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Tax Cuts, Baby: House Republicans Offer Their Own Stimulus
As Politico reports, House Republican leaders took advantage of today's bipartisan meeting with President Obama to introduce their own alternative economic stimulus plan. Unsurprisingly, the theme is tax cuts, tax cuts, tax cuts.
Instead of a tax credit for individuals making $75,000 or less or families making less than $150,000, Republicans would like to reduce the tax rate by 5 percent on those Americans in the lowest tax brackets, from 15 percent to 10 percent and 10 percent to 5 percent.House Republican Leader John A. Boehner and his no. 2, party Whip Eric Cantor, pitched the plan to Obama during the Friday morning meeting. Boehner tapped Cantor to come up with ideas, and this plan is the result of that work.
Boehner, in remarks on the White House driveway, warned that "government can't solve this problem."
The president's vow to keep 90% of the stimulus-related jobs in the private sector wasn't enough, guys? Aw.
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| TOPICS: Barack Obama, Eric Cantor, John Boehner, Republicans, Stimulus
| TOPICS: Barack Obama, Eric Cantor, John Boehner, Republicans, Stimulus
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Josh
Matt
Eric
Republicans propose tax cuts for the poor - only?
I have a hard time believing that.
January 23, 2009 12:42 PM | Reply | Permalink
Well - now that I've read the whole Article - no, it isn't just tax cuts for the poor. The Republicans have clearly decided that in order to win back power, they need to LOOK like they are being shut out - it is all a sham. They are re-branding themselves, rather than create a new product - which of course is what has been wrong with republican economic policy all along.
"After the White House meeting, House Speaker Nancy Pelosi (D-Calif.) told a scrum of reporters many of the tax cuts in the Democrats' initial package "were made by the Republicans already."
"They have had their voices heard and their provisions are in the legislation," Pelosi said."
January 23, 2009 12:49 PM | Reply | Permalink
Does conservatism mean tax cuts are the only solution to economic problems and war is the only solution to dispute?
It's as though the only viable solutions are those they can sell to the lowest common denominator of their constituents.
Is this how their mindset works?
January 23, 2009 12:50 PM | Reply | Permalink
Yes. Modern Republican "philosophy" on domestic policy can be summarized as: "Tax cuts are the answer. What was the question?"
January 23, 2009 4:10 PM | Reply | Permalink
Too bad. McCain lost the election. I love how Boehner is talking about cutting spending and small government now that a Democrat is in office - where was this talk when BushCo were spending our grand children's money in Iraq (cutting taxes while at war - brilliant).
I wish they'd be called on their blatant hypocrisies, both on their budget hawkishness and in the Cabinet confirmation hearings.
January 23, 2009 12:56 PM | Reply | Permalink
How transparent. With a cut in rates, people in the lower tax brackets get pennies back because they pay little tax to begin with. In contrast, a refundable tax credit means that people in the lower tax brackets could get credits that exceed their tax liability, and the excess is refundable, similar to the Earned Income Credit.
January 23, 2009 1:29 PM | Reply | Permalink
And to top it off, if the money goes to low-income people, they'll spend more of it, serving the actual purpose of the bill, which is economic stimulus. The modern conservative mantra is that taxes are "your money" that the government stole from you, so the idea of a tax credit that goes to people who didn't pay taxes is anathema, no matter what the purpose.
They are ideologically incapable of supporting the actions that will actually work. Tax cuts are always good, and government spending is always bad (unless it goes to private sector contractor/contributors), even though Boehner (I think) put out a public call to find any economists who agree with that, and came up empty-handed.
In the minority, they are now back in their comfort zone, which is obstructing constantly and blaming everything on the Democrats. I hope we can keep them there for a long time.
January 23, 2009 4:20 PM | Reply | Permalink
"...the idea of a tax credit that goes to people who didn't pay taxes is anathema..."
Of course, the premise that people at the bottom of the economic ladder don't pay taxes is also demonstrably false. They pay payroll taxes. They pay sales taxes. They pay all sorts of taxes. Funny how Republicans never seem to get lathered up about regressive taxes like these. In fact, when GWB was part owner of the Texas Rangers, he pushed through a sales tax increase to build a new stadium to benefit...guess who?...him and his wealthy partners. Somehow, the only taxes Republicans seem to regard as evil are progressive taxes that impact wealthy people: income taxes, inheritance taxes, dividend taxes.
January 23, 2009 5:39 PM | Reply | Permalink
The "Party Of Ideas" hasn't had a new policy idea since before Moynihan called them that in the '80s.
The party of the Hammer proves that, to them, everything is a nail.
If the economy is doing great, growing and running a surplus, cut taxes.
If the economy is failing and jobs are disappearing, cut taxes.
All this, based on the most appropriately named economic theory in history, the Laffer Curve.
Look it up...and laff, laff, laff!
January 23, 2009 2:00 PM | Reply | Permalink
What, no proposal to cut the cap gains tax again? Take the increases to the top two rates off the table? No? Just cuts for the bottom two brackets?
They couldn't have branded themselves more obviously as whores if they showed up in lipstick, snug cocktail dresses, and f**k-me pumps.
January 23, 2009 2:01 PM | Reply | Permalink
I've been trying to listen to as many economists as I can on this economic stimulus issue. And one thing that most (there's no such thing as consensus on any of this) seem to agree on is that one time tax credits get saved and not spent. It is in each of our own best interests (although not collective) right now to hoarde money. Human behavior says that if you give someone a lump sum in this environment, they will save it or pay down debt. If you give someone a guaranteed decreased tax rate, they will be more likely to treat it as normal income. I can tell you it's true in our household. Our budget is made up of guaranteed monthly income. Bonuses, which is what a tax credit would be, get put in a bucket to be saved.
I'm concerned about the whole tax credit approach. We did that last year to the tune of nearly $200B and it made virtually no impact on the economy at all. The goal is to get money cirulating. How do we best do that? With as big of a mess as we're in right now, if (temporary) marginal tax decreases are part of the answer, I'm willing to consider it.
Of note is that I can only process this information when I listen to economists and not politicians, who have their own agendas. My reflexes are totally set to not hear anything Boehner says.
January 23, 2009 2:08 PM | Reply | Permalink
What you say about one-time tax rebates is absolutely true. but I don't think the tax credits he's talking about are one-time things. My understanding (could be wrong) is that the tax credits would be permanent. Cuts in tax rates have virtually no benefit for people in the lower tax brackets. Credits, on the other hand, can be made refundable, similar to the Earned Income credit, so that even people with little income could benefit from them.
The other tax cut that's being talked about is a cut in payroll tax. Because the payroll tax is regressive, this will also disproportionately help middle- and lower-income people. I'm sure Republicans will not be in favor of this one. They only hate progressive taxes.
January 23, 2009 3:01 PM | Reply | Permalink
Bi-partisan means both agree, not that the Democrats fold and give the Republicans everything. There are plenty of tax cuts in this bill already. Too many in reality. What are the Republicans willing to give, if they were giving us any indication that they had any original thoughts that would be acceptable to the majority that would be a bi-partisan effort. Just saying more tax cuts are needed is not bi-partisan.
Investments create jobs, tax cuts don't. We saw that with the rebates that were sent out last year. People did not spend, they paid off existing debt.
With the unemployment rate at 7.2% and climbing we need to create an environment where jobs are created. If I get a tax cut I can't employ anyone and it sure won't help me start a business.
There are too many tax cuts in the existing bill as it is. More investment is needed, not more tax cuts so John Thain can keep millions more of his unearned money.
January 23, 2009 2:26 PM | Reply | Permalink
January 23, 2009 2:36 PM | Reply | Permalink
ha!
January 24, 2009 9:39 AM | Reply | Permalink
Call me silly,but we should be selling energy to third world,and get our money back we've spent there since WWII.Let china and India finance the third world standard of living.We've done that for 60 years now,and all we got is muji's,rap music and Obama.I was kinda hoping for the Star Trek society of free energy and zero politicans.But I'm not a lawyer from Columbia or NYU,so what can I possibly know-even with an engineering degree.And we all know what happened to N.Tesla when associating with robber-barons.
January 25, 2009 9:55 AM | Reply | Permalink