taxation - twisting the tax system to get people to believe untruths.
The liberal press is running a 24/7 news cycle ginning up resentment against wealth and those that rightfully earn it. The revenue raised sticking it to the rich would only run the government for 8 days. That's right - 8 days.
So why in the world is there so much media attention to such a insignificant amount of revenue? Maybe it's to not educate Americans to the REAL problem.
The middle class has been killed by the massive amount of government spending and how that affects what a dollar will buy. Obama won't touch this issue because then he has to talk about the real problems with our economy - unfunded liabilities of social security & medicare of over $220 TRILLION. Top that off with Obamacare and it only leads me to believe that Democrats want the economy to collapse.
There is all out ASSAULT on the private sector. I appreciate hard working people, regardless of how they work. What I can't stand is manipulation of Americans by the liberal press.
Bluepoet posted at 9:22 am on Thu, Nov 29, 2012.
mnjcpa,
I guess we'll just have to disagree with each other, on this one. Having never amassed more than $50k in gross income for a year, I admit I have little empathy for someone making three times that, and having to "somehow make ends meet", whether they are working hard, or not. Working hard is not any sort of indicator of wealth, anyway. It's simply working hard. I work hard, for my living, and I have even tried running my own business, back when I had the energy to do so. I'm fully aware of what it takes to do that, because I tried it, for several years. However, I don't blame my failure at success on the government, even though the taxes were outrageous, at the time. I blame it on myself, and I learned from the experience, and moved on to other things. I also think it's too simplistic to call the government "Liberal", and therefore inept. There are, after all Liberal and Conservatives who work hard, pay taxes, or not, and are rich, poor, or somewhere in between. The only common thread of ineptness in government is it's perverted love affair with the rich and powerful.
VotReason, I don't know where you got the idea I thought $125k a year was done "so easy"...I was merely responding to a scenario, and questioning the math.
However, to answer your insipid remark, if everyone took chances, worked hard, and tried to amass wealth, who would be left to implement the grandiose plans of those who amass the wealth? Ah, just those darn freeloadin' poor people.
Right? American Dream, indeed...
mnjcpa posted at 7:53 am on Thu, Nov 29, 2012.
EnRaged - Not sure how repeating quotes from commenters furthers any discussion. Let me start with a simple business lesson.
Gambling has NOTHING to do with taking financial risk in a business. Paying people in the military has NOTHING to do with financial risk in a business.
Again with your original thinking.
Engaged Voter posted at 5:28 pm on Wed, Nov 28, 2012.
"How there can even be a discussion of what's fair or not when almost half of the country pay ZERO income taxes. How is paying nothing fair?"
Ask our combat troops currently deployed how "fair" they think it is.
Remember, troops on combat deployment pay ZERO income taxes.
(are you going to call them lazy welfare addicts too?)
"with the performance of the stock market the last 20 years, they would be lucky to have their initial investment"
Yes, gambling is always risky, so don't do it if you can't afford to lose the money.
Cerulean posted at 2:51 pm on Wed, Nov 28, 2012.
VofReason, As a point of why Arizona’s Charter Schools don’t work. Charters do not have the same restrictions as public schools and therefore “Daniel Sauer, the company’s president and CEO and a shareholder, is also an unpaid officer of the Great Hearts Academies non-profit.
Since July 2009, the schools have made $987,995 in purchases from the company.”
mnjcpa should know all about this type of ‘small business’ shenanigans.
See: http://www.azcentral.com/news/articles/20121016insiders-benefiting-charter-deals.html?nclick_check=1
VofReason posted at 1:43 pm on Wed, Nov 28, 2012.
This union guy is really laying it on heavy. I think we would all agree that the "examples" he states are exactly what SS and Medicaid should be their for. Where we disagree is that 47% of America now falls into the "need" group. That is "the point".
VofReason posted at 1:41 pm on Wed, Nov 28, 2012.
Cerulean says "In less than four years Arizona has spent $987,995.00 on books from a religious educational book store, http://educationalsales.com/ " as a point of why education doesn't work. Isn't it the people in education who decide where to spend this money? I think you have just tripped over "the point". Many belive that education gets enough money, they just spend it wrong.
Bluepoet makes it sound so easy to amass 125K through taking risk and working hard enough to run your own business. Hmmm? Maybe everyone should work hard, take risks and try to amass money. That would almost be like the American Dream of old.
mnjcpa posted at 1:22 pm on Wed, Nov 28, 2012.
People that earn $125k still have bills to pay Bluepoet. But even if they were frugal and put 50% of their earnings in savings, with the performance of the stock market the last 20 years, they would be lucky to have their initial investment. Contrast that with someone that's employed by a labor union - private, education, or governmental that gets a GUARANTEED benefit for life. A simple finance calculation will prove these people retire in their 50's as millionaires.
Increasingly there is little reason for someone to take on personal financial risk to start a business. Our government is inept because it's run by liberals.
Bluepoet posted at 12:47 pm on Wed, Nov 28, 2012.
Am I missing something, in the $125k, after tax scenario?
I mean, after less than 10 years, they'd be millionaires, right?
Ok, even after 20 years, if they spent (lived on) just half that $125k a year, they'd still be millionaires, and still be less than 50yrs. old.
Comfortable, indeed...
Not having a viable job, or insurance..that's FINANCIAL RISK!
And, having a job that doesn't even pay enough to be taxed? That's not freeloading, that's indentured servitude to those who are "comfortable", and it's why our education system is on a regression curve...our government is inept, because it's run by rich people, for rich people, not by the people for the people.
mnjcpa posted at 11:58 am on Wed, Nov 28, 2012.
Seriously Cerulean I'm not sure where you've been led astray.
FINANCIAL RISK is the first thing any investor views in an investment decision whether you buy a share of Apple or you put your own money at risk to run a business. It's a simple concept covered in first year finance. If a business owner takes on the risk of putting their own money at stake to run a business, they should expect a return over and above that cost by 20-30%.
And you're also wrong about credits and deductions made for upper income taxpayers. Over the last 20 years `phaseouts` have eliminated many deductions for upper income taxpayers. Tax credits are reserved for people that pay nothing or illegals even get on the sham of redistribution - last year $7 billion alone. Many studies show that these people already pay the lion's share of tax, with upwards of 50% paying nothing.
You're still the one full of garbage, not Bill.
Cerulean posted at 10:40 am on Wed, Nov 28, 2012.
“When you risk your own money, as small business owners do, their return should be substantially more.” Why?
Just because you risk (take a chance to either gain or lose) should not qualify you for “substantially more” . If you risk and gain then that is your reward.
In actuality, by the time they take every tax credit under the sun, they are one of the most fortunate in the world to have $125k.
Bill is full of garbage.
mnjcpa posted at 10:08 am on Wed, Nov 28, 2012.
No Bill is NOT full of garbage Cerulean. You are.
Most of the people in that income range are small business owners. They don't have union type pensions that make them millionaires at 50. If god forbid they make a profit, by the time they pay every tax under the sun they're lucky if they keep $125k. Now they try to emulate one of those pensions that school teachers and labor unions derive with GUARANTEES. All of this to try to achieve the American dream which is all but lost in America, particularly with people that have values upside down thanks in large part to the Obama administration and the media. When you risk your own money, as small business owners do, their return should be substantially more.
The only reason our education system is inept is it's run by the government.
Cerulean posted at 9:37 am on Wed, Nov 28, 2012.
Rich said, “Educating a child costs three times what it cost fifty years ago, and the child isn't educated as well.”
In less than four years Arizona has spent $987,995.00 on books from a religious educational book store, http://educationalsales.com/
That is why all of us spend more on education, only to recognize that our children and are less educated.
Cerulean posted at 9:32 am on Wed, Nov 28, 2012.
Bill in east Mesa is full of garbage. “First, $250,000 makes a couple comfortable, NOT rich these days.”
The wealthiest town in Arizona is Paradise Valley. The average annual household income in Paradise Valley is LESS THAN HALF of $250,000. 00
The average household income in Phoenix is $43,000.00 a year.
mnjcpa posted at 7:41 am on Wed, Nov 28, 2012.
What it also means Dale is that labor unions are extinct by their structure.
They eliminate competition and the jobs they secure or Carnegie employed have been replaced with technology. What comes with this evolution is that you can't make a laborer a millionaire at 50 and expect to stay in business - precisely why GM had to be bailed out. This type of `freebie` is rampant today where hard work and putting your own money at risk is vilified and why we're looking just like Greece.
Dale Whiting posted at 7:50 pm on Tue, Nov 27, 2012.
Guess what ladies and gentlemen? Both management and labor are humans. Both do considerable good, as well as considerable harm. Once I praised Andrew Carnegie for being a great phlanthropist and the union representative I was talking with explained that Andy was generous, very generous with the money he made off of cheap labor. At the time I did not know he was a union representative in a Pittsburg steel mill. The mill was closed years ago!
The point of this article is that though unions are at an all time low in clout, the solutions we need to seek must not be Carnegie solutions. We've heard too much from the 1% lately. Clearly we did not choose either Carnegie or Romney this election cycle!
Rich posted at 7:06 pm on Tue, Nov 27, 2012.
The Kyklos:
Government is a human invention, not a naturally occurring phenomenon. It proceeds from anarchy to the strongest taking control, tyranny or dictatorship. As they pass this along to their children, the strongest, smartest, best are no longer in control, plutocracy or monarchy. As monarchy loses effectiveness the ruled rise up and replace it with some form of democracy. Democracy deteriorates rather rapidly, breaking into class warfare, until even the household pets have rights, and it all falls back into anarchy. Government is an unnatural state, in order to manage it, it has to be limited. We have failed to do this despite a nation created by brilliant men who tried. And this is just another group (Democrats, Republicans, labor, Tea Party, ad nausium) to add their crapola to an ever increasing agenda of anarchy. Educating a child costs three times what it cost fifty years ago, and the child isn't educated as well. A doctor visit costs twelve times what it did fifty years ago and it doesn't seem to be enough. You are told what seats to put in your car, what insurance to buy, when to cut your lawn. Barry McGuire was dead right.
mnjcpa posted at 4:08 pm on Tue, Nov 27, 2012.
Not sure a solution is attainable StotheizzE. Certainly not with Republicans, Democrats, and the media or with a constituent content on electing people that promise them free stuff. Seems we've lost what the value of liberty means.
I know this. The tiny sum that taxing the rich does to our deficits in compared to the effect of budgetary deficits of $1 trillion + a year and the Fed's artificial manipulation of the economy is NO COMPARISON.
Spending reform - massive amounts of it - must be done to remain solvent and the media gives ZERO attention to this. Unlikely under Obama.
The middle class hasn't been hurt by someone else not paying their fair share. How can that be a decent argument when they pay zero? The middle class is killed because the dollar has depreciated so badly from massive printing of money. A dollar doesn't buy the same thing today as it did even two years ago.
THIS is what our elected officials should be talking about not vilifying success.
StotheizzE posted at 2:15 pm on Tue, Nov 27, 2012.
So what's the solution, mnjcpa? Cuts only? Hack medicare down to nothing? Get rid of food stamps, or any kind of public assistance?
Even that will not be enough.
mnjcpa posted at 1:47 pm on Tue, Nov 27, 2012.
DonMey is exactly right on the tax rates and why the debate is so stupid. His comment ` Yet Americans in the top quintile, who earned 51 percent of the nation's income, paid a whopping 67.9 percent of all federal taxes."
How there can even be a discussion of what's fair or not when almost half of the country pay ZERO income taxes. How is paying nothing fair?
mnjcpa posted at 1:41 pm on Tue, Nov 27, 2012.
Stotheizze - The `baloney` is Buffett's motives of taking a position on tax, not his business acumen. The man's brilliant in the private sector, but he's exactly what Obama lovers love to despise - the 1%.
I'm in the tax field for 20 years. Buffett's got outstanding litigation fighting the IRS for back taxes, retains dividends - to shift the tax rate to capital gain treatment, doesn't draw a salary to avoid ss& med tax. I can list at least 10 other ways he avoids tax. I don't know whether it's to shape the media's opinion of him by appearing kind and benevolent, but I call BS when I see it.
The biggest piece of the budget pie is social security and medicare, and the unfunded liability is over $220 trillion. There aren't enough taxes to deal with that imbalance.
StotheizzE posted at 12:49 pm on Tue, Nov 27, 2012.
I'd be happy to have a helping of the baloney that Buffett is so full of, since the man created an empire through this 'baloney'.
We all have differing opinions about what's fair, so no plan is ever going to make us all think everyone is paying 'their fair share.'
As far as cuts go, what is the biggest piece of the budget pie? The military? If you truly want cuts only, we'll have to start by looking at the military budget and start cutting.
DonMey posted at 12:12 pm on Tue, Nov 27, 2012.
So what exactly is a "fair share" for the top 2%?
"One reasonable yardstick might be the average rate paid when all federal taxes -- including not just income taxes but also payroll taxes -- are considered. The Congressional Budget Office reported last month that in 2009, the top 20 percent of taxpayers paid an average of 23.2 percent of their income in federal taxes -- more than double the 11.1 percent paid by the middle quintile, and 23 times the 1 percent paid by the lowest quintile. Even within the top 20 percent, average tax rates rose with income: The richest 1 percent paid 28.9 percent of their earnings in federal taxes.
Or perhaps a more reasonable yardstick would compare the share of federal taxes paid with the share of national income earned. The CBO ran those numbers too. In 2009, the bottom 20 percent of taxpayers earned approximately 5 percent of the nation's income but paid just 0.3 percent of all federal taxes. Households in the middle quintile, which earned almost 14.7 percent of national income, paid only 9.4 percent of federal taxes. Yet Americans in the top quintile, who earned 51 percent of the nation's income, paid a whopping 67.9 percent of all federal taxes."
mnjcpa posted at 12:10 pm on Tue, Nov 27, 2012.
Buffett's full of baloney Stotheizze. He manipulates the tax system better than most in a variety of ways. Retaining dividends in Berkshire, suing the IRS for a billion in back taxes. Buffet isn't some kind benevolent business man. He's got some kind of back door deal with Obama. All this talk about the 1%? You're right - it casts too wide a net to include people at $250k.
All this talk about what's fair, what's not is further dividing the country. I want to hear what's going to be cut?
Regarding Hostess. The deal they were offered was stellar and they declined. Labor unions are one of the worst organizations in America today operating not too differently than terrorists. They eliminate competition forcing prices that are non-competitive. Workers doing routine, repetitive work is gone due to technology and can't expect to retire a millionaire in their 50's.
Accuracy posted at 11:57 am on Tue, Nov 27, 2012.
Questions by Richard Trumka and Rebekah Friend: “Will you give away more tax cuts to the richest 2 percent of Americans and tell middle class families “you’re on your own?” Or will you stand with working families and advocate for an economy that works for all? We are counting on Congress to do the right thing.”
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With the so-called fiscal cliff – that will take place in January – President Obama and the Democrats say they want to “RAISE TAXES” on households earning more than $250,000. While Republicans say they'll consider tax increases, but only if entitlement and tax reform are on the table.
Obama’s way – combination of higher taxes and increase in the government's debt ceiling – certainly is not the right thing to do.
StotheizzE posted at 11:10 am on Tue, Nov 27, 2012.
First, Leon, the union didn't bankrupt the company, poor company leadership did. Look into how much money the company leadership made in the last couple years, Leon, then come back and comment on how the union was responsible for the problem.
Second, I'm with Bill on the $250,000 making you comfortable, not rich. I agree with what Warren Buffett said, which was something like taxing a person's income below $1 million at one rate, tax their income of $1-$10 million at a higher rate and then $10 million and above at 35 percent or something like that.
Bill in east Mesa posted at 10:51 am on Tue, Nov 27, 2012.
First, $250,000 makes a couple comfortable, NOT rich these days. Any tax rate increase should be on those at $1 million and above. Second, the day after any tax increase on the "rich", the rallying cry from the unions will be to have the "rich" pay their "fair share". IT NEVER ENDS. I'm an independent that believes that ALL politicans are 3 steps below the common street prostitute and that goes for union LEADERSHIP as well. It makes sense that we hold elections in November as that is traditionally the time we pick out our turkeys.
Leon Ceniceros posted at 9:57 am on Tue, Nov 27, 2012.
This coming from the AF of L - CIO Union Leader who's ....BAKERY, CONFECTIONERY, TOBACCO WORKERS and GRAIN MILLERS UNION....just bankrupted ....HOSTESS BRANDS.....and put ....18,300 workers out into the street. Not only did this UNION...ruin the lives of these 18,300 workers but also the suppliers, the clerks, secretaries, car and truck suppliers, packaging and box manufacturers, janitorial and cleaning suppliers, neighborhood restaurants and stores where these former employees lived and worked.
AND YOU WONDER WHY THEY CALL THE NORTHEAST STATES OF AMERICA THE ........."RUST BELT".
DID ...US STEEL COME BACK UNION STRIKES.....DID BETHLEHEM STEEL COME BACK FROM UNION STRIKES....THE ANSWER IS NO ....THEIR PLANTS ARE NOW RUSTING AWAY.....THE UNION PENSIONERS WERE LUCKY TO GET 10CENTS ON THE DOLLAR OF THEIR PENSIONS.......ASK YOUR SELVES, UNION MEMBERS..........FOR WHAT.....THE UNION LEADERS ARE ALL MILLIONAIRES (THANKS TO YOUR UNION DUES)....THEY AREN'T LIVING ON WELFARE OR SOCIAL SECURITY............JUST YOU....THE UNION MEMBER.