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Obama as tax cutter – fighting the GOP for tax cuts for the middle class

At the end of the spring the Congress will be pushed to extended the Bush tax cuts and we will have the Obama dance about how he wants only to extend them for those under $250,000, but must extend them for all because the GOP are so mean.

In a better world, Obama would say the Bush tax cuts would expire and then propose new tax cuts – he would become the tax cutter, just as he has become the tax cutter in the payroll tax cut fight.

How hard would it be for Obama to propose a child credit increase equal to or higher than the Bush tax credit increase, or a 10% and 25% tax bracket that disappears as it would be accomplished by a credit that disappears with increasing income, or a Marriage fix, or an updating of Alt Min Tax deduction levels with those levels then tied to inflation in the future, or a cut to the taxes of those under $100,000 corresponding to the 2% SS payroll tax cut, as he lets the SS cut expire? Indeed a removal of the cap on SS taxable wages offset by a cut in the income tax for those under $250,000 seems a no-brainer.

None of these are hard to write up – I worked in tax and would need about a week to write a bill ready for the sharp eyes of the legal staff to cross the t’s and dot the “i”‘s.

But Obama’s goal is to protect the rich while pretending to help the 99%. So the above will not be done.

Meanwhile, the TV/radio are reporting that those robo calls advocating Hillary in 2012 are by a GOP outfit trying to get a third party going. I knew the Dem establishment were not that smart- not ready to replace Obama in a Dem primary. So the 1% will continue the pretend – continue the dance – and with MSM’s help, sell the idea that the 2012 election means some sort of change.

On Edit:

I forgot to deal with the objection to replacing the payroll tax cut with a Federal Income Tax cut – namely that while just about everyone pays an income tax under the payroll tax, only half of American workers pay an income tax, so the FIT tax cut does not help the lower paid. And I did not deal with the objection that applying the payroll tax to all wages would violate the Obama pledge to not increase the payroll tax on those earning less than $250,000. Well the FIT tax code has a provision for the lower paid called the earned income credit that is paid in cash whenever crediting that credit makes the income tax owed less than zero. So FIT can be cut and money can go to the bottom half of Americans – indeed to all Americans – by modifying the rules for the earned income tax credit – sending everyone in cash the equivalent of the 2% payroll tax cut, or sending the equivalent of applying the payroll tax to all wages over what those making less than $250,000 would pay under a wage cap payroll tax (if that is the program) – in effect a credit to the FIT can become paying that credit in cash when they do not owe any FIT, and can be way to get that SS payroll tax applying to everyone without breaking the campaign promise to not tax those making less than $250,000 an additional amount. Indeed in the past we had other credits that were refundable -that could be paid in cash – such as “Making Work Pay”. Not as good a sound bite as “Payroll Tax Holiday” but it was still an effective tax credit of up to $400 passed as part of Obama’s 2008 stimulus measure, only to die when Obama’s Dec 2010 compromise did not include it. With Making Work Pay, the government could have set the tax credit at the same $1000 that they say is the amount saved under the payroll tax, and more of the money, compared to the Payroll Holiday cut, would have gone to the poorer folks compared to the 1% .

I wish everyone Merry Christmas! – And if you do not celebrate Christmas, I wish you the best of Holidays!.

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