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Alternative Reality.
Author: Raine
Date: 12/15/2010 15:46:45
I really have nothing today. I can't write another blog trying to convince people that the tax 'deal' is better than doing nothing. So, having said that-- let's allow the voices of others to give it a go.
To begin with, we have Robert Reich, (no link, he was a guest on Hardball and said he would reluctantly support the compromise) Al Franken, Steny Hoyer, and even Sherrod Brown realizing the reality that this is better than the alternative. From Senator Franken: Regarding that payroll tax holiday: No, it's not a step in dismantling Social Security. For those who haven't heard, this is a meme in some progressive circles. Ezra Klein wrote last week: This is the reality. SOMETHING must be done. There are a LOT of really good things here in this 'compromise'. Then there is this, something that Scoop linked a few days ago: There is a lot of good information there.
Do I need to remind you there is NO estate tax this year? You really think it will be brought back under a GOP controlled legislature? Under this plan it comes back. This is important. Trust me, if you are reading this blog, its return won't effect you.
It seems that people are just plain pissed that the Bush tax cuts are being extended. I am too, but considering the alternative, can't we hang on for 2 more years? I am stunned that the middle class is willing to give up tax cuts for those that need them in order to punish the rich. This is the very definition of cutting off one's nose to spite their face. This is where the rubber meets the road, and choices have to be made. I want my family and friends to keep their tax cuts; I don't know rich people. I want my friends and family to be able to have unemployment benefits so they can at least buy food. The Dems in Congress failed us. They could have done something about this months ago. The President has come up with something that DOES help. That's more than the GOP has offered up.
This deal is not what I wanted, but doing nothing is worse. I know I can't convince you if you have already made your mind up, but I can ask you to reconsider knowing what the alternative really is.
and 
Raine
To begin with, we have Robert Reich, (no link, he was a guest on Hardball and said he would reluctantly support the compromise) Al Franken, Steny Hoyer, and even Sherrod Brown realizing the reality that this is better than the alternative. From Senator Franken:
“There's a lot in here to help create jobs and to help middle-class Minnesotans weather this recession: tax cuts for working families, a payroll tax holiday, energy tax credits, and the extension of Recovery Act initiatives that are already making a difference. And a lot of harm would come to working families if unemployment insurance isn’t renewed. So I’m voting for this reluctantly and will continue to fight passionately to get our economic policies on the right track.”
The tax deal cuts employee-side payroll taxes by two percentage points in 2011. This won't harm Social Security, or at least it shouldn't harm Social Security, because the money will just be replaced by general fund revenues (confused yet?). All in all, that should mean Social Security emerges unscathed.
But some liberals are understandably concerned that the payroll cut will be extended indefinitely. Then Social Security loses part of its long-term funding. And then what? More benefit cuts? Privatization?
I say, bring it on. Cutting payroll taxes and replacing them with general fund revenues is appealing in two ways. First, payroll taxes are much more regressive than income taxes. Second, I'm actually fine with breaking the sanctity of Social Security's closed funding loop. A lot of liberals disagree with me on this point, but hear me out.
The diary points out a number of things, one of which is that this will further reduce the social security fund – something that I initially thought as well. But this is not true – monies would be shifted from the general fund to cover the amount of money the social security tax would otherwise take in – something that was already done for the new hire credits in the HIRE Act earlier this year..
Don’t want to believe that Obama will do this (as one commentator said to me)? Fine. But let’s not say that he will further reduce the fund when the only example to date confirms that money will not be further depleted from the social security fund.
Do I need to remind you there is NO estate tax this year? You really think it will be brought back under a GOP controlled legislature? Under this plan it comes back. This is important. Trust me, if you are reading this blog, its return won't effect you.
It seems that people are just plain pissed that the Bush tax cuts are being extended. I am too, but considering the alternative, can't we hang on for 2 more years? I am stunned that the middle class is willing to give up tax cuts for those that need them in order to punish the rich. This is the very definition of cutting off one's nose to spite their face. This is where the rubber meets the road, and choices have to be made. I want my family and friends to keep their tax cuts; I don't know rich people. I want my friends and family to be able to have unemployment benefits so they can at least buy food. The Dems in Congress failed us. They could have done something about this months ago. The President has come up with something that DOES help. That's more than the GOP has offered up.
This deal is not what I wanted, but doing nothing is worse. I know I can't convince you if you have already made your mind up, but I can ask you to reconsider knowing what the alternative really is.
and Raine
