Can or will the tax cuts be repealed in the new Congress?

[terrya]

Silly me...I have this dopey idea that we can't have a war in Iraq, a "war on terra", shovelling even more money into the Pentagon while giving trillions to the ultra-wealthy in tax cuts. After all, until Bush, this country has NEVER cut taxes during a war. Now that the American people have come to their senses this week, is there any chances that the new Congress could address the seriously damaging deficits that we're accuring right now?

Forgive me for sounding like a "tax loving liberal", but the national debt is $9 trillion and counting. Hell, I'm not exactly a spendthrift, but even *I* have learned to be more responsible with my finances.

[SheilaT]

1. They need to be phased back

in so that people don't totally freak.

One thing about estate taxes, is that while there is a large exemption up front (or used to be, don't know if they're totally repealed at this point) the problem has always been that then they kick in at a very high rate. If I were in charge I'd start them after about a million dollars of taxable estate, and then max out at perhaps 25%. People would still keep three-quarters of Mom and Dad's money, blanket exemptions for family farms and businesses can easily be written into the law, and everyone who dreams of inheriting large sums of money will still do so.

They also need to do something about the Alternative Minimum Tax, which I understand is a nightmare. Don't think it's ever hit us, but I might not really know since we never do the IRS paperwork, but farm it out to an accountant. Ideally, the tax structure would be simplified so that tax accountants would go out of work, but that will never happen. If members of Congress had to do their own taxes with no outside help except being able to call the IRS help line, we'd get a simplified tax structure so fast it would make the speed of light look pokey.

[endarkenment]

2. What people?

The tax cuts, the shitty ones that are costing us an arm and a leg, helped a very small number of very wealthy people. Normal folks do not benefit at all from the estate tax repeal, for example. The billionaires can totally freak and quite frankly I don't give a damn.

[SammyWinstonJack]

21. I heard a Dem Congressman say that 80% of taxpayers received 15% savings while

the other 20% received 85% savings. :wow: If true, that's certainly not fair, imho.

[DaveJ]

22. That sounds right

Since 20% have 85% of the money.

[One_Life_To_Give]

5. Complex Tax code is to hide benefits for special interests

Ideally, the tax structure would be simplified so that tax accountants would go out of work

Problem is far too many have good reason to keep the code as a giant complex document. It allows them to bury all kinds of little goodies for various special interests. If they ever had to make the tax code fit on 3 pages, they wouldn't be able to pander anymore.

[Warpy]

6. Two million bucks this year

I don't know the amount next year. The tax dies in 2010, then gets pushed back to the 2001 level in 2011.

I expect the streets of Palm Springs and Aspen to run red with blood in December, 2010.

The exemption needed to be raised, at least indexed to inflation since the last time it was set. Dropping it entirely is a lunatic idea.

[SheilaT]

10. I was under the impression

that recently the estate tax was completely eliminated, or at least that the sunset provision -- what you've just referred to -- won't happen. Unless the law changes, obviously.

And I do understand to what extent the very vast majority of people do not ever have to pay estate taxes. But I've often been surprised at those who honestly seem to think -- despite the fact that they won't ever stand to inherit any significant money -- that it's a terrible thing. Of course, that's very much the result of recent years of misleading ads about "Death taxes" and totally erroneous claims that family farms are lost, and so on. It's only a tiny percent of all estates that pay any taxes at all, but so long as average people are convinced that somehow they are hurt by such taxes, it will have an effect far beyond what it should have.

[Warren DeMontague]

11. The reality is, with real estate values as they are in places like California

A LOT of people stand to be hit with a $1 Million Exemption on the Estate Tax, and perhaps have to sell the family home--- to pay the taxes on it. That's not erroneous or misleading, that's reality.

That's why the exemption should be raised permanently, even though IMHO the tax should not be done away with entirely. And that's why our Senator Barbara Boxer, hardly a right-winger by anyone's estimation, shares that same position.

Edit: Also, FYI, as of right now the 2010 sunset provision still stands.

[SheilaT]

13. Thank you for clarifying some

stuff for me.

It's already at $2 Million per person, which means a married couple can pass $4M tax free right now.
Keep in mind that spouses get to pass unlimited estates tax-free, which is of course one more reason why gay marriage should be allowed.

So if kids inherit a home worth $4M, I'm hard pressed to feel pity that the "family home" need be sold to pay taxes.

I think an exemption not above $2-4M per person would be reasonable. And tax any additional at a reasonable rate.

Heck, I should be complaining bitterly about estate taxes because my in-laws died too soon to have their entire estate exempt from taxes, so I do know from personal experience.

I'd raise the gift exemption. At the moment I believe it's $12,000, having been $10,000 for a very long time. I'd raise it to perhaps $20,000.

Oh, well. No matter what I won't be personally writing any of this legislation.

[Warren DeMontague]

14. Right. As of this year it's $2M per person, I think.

But in 2011, as things stand, it'll go back down to $1M. Which is why Senator Boxer and others agree the exemption should be raised -from $1M- permanently. And although I'm not an expert, I think the estate tax rate is something like 50%, above the exemption. I'm not so sure that's a reasonable rate, particularly when you're talking about businesses and homes people might have to sell to pay the tax.

It's also worth bearing in mind, while I agree 100% about Gay marriage, that not everyone wants to or should need to get married. So claiming that the exemption is "really" 4M because everyone should be married to take advantage of it doesn't hold water. If someone wants to be single, should they be discriminated against when it comes to inheriting the family business or home?

But that said, I think raising the exemption permanently to 2 or 3 Million is probably the most fair, inflation and real estate values-wise, and I suspect that's probably what we'll end up with.

[SheilaT]

16. I understand that there is simply

not a case of family farms or businesses being sold to pay estate taxes. That's the Big Lie that goes along with the "Death Tax" propaganda.

And it is true that a lot of people choose not to get married, but if they have such a large estate that they're going to be subject to estate taxes they should be getting the best possible advice and planning that they can. I've personally seen the down side of a (straight) couple not getting married, such as no Social Security benefits to the survivor, being thrown out of a joint residence, and so on. Getting married is a legal commitment that confers certain benefits. In reality, it simply is not possible to structure taxes so that single people and married people get exactly the same benefits. As a culture we make a decision about which we want to value more. I recall quite clearly when there was a "marriage tax", and then that was changed. Back then the operating assumption was that a wife was probably stay at home, or if she worked made significantly less than her husband. While those circumstances still exist, a lot of couples are two-career couples who make just about the same amount of money, which alters the equation a lot.

I do absolutely agree with you about what the exemption should be raised to. 2-3 Million per person would still be a healthy sum to pass on.

[Warren DeMontague]

19. There's propaganda on both sides.

People want to call this the "Paris Hilton Tax Cut"... look, it hasn't hit me personally, but I live in the Bay Area, and I know plenty of people whose real estate values have gone through the roof in the past couple decades. And they're not Paris Hiltons.

I don't think their kids should have to sell the house upon their folks' death unless that's what they want. Again, I suspect that's why Barbara Boxer sees the need to raise the exemption. She's from Marin, ferchissakes.

But it sounds like you and I are pretty much on the same page. Raise the exemption, but don't ditch the tax entirely. I suspect that's what we'll end up with, anyway.

[Warpy]

18. I don't think anyone disputes that the exemption needed to be

raised, but eliminating it is fiscal suicide.

Boxer is right about this one, or at least she agrees with ME. :evilgrin:

[Warpy]

17. They tried to sneak the elimination of the estate tax

into that disgraceful bill that would have raised the minimum wage to what it should have been three years ago but not until three years hence.

Naturally, it didn't pass. The GOP didn't want to give a working stiff an honest deal and the Democrats didn't want to bankrupt the government beyond the damage the other reckless tax cuts have done.

[Warren DeMontague]

20. I agree, it was disgraceful.

I'm on the same page as Sen. Boxer and you- raise the exemption, but don't ditch the tax entirely and certainly don't try to screw, say, wait staff and tip-dependent workers out of the Minimum wage in the process! (That was the worst part of that particular bill, as I understood it)

[Warpy]

3. You think they can get a veto proof majoirity in both houses?

Keep dreaming.

The best we can expect out of this Congress is a host of investigations as to where all the money has been going, into election racketeering, and a strong defense in committees against GOP judicial nominees who just happen to be anti American and nuts, to boot.

[endarkenment]

4. Bush (idiot, criminal) can veto anything out of congress.

And will veto any tax increases. Luckily most of the worst of the tax cuts expire all on their own. So gridlock will default to the restoration of the estate tax, to the consternation of billionaires everywhere.

[ThomWV]

7. Are You Kidding? Have You Seen The Debt? Of Course Taxes Will Rise

[KSU Wildcat]

8. Taxes should be raised equally

across the board. As far as inheritance tax, there should be no exemptions. The first dollar on up should be taxed.

[newyawker99]

9. Hi KSU Wildcat!!

Welcome to DU!! :toast:

[Warren DeMontague]

12. I'd like to get some real audits on where our $380 Billion in Iraq has gone!

And while we're trying to figure out how to balance the budget, it'd be nice to remind the people that we spend $40 Billion a year- NOT including the cost of our highest per capita rate of incarceration of non-violent offenders in the Industrialized world- on a "drug war" aimed MOSTLY at pot smoking. Perhaps if the American People REALLY thought about it, they might decide that it's really not worth $40 Billion a year to keep Willie Nelson (and various assorted cancer-ridden grannies) from smoking weed.

[warrens]

15. Tax cuts for the rich and corps are going to be rescinded

Or at least allowed to expire. Or there's going to be trouble. This is going to be highly contentious, but the fact that the wingnuts are already lying about it is a good sign. I doubt the average American is going to shed too many tears, which is why the wingnuts are trying to say we're going to raise middle class taxes.

[Blue-Jay]

23. It's not a question of being repealed.

Most of the tax cuts need to be renewed, as they were temporary.

Will they be renewed? Nope. And you can guarantee that the republicans will use that vote for actual fiscal responsibility will be spun as "the Democrats raised your taxes" in the next election.