Obama adviser warns against tax cuts for wealthy

[teko]

Obama adviser warns against tax cuts for wealthy

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By Kim Dixon

WASHINGTON | Tue Aug 31, 2010 4:10pm EDT

WASHINGTON (Reuters) - Temporarily extending tax cuts for the rich opens the door to permanent tax cuts and that is something the United States cannot afford, an economic advisor to President Barack Obama said on Tuesday.

Jason Furman, deputy assistant to the president for economic policy, said a proposed short-term extension for the rich that some economists have advocated would put the country on a slippery slope it would be tough to pull back from.

"There is a concern that (if) you extend those tax cuts for even a year, and that is a way to get a foot in the door ... and make them permanent," he told an event in Washington on the impact of tax policy on families.

Republicans want to extend the lower rates for all income classes.

Some economists and conservative Democrats point to the economy's lackluster recovery to argue for extending the cuts for the wealthy on a temporary basis, such as one year.

The lower tax rates, enacted in 2001 and 2003, will expire at year-end unless Congress acts to extend them.

Obama and fellow Democrats support renewing the lower rates for the bulk of Americans, about 97 percent, but letting them rise for individuals making above $200,000 and couples making more than $250,000.

The Obama administration has forcefully argued in recent weeks that the country can simply not afford the $700 billion 10-year price tag for extending the historically low rates of the richer classes.

"There are compelling arguments that Democrats may want to consider it, but the White House is too far down the path of making the case that it would be irresponsible" to change its stance now, said Sean West, an analyst at the risk consulting firm Eurasia Group.

The Senate is expected to take up the issue when it reconvenes next month. Many don't expect action before November congressional elections, where the issue is sure to be on voters' minds.

"There is no clear sign that either side has won the argument yet," West said.

Two recent polls put the issue in Obama's favor. Surveys by CNN and CBS found majorities favoring the Democratic stance, while a Reuters/Ipsos poll found voters favoring the Republican position.

A poll this week by the National Association of Business Economics found 54 percent of that group back extending all the lower rates, while about 45 percent favored either letting them all expire or just extending them for the so-called middle class and under groups.

[brice1967]

Too correct in saying that corporate America is running the country.  I totally believe that private industry can thrive, and the economy can thrive as well. I know that I pay more than my share of taxes.... in fact, when I look at my pay stub it almost makes me want to puke thinking that if every American is taking the tax a$$ whipping I am taking, how can we be in the rocking boat we are in?  The fact of the matter is, tax breaks on the wealthy are killing us.  Why shouldnt someone making more money than I am be paying more taxes?

[teko]

Yeah, the other excuse is they dont want to rock the boat as our economy is too fragile. Well, I say end the tax cuts and let the chips fall where they may! No more power by the big banks is what I say! What they really mean is, if we do not bow to corporate interests and the rich they will not come out and play (hire) until we say were sorry!  Nope, lay it on me!

I would rather live under a bridge than let them have their way. It is not a tax hike, merely going back to paying their fair share which they were doing before the cuts. But lets scare the beejeebies out of people and call it a tax hike. Sounds better politically doesnt it?

[flmagi]

Yes, some people are unhappy about it because they're told to be unhappy about it. Some people think it's socialism, spreading the wealth or they believe in "trickle Down" economics. Trickle Down economics doesn't work, the past 10 yrs. proves that. Those that think it's socialism, do not know what socialism means. And it's not spreading the wealth, unless those ultra wealthy are gonna send their tax money directly to me. That would be nice!
This nation is no longer controlled by the government or the people. We are controlled by the wealthy and the corporations.

Franklin D. Roosevelt in an April 29, 1938 message to Congress warned that the growth of private power could lead to fascism:

    The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.

[adgal]

I don't even understand this.  People are unhappy about it?  Huh?

[teko]

Can you even believe this is even an issue? I mean come on people! I have heard those that say, give em their tax cuts so they will hire? Well, it has not worked so far has it? So to continue these cuts are all of a sudden going to make a difference? Not hardly! They should never have been implemented to begin with if you ask me. I would gladly give up my tax cuts as well if that is what it takes to make them fall off for the upper what 3 percent. Do they think we are stupid or what?

[flmagi]

I definitely agree with Obama's plan to extend the tax cuts for 97% and dropping it for the wealthiest 3%, especially considering the wealthy 3% have about 95% of the US wealth.

[teko]

IMO, this should have never happened in the first place and has helped get us where we are. The cuts did nothing to improve our econemy obviously, so how will letting them expire not be beneficial?