We are about to witness the final weeks of the 111th Congress as they wrap up final legislation heading into 2011. The LameDuck session has plenty on their plate. Kinda like what I did at our family gathering on Thanksgiving.
So, I discovered a link online today from the Coffey Party website pointing out the PolitiFact article on the "Bush Tax Cuts". I decided to just paste what I could because, well, enough people in the area actually do spark up this conversation that maybe a little added exposure might help those of us who have to engage in this daily.
Top 5 falsehoods about the Bush tax cuts
By Angie Drobnic Holan
After lots of talk and debate about extending the Bush tax cuts, it's now crunch time:
The lower rates are scheduled to expire on Dec. 31 unless Congress acts to extend them.
President Barack Obama supports making the current tax rates permanent for most Americans, but he wants to let the lower rates expire for couples that make more than $250,000 or individuals who make more than $200,000. Many Republicans say the tax cuts should be made permanent for everyone. Lately, though, different compromise measures have been floated. One idea is to make the tax cuts permanent for the middle-class and extend them temporarily for higher incomes. Another option would be to pass a two-year extension for everyone. Still other options call for repealing the tax cuts for the wealthy and giving tax breaks to employers who create jobs. We'll have to wait and see what sort of bill Congress actually votes on.
President Barack Obama supports making the current tax rates permanent for most Americans, but he wants to let the lower rates expire for couples that make more than $250,000 or individuals who make more than $200,000. Many Republicans say the tax cuts should be made permanent for everyone. Lately, though, different compromise measures have been floated. One idea is to make the tax cuts permanent for the middle-class and extend them temporarily for higher incomes. Another option would be to pass a two-year extension for everyone. Still other options call for repealing the tax cuts for the wealthy and giving tax breaks to employers who create jobs. We'll have to wait and see what sort of bill Congress actually votes on.
In the meantime, we have fact-checked many claims on the tax cuts and we've noticed some falsehoods keep getting repeated. So here are our top 5 falsehoods, plus a few runners-up.
• "Should Democrats get their way,every income tax bracket will increase on Jan. 1, 2011. Every single one." We've noticed that those who favor extending all the tax cuts will sometimes say that their opponents want to see all the tax cuts expire. But this is not the case. It's not President Barack Obama's position, nor of the Democratic leadership in Congress. And some Democrats think it might be a good idea to extend the Bush tax cuts for everyone, at least until the economy has recovered. Rep. Mike Pence, R-Ind., said this one, and we rated his statement False.
• "Ninety-four percent of small businesses will face higher taxes under the Democrats' plan." Republicans often say they're opposed to the tax increases because they will hit small businesses, but the numbers don't really support that. Under the Democratic plan, a small business owner would have to report profits of more than $250,000 before the tax increases kicked in. (Rates would rise for the top two brackets, from 33 percent to 36 percent and from 35 percent to 39.6 percent.) But most small businesses aren't nearly that profitable. In fact, Internal Revenue Service data shows that of all taxpayers who declare business income, only 2 to 3 percent declare that much. We rated this Pants on Fire when Rep. Randy Neugebauer, R-Texas, said this back in August.
• Small businesses that have "$250,000 in gross sales for the business ... They're the ones that are looking at massive tax increases." This is another variation on the claim that tax increases will hit small business. This statement is wrong because gross sales are all the money a business takes in. Under longstanding IRS rules, businesses get to deduct most expenses before reporting their final taxable income. That includes things like employees' pay, supplies, a car or truck, fuel costs, advertising, and more. Rep. Michele Bachmann said this on Nov. 16, and we rated it Pants on Fire.
• "Should Democrats get their way,every income tax bracket will increase on Jan. 1, 2011. Every single one." We've noticed that those who favor extending all the tax cuts will sometimes say that their opponents want to see all the tax cuts expire. But this is not the case. It's not President Barack Obama's position, nor of the Democratic leadership in Congress. And some Democrats think it might be a good idea to extend the Bush tax cuts for everyone, at least until the economy has recovered. Rep. Mike Pence, R-Ind., said this one, and we rated his statement False.
• "Ninety-four percent of small businesses will face higher taxes under the Democrats' plan." Republicans often say they're opposed to the tax increases because they will hit small businesses, but the numbers don't really support that. Under the Democratic plan, a small business owner would have to report profits of more than $250,000 before the tax increases kicked in. (Rates would rise for the top two brackets, from 33 percent to 36 percent and from 35 percent to 39.6 percent.) But most small businesses aren't nearly that profitable. In fact, Internal Revenue Service data shows that of all taxpayers who declare business income, only 2 to 3 percent declare that much. We rated this Pants on Fire when Rep. Randy Neugebauer, R-Texas, said this back in August.
• Small businesses that have "$250,000 in gross sales for the business ... They're the ones that are looking at massive tax increases." This is another variation on the claim that tax increases will hit small business. This statement is wrong because gross sales are all the money a business takes in. Under longstanding IRS rules, businesses get to deduct most expenses before reporting their final taxable income. That includes things like employees' pay, supplies, a car or truck, fuel costs, advertising, and more. Rep. Michele Bachmann said this on Nov. 16, and we rated it Pants on Fire.
• "Democrats are poised now to cause this largest tax increase in U.S. history." To examine this statement, we looked at tax increases measured as a percentage of the entire economy, a method that takes into account inflation and economic growth. If the current tax rates for the wealthy expire, it will raise their taxes, but it will not be the largest tax increase in history. In fact, a 1982 tax increase signed into law by President Ronald Reagan would be larger. If all the tax rates went up in 2011, that would be larger, but the evidence shows that tax increases passed to pay for World War II were larger still. Sarah Palin, the former governor of Alaska, said this, and we rated it Pants on Fire.
• "If all of the tax cuts expire on schedule, the budget will be close to being balanced in four years." Would budget shortfalls be less if you let all the tax cuts expire? Yes, definitely. Would it bring you close to a balanced budget? No. You would still have a deficit of about 3 percent of the Gross Domestic Product, a measure of the entire economy. That might be a sustainable deficit, but it wouldn't be a balanced budget. Rep. Robert C. "Bobby" Scott, D-Va., said this; he supports letting all the tax cuts expire. We rated the statement False.
• "If all of the tax cuts expire on schedule, the budget will be close to being balanced in four years." Would budget shortfalls be less if you let all the tax cuts expire? Yes, definitely. Would it bring you close to a balanced budget? No. You would still have a deficit of about 3 percent of the Gross Domestic Product, a measure of the entire economy. That might be a sustainable deficit, but it wouldn't be a balanced budget. Rep. Robert C. "Bobby" Scott, D-Va., said this; he supports letting all the tax cuts expire. We rated the statement False.
So, any thoughts?
6 comments:
There is absolutely no reason to extend the Bush tax cuts for the mega-wealthy.
Isn't it time the Democrats stopped compromising with requests and/or demands that are greedy and riduculous in both theory and in fact?
NS
It may be off topic, but you should highlight the latest CBO findings on the "Stimulus"
Although it’s not exactly a news flash since many economists have been saying this for months, but a new Congressional Budget Office report gives a new basis of support for stimulus supporters.
We are heading for an estimated $15 Trillion GDP! Thanks to the stimulus package. So it won’t US take us 10 years to recove from the "second" Great Recession as it did from '29 to '39.
I know it's not what the GOP would like to hear, but what did Obama do so right where Hoover failed so miserably?
Carl
NS: The more we learn about how the deregulation of the last few decades has opened up our governing system so completely, it's fair to say taking some drastic steps toward correcting the system has finally reached the do-or-die stage. If we are to survive what may be the curve toward Land Barron/Serfdom in our own country, we have to step up and make our government protect those who would support what this country represents.
Having the party thats supposed to represent the working class capitulate at the rate they are is embarrassing and almost treasonous.
Addressing the tax issue right now is mandatory. I just dont think the wimpy Democrats have it in them to challenge the minority on anything. 59-41 is just too scary for them.
Respectfully, I have to say that the "treason" - if you want to call it that (sounds like a good word to me...) - came during Bush Jr. and Cheney's "reign of terror." The peoples biggest mistake was not getting Bush Jr. impeached. President Obama's biggest mistake was in "not" dealing straight up and FAST with Bush Jr. and Cheney's alleged [and sometimes fairly obvious crimes...] And today's Democrats? They "will" stand strong - or else this country will go completely [in whatever way it presents itself...] "rougue". I don't think the American people can take too much more - and I don't think they should. But - that is just my opinion. Thank you for your response.
Hey Mike. Want a laugh? I think you'd get a big kick out of my last blog [Flinging Towards the Sun] post... Lol. Whay the hey? You can't say there aren't any "characters" in UC Legislative District 6. Right? We all have our place... "Shrek and Fiona"... we ought to go down in history for "something" : )
The uncertinity is what is slowing the recovery, get it done right and let people and business plan for the future. The tax increases will effect everyone because businesses will not hire and people will have less money to spend. The stimulas was a bust, we still do not know where all the moeny went (overseas) Let's stop spending and focas on the people. The govt is not the answer, we need the confidence to invest again and get the country working again. Go back to 2009 budget and live with it. We cannot spend our way out of this mess.
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