My Compromise Proposal on Tax Cuts

[louis c]

Here's my compromise proposal.

I'm posting it here because I think someone who serves in Congress may read it.

First off, I favor the President's position of making the Bush Tax Cuts permanent for those individuals making less than $200,000 and couples making less than $250,000 a year. But allowing those tax cuts above that number to expire.

However, elections have consequences, so we have to deal with a Republican controlled House.

The Republican position is not to "increase taxes during a recession". OK. Here's my plan.

All the tax cuts stay in place and move forward into 2011. If the unemployment rate decreases to less than 7.5% and the GDP is positive for 2 consecutive quarters, taxes on those in the upper bracket ($250,000 for couples or $200,000 for an individual) go into effect and remain there.

This eliminates the argument about the recession and doesn't allow the Republicans to use this as an issue in 2012.

Awaiting DU input.

louis c

[DJ13]

1. Thats a fair idea, but doesnt tying the cuts expiration to unemployment

.... give the elites an incentive not to try and reduce the numbers of people unemployed?

[louis c]

2. Yes, but they will not bite their nose off to spite their face

I admit that I'm making this proposal as a political alternative. If we stick to our guns, all the tax cuts will expire and that will not be a good thing politically.

If we cave, we look weak and it affects our base.

This makes the most sense politically and economically.

This is as a result of procrastination when we had the votes. Now it's "let's make a deal" time.

[AnArmyVeteran]

4. Check out my plan posted below that would address the problem you mentioned.

[AnArmyVeteran]

3. How about this: (A Win-Win tax solution plan for democrats)

Eliminate tax cuts for the bottom 90%, but leave the taxes in place for the top 10%, except for the following conditions:

For every 1% drop in unemployment the top 10% get a .5% tax cut.

If the unemployment drops 2% the top 10% gets a 1% tax cut.

This would continue until unemployment was lowered to 2%.

Republicans say they believe tax cuts create jobs, so this is an incentive method to force those with capital to use their capital. Make them work for their tax cuts. It is also a direct way for democrats to attack republican claims and it gives republicans the option of wanting tax cuts or not based on the conditions above. In other words, it puts all of the burden back on republicans.

And leave this system in place so if unemployment goes back up the richest 10% get taxed at the same rate structure that I proposed above. If unemployment goes up 1% their tax rate also goes up an additional .5%.

This plan should be agreeable to members of both political parties and all American citizens. It's a win-win plan. And it would position democrats to be in total control and republicans on the defensive.

Now, if they only do something simple and rational like the plan above...

[DesertFlower]

5. i would support raising the amount

to $500,000. this way the repubs can't complain about small business being hurt.

[Lasher]

6. No, that's not a compromise.

Allowing the Bush tax cuts for rich people to continue for one day past January 1, 2011 is capitulation. Tax cuts for rich people, particularly in today's global economic environment, do nothing for the US except make rich people richer and increase the national debt. We have waited far too long to make this obvious point. Going along with Republicans' worn out trickle-down scam is a total sellout.

I'll tell you about a compromise: Let all the Bush tax cuts expire. That would be easy to do with the filibuster and veto. Now if they want to compromise, we might go along with a temporary extension for couples making $200K or less, not a penny more. Dividend, capital gains, and estate tax cuts are off the table. Take it or leave it. If Republicans want to say no to that, let them be the party that hates tax cuts.

[subterranean]

7. We're halfway there already.

GDP has been positive since the third quarter of 2009. Technically the recession is over, even though it doesn't feel that way to many Americans.

The problem with compromise proposals is the Republicans are saying they will not compromise at all. It's their way or the highway. Either they get 100% of what they want, or they force all the tax cuts to expire as scheduled. I think Obama and the Democrats should call their bluff. Obama's proposal is already a compromise.

Someone posted here earlier today that the tax cut proposal should be separated into two bills: One permanently extending the tax cuts for earnings up to $250,000, and another extending tax cuts above that level for two more years. That seems like a reasonable idea to me.

[dkf]

8. No...eventually we must get rid of all the bush tax cuts.

This is what produced a balanced budget in the past.

[Lasher]

9. Republicans will never go for splitting up the tax cut extensions anyway.

What they really care about is rich people. They won't go for this scenario because two years from now they would find themselves without a bargaining chip (holding the middle class hostage) that they have today.

Edit: Check this out

Republican Issa would reject 2-yr tax-cut compromise

Nov 8 (Reuters) - Republican Congressman Darrell Issa said on Monday that he cannot accept a potential compromise that would extend tax cuts for the wealthy for 2 years while making them permanent for everyone else.

"No I can't," Issa said on ABC's "Good Morning America" program when asked if he could accept that proposal. "Tax certainty is important and it's important for the investing class probably more than anybody else."

http://www.reuters.com/article/idUSN0820076920101108

[sweetapogee]

10. Quick questions?

Why does your plan tie the tax rate with the unemployment rate? Wouldn't it make better sense to use for example GDP or the rate of inflation? When do you see the employment rate dipping below 7.5%? Even under the best case scenario, under your plan the Bush tax cuts will be in place at least through second qtr 2012, in which case the President would be looking at a possible tax increase right before election time. What is in this plan that the pukes wouldn't love?

[MadHound]

11. No, sorry, but we need to let all the tax cuts expire

We're talking 4 trillion dollars in debt over the next ten years with these tax cuts, 3 trillion if we cut out the tax breaks for the rich.

Rather than continuing to force this country further into debt, let all the tax cuts expire, and use one trillion of that saved money to create a WPA style jobs program. The economic uptick for that will more than compensate for the money people would have to pay out in extra taxes.