Employers in U.S. Start Bracing for Higher Tax Withholding

[Chuckiechan]

Employers in U.S. Start Bracing for Higher Tax Withholding - Bloomberg

If Congress fails to act, income tax rates will revert to higher levels dating from June 2001.
For a married couple with an income of $80,000, that would drain an extra $221.48 in withholding from a semi-monthly paycheck, according to calculations by the Tax Institute at H&R Block. Married individuals earning $240,000 a year would lose an additional $557.78 to withholding in a single semi-monthly paycheck. The Tax Institute at H&R Block calculated federal tax rates for single-income earners and married taxpayers without children.
Paychecks could shrink in January and into February, depending on how long it takes Congress to act.

[brandon184]

Married individuals earning $240,000 a year would lose an additional $557.78 to withholding in a single semi-monthly paycheck.

Returning to Clinton-era tax rates! What a nightmare!

I think that extending the Bush tax cuts at a cost of four trillion dollars is a great idea, so long as someone comes up with a way to pay for it. I'm looking forward to hearing ideas from the fiscally conservative tea bagger deficit hawks who seem to think it's a great idea.

[Chuckiechan]

The fact is, you will have less money in your paycheck than before come January 2011.

Don't you live in Canada?

[The Real Bingo]

I think that extending the Bush tax cuts at a cost of four trillion dollars is a great idea, so long as someone comes up with a way to pay for it. I'm looking forward to hearing ideas from the fiscally conservative tea bagger deficit hawks who seem to think it's a great idea.

Please explain how not collecting taxes is a cost. I guess it's just me, but I have trouble wrapping my head around that "logic".

See, I think of costs as expenditures. You know - social programs, defense/military, and waste. But, hey, that's just silly old me.

Using your logic, any tax levied under 100% is a cost, because the government could theoretically collect 100% of income...therefore if it's only collecting 90%, it's at a cost of the remaining 10% it didn't collect.

[HMMurdock]

Please explain how not collecting taxes is a cost. I guess it's just me, but I have trouble wrapping my head around that "logic".

See, I think of costs as expenditures. You know - social programs, defense/military, and waste. But, hey, that's just silly old me.

Using your logic, any tax levied under 100% is a cost, because the government could theoretically collect 100% of income...therefore if it's only collecting 90%, it's at a cost of the remaining 10% it didn't collect.

Because you know congress doesn't cut spending, so the lost tax revenue is a cost. (Congress needs to print more money and ones and zeros to magically create wealth doncha know )

[brandon184]

The fact is, you will have less money in your paycheck than before come January 2011.

It doesn't matter, really. People have an obligation to pay taxes as long as they continue to demand things from the government. And if they want lower taxes, they need to learn to give things up.

What do you propose be cut from the budget in order to pay for the extended tax cuts?

[brandon184]

Please explain how not collecting taxes is a cost. I guess it's just me, but I have trouble wrapping my head around that "logic".

Bingo, let's not be obtuse for the sake of making an argument difficult. Run a business for a while and your ideas on what is and is not a "cost" through exact definition and accounting principles/financial reporting may change.

For the sake of argument, forget that I referred to the sacrifice in revenue as a "cost". It's irrelevant really. The fact remains that people want services. They want programs. They demand them. Regardless as to whether or not people enjoy paying taxes, programs and entitlements need to be paid for.

You can't have your cake and eat it too.

[butch81385]

Brandon, I'm sure many of the people who don't wan't these taxes reinstated would be fine with giving up Obamacare, limiting welfare, eliminating the cost of illegal aliens (despite any benefit they may provide, they do add cost to the government as well as a lack of tax revenue through being paid under the table), etc. I don't know if that is enough of a reduction in spending to cancel out the lost income, but it's a start.

[brandon184]

Brandon, I'm sure many of the people who don't wan't these taxes reinstated would be fine with giving up Obamacare, limiting welfare, eliminating the cost of illegal aliens (despite any benefit they may provide, they do add cost to the government as well as a lack of tax revenue through being paid under the table), etc. I don't know if that is enough of a reduction in spending to cancel out the lost income, but it's a start.

The fact that you don't know if it's enough of a reduction in spending really epitomizes the problem. The first things you name are the things that are personally distasteful or which have been politically demonized. However, they represent an extraordinarily small portion of overall spending.

"Obamacare" is projected by the CBO to decrease the deficit by $143 billion over the first decade. But for the sake of example, let's say for a moment that the CBO is a shill for the left (even though it's nonpartisan) and is completely off the mark in their figures and that the healthcare reform would actually increase the deficit by $200 billion over the next decade. Guess what? Repealing it would still be a drop in the bucket to achieve the kind of savings you'd need.

The whole problem here is that no one is willing to propose any radical cuts to any real, expensive programs which would be necessary to actually balance the budget should all of the Bush tax cuts be extended.

[thephilosophizer]

The real question here isn't whether the tax breaks get extended, but if those extensions include those earning over $250,000.
The big issue to me, and one I have brought up before, one that republicans NEVER talk about, is the income on those tax breaks on wealth disparity in the country. Income disparity has been increasing in this country since Reagan. And I think it is high time that we look at the effect of his tax code restructuring and the effect it has had on regular people. Those tax reforms did a great job of concentrating wealth in the hands of a limited few. Bush's tax cut did one further.
The fact that people are willing to argue that somehow concentrating wealth into fewer and hands is at all a good idea, just makes me want to bang my head against a wall.

[butch81385]

Concentrating wealth isn't a good idea in itself, but neither is wealth redistribution...

[brandon184]

Wealth redistribution at all income levels is a fact of life, and you'll just need to get over it. The tax revenues that the government brings in are sent to programs that benefit people other than you. Paying for roads is a form of wealth redistribution. Though problems tend to arise when influential people wiggle out of their obligation to pay their fair share, leaving the bill for people who are less capable to shoulder a greater burden.

I'd still like to know what programs should be cut to balance out $4 trillion worth of tax cuts over the next decade. The federal budget is here if you're interested in knowing what your options are.

[butch81385]

Well, if you look at 2010 receipts, it is $2.381 trillion. If you go back to 2007 expenses (before all of the wild and crazy stimulus packages, obamacare, etc), it is $2.8 trillion. I used the 2007 number as it provides proof that with a functioning government (that happened to work fine for most of us in 2007), and today's expenses you can still balance the budget with just a little fat trimming. If you don't even want to trim the fat, then you can increase taxes by 1/8 of the proposed $4 trillion and still balance the budget....

Surprisingly (or not), unemployment and welfare costs make up 3/5 of that deficit. Uncollected taxes (probably from all of the politicians? )would cover the rest. Now getting rid of unemployment and welfare entirely would not be a good idea, especially in this economy. But it can be put on a diet. The resulting deficit could be overcome by removing pork-filled riders and earmarks that don't benefit society.

Now, if you want to make an argument that the tax break should not extended, and the extra money should be used to pay down the national debt, that is a very different story. But as it is being described, many of us see the government taking trillions of dollars from us, and just spending it on more... If they get an extra $4 trillion dollars, is that going to be used to pay down the debt? More than likely unemployment will be extended again, as will welfare, as well obamacare, etc, until all of that money AND MORE is spent again...

[mad1]

"Obamacare" is projected by the CBO to decrease the deficit by $143 billion over the first decade. But for the sake of example, let's say for a moment that the CBO is a shill for the left (even though it's nonpartisan) and is completely off the mark in their figures and that the healthcare reform would actually increase the deficit by $200 billion over the next decade. Guess what? Repealing it would still be a drop in the bucket to achieve the kind of savings you'd need.

CBO: Obamacare Would Cost Over $2 Trillion
President Obama, Speaker Pelosi, and their allies, are cheerfully citing “ten year” costs of $940,000,000,000.00 — apparently believing this to be a far more palatable figure than $1 trillion. But even this colossal tally is like the introductory price quoted by a cell phone provider. It’s the price before you pay for minutes, fees, and overcharges — and before the price balloons after the introductory offer expires.

For a variety of reasons, this tally doesn’t remotely reflect the bill’s real ten-year costs. First, it includes 2010 as the initial year. As most people are well aware, 2010 has now been underway for some time. Therefore, the CBO would normally count 2011 as the first year of its analysis, just as it counted 2010 as the first year when analyzing the initial House health bill in the middle of 2009. But under strict instructions from Democratic leaders, and over strong objections from Republicans, the CBO dutifully scored 2010 as the first year of the latest version of Obamacare. If the clock were started in 2011, the first full year that the bill could possibly be in effect, the CBO says that the bill’s ten-year costs would be $1.2 trillion.

But even that wouldn’t come close to reflecting the bill’s true costs. The CBO projects that over the next four years, less than two percent of the bill’s alleged “ten year” costs would hit: just $17 billion of the $940 billion in costs that the Democrats are claiming. In fact, the costs through President Obama’s entire presidency, should he be reelected, would be $336 billion. What would the president leave behind for his successor? According to the CBO, he would leave behind costs of $837 billion during his successor’s first term alone. If his successor were to serve a second term, he or she would inherit a cool $2.0 trillion in Obamacare costs — about six times its costs during Obama’s own tenure. This legislation is a ticking time-bomb.

CBO: Obamacare Would Cost Over $2 Trillion | The Weekly Standard

Obama and the Democrats then removed the “doctor fix” from Obamacare to game the CBO scoring shortly after the CBO released its initial scoring of the bill which properly showed an increase in deficit spending. Removing the “doctor fix” meant that the present CBO scoring includes an unrealistic 21% immediate cut in doctor fees in its projections, hence resulting in the illusory CBO number of $138 billion in paper deficit “savings” that the establishment media and President Obama are so happy to falsely repeat ad nauseam. In reality, as noted by the CBO’s letter excerpted above, the real CBO score is a deficit of $59 Billion over 10 years.

CBO: Obamacare = at least $109 Billion in Deficit Spending | CentristNet

[The Real Bingo]

For the sake of argument, forget that I referred to the sacrifice in revenue as a "cost". It's irrelevant really. The fact remains that people want services. They want programs. They demand them. Regardless as to whether or not people enjoy paying taxes, programs and entitlements need to be paid for.

You can't have your cake and eat it too.

The whole problem here is that no one is willing to propose any radical cuts to any real, expensive programs which would be necessary to actually balance the budget should all of the Bush tax cuts be extended.

You are right. No one party nor even a majority of the voters wants to do what it takes to get the debt under control. Ideally, I'd like to see zero debt and even "retained earnings" in the Treasury within, let's say 20 years. But that's not realistic, so by all means, I'd like to see debt to be no more than 10% of GDP and steady. That is at least sustainable.

The military/defense budget could be reduced easily by 25% which is almost $200bn for the previous budget, and it only keeps growing. Bailouts should be constitutionally outlawed. Social Security should be privatized. Medicare should be phased out. The last two things are almost impossible because everyone has a vested interest in 'em...even "conservatives" want to keep them. Finally, lobbying should be outlawed. It leads to wasteful pork projects and overspending. I'm sure there are many other things an "insider" could think of to cut, but that's my start.

[brandon184]

Well, if you look at 2010 receipts, it is $2.381 trillion. If you go back to 2007 expenses (before all of the wild and crazy stimulus packages, obamacare, etc), it is $2.8 trillion.

Unfortunately, it is pretty much useless to take revenues from 2007 and try to combine them with the costs of 2010 because the circumstances for the revenue and expenses for each period are unique. If you want to forget about "wild and crazy stimulus" ($353 billion in the 2010 budget) and evil Obamacare ($0 in the 2010 budget), you still have a shortfall of $816 billion.

I used the 2007 number as it provides proof that with a functioning government (that happened to work fine for most of us in 2007), and today's expenses you can still balance the budget with just a little fat trimming.

What would you cut/trim from a 2011 budget and how much would it save over the 2010 budget?

[butch81385]

As I said before, I would reduce welfare (by capping limits and maybe introducing a repayment plan before being eligible for payments again) and I would eliminate pork spending. This could be done by not allowing last minute riders to be added that have nothing to do with original bills/spending reports, etc. As for how much it would save, I don't have the time to go through every penny and find the waste, but we already pay someone to do that! Now if only we can get rid of it....

[The Real Bingo]

Haysoos Christ, that was painful to watch. A "political question" and a more disturbing "political answer". Why can't these politicians give a straight answer?

[brandon184]

As I said before, I would reduce welfare (by capping limits and maybe introducing a repayment plan before being eligible for payments again) and I would eliminate pork spending. This could be done by not allowing last minute riders to be added that have nothing to do with original bills/spending reports, etc. As for how much it would save, I don't have the time to go through every penny and find the waste, but we already pay someone to do that! Now if only we can get rid of it....

But if you don't know how much it would save, how do you know that it would be nearly enough?

I'll answer for you: You don't know that it would be enough and it wouldn't be enough.

As Bingo has agreed, you can't have it both ways. Your options are to either:

1) Pay low taxes and have fewer government services.
2) Pay more tax and keep the government services you have.

An alternative option is to build a thriving middle class so that individuals can have a low tax rate but overall prosperity results in overall higher tax revenue. Of course, when you advocate for policies that both destroy the middle class and ensure lower tax rates for the rich, you eliminate that option.

.

[brandon184]

Haysoos Christ, that was painful to watch. A "political question" and a more disturbing "political answer". Why can't these politicians give a straight answer?

Because people are currently incapable of having rational discussions about unpleasant things. If she responded to the question by saying that she felt that Social Security required reform, people would have a conniption and she would lose 5 points in the polls. If she said that we should slash the defense budget by 5%, she'd be smeared as "hating the troops" and "hating America" and she'd drop 10 points.

People don't want straight answers. They will only elect someone who claims they will cut taxes and "get rid of waste" and gives them other warm feelings that everything will be OK, even if everything they say is irrational, and then they turn around and complain when their elected officials turn out to be ineffective in their jobs.