The “fiscal cliff” deal we need
●To get to 30 percent without reducing taxes on the wealthy, Republicans agree to higher taxes on dividends and capital gains (profits from the sale of stocks and other assets). These are now taxed at no more than 15 percent — a huge benefit for the rich. Taxpayers with incomes exceeding $200,000 of income receive about 90 percent of the benefits, says the nonpartisan Tax Policy Center.
●Republicans support an increase in the federal debt ceiling of at least $2 trillion. The limit, now $16.4 trillion, will be reached early next year.
●Obama endorses sizable cuts in Social Security and Medicare — and pledges to campaign for them. This is Democrats’ quid pro quo for Republican tax concessions. In 2011, Social Security and Medicare cost $1.2 trillion and represented 36 percent of noninterest federal spending. Excluding them would make any deal too small or too reliant on tax increases and cuts in other programs. Eligibility ages must rise; benefits for wealthier retirees must fall.
●Recognizing that a balanced budget requires more spending cuts and higher taxes, the White House and Congress create two task forces: one to study an energy tax; the other to study controlling health costs, now a quarter of federal spending.
Blowback
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And right there Samuelson demonstrates just how far into fantasyland he has strayed.
Difficultas_Est_Imperium on November 19, 2012 at 11:24 AM
It’s over…let’s all stop pretending it isn’t. Time to take our medicine for decades of big government policies.
trs on November 19, 2012 at 11:27 AM
When has government spending ever, ever, ever, ever, ever, EVER, EVER been cut in a serious way? How many times has this been promised and never happened?
NO TAX HIKES until after entitlement spending has been permanently cut by at least 10%. (No sunsetting timetable allowed)
Forget it. None of this will ever happen.
Bat Chain Puller on November 19, 2012 at 11:32 AM
You can stop reading right there. The Tax Policy Center is s union-funded liberal BS machine. I won;t even call it a think tank, because it isn’t thinking, it is spewing propaganda. I am very depressed to find Robert Samuelson drinking that Kool-Aid. But I guess he wants to keep his gig at the WaPo.
No deal. At all. Let all the tax rates expire, and don’t fix the AMT. Put all the people back on the tax rolls that Bush took off. Obama says that’s what the people voted for let’s give it to them.
We are never going to get people to pay attention to the metastatization of this government until we start making all of them pay for it. I’m with William Niskanen, the “starve the beast” strategy has failed, it’s time for the “make everyone pay for the beast” strategy.
rockmom on November 19, 2012 at 11:32 AM
Geitner raise the debt limit to infinity they are not taking the fin. health of the country seriously.
ChunkyLover on November 19, 2012 at 11:33 AM
+1
It’s time people learned that free stuff isn’t free.
gwelf on November 19, 2012 at 11:39 AM
Tax imports. That would also create more US jobs, which means more people that can be taxed and fewer on the dole.
Buddahpundit on November 19, 2012 at 11:39 AM
Yeah, Smoot-Hawley worked so well in 1930.
Bat Chain Puller on November 19, 2012 at 11:42 AM
Here is the reality you people just don’t get. Our federal government is so big, powerful and monolithic that there is no stopping it. The only way it’s going to stop is when it collapses on itself because of its sheer weight. All empire fall…the sooner the better.
MoreLiberty on November 19, 2012 at 11:48 AM
It’s working for China. A lot of things worked 100 years ago that wouldn’t work now, and vice versa. Your theory that we shouldn’t have any legitimate jobs in the US is a bad idea if you think about it for a minute.
Buddahpundit on November 19, 2012 at 11:49 AM
chemman on November 19, 2012 at 12:07 PM
The problem with import and export tariffs are that, just like income tax deductions, they are “targeted” at specific industries, interest groups or countries – creating trade wars. It is so against the conventional wisdom to enact across the board tariffs that no one even analyzes what the benefits might be.
Resolute on November 19, 2012 at 12:09 PM
As usual, the Washington Post is WRONG!!!!
This article starts with a FALSE PREMISE: That those who have investment income are “rich.” In fact, many (if not most) of the people who have investment income are ordinary (NOT RICH) taxpayers who have 401K and other pension plans.
Increasing taxes on investment income mainly hurts seniors from ALL income groups who are have retired!!! And this is IN ADDITION to the huge cut they face because of Obama’s theft of $700 Billion from Medicare!!!
In pursuing a “budget deal,” it is vital that Congress put a stop to Obama’s WAR ON SENIORS, including new taxes, outright theft of retirement assets, and Obamacare’s DEATH PANELS staffed by unaccountable bureaucrats.
landlines on November 19, 2012 at 12:15 PM
(facepalm)
Samuelson, sometimes, in days gone by, would bring SOME economic literacy and sense to the table (even then, it made a striking contrast in op-ed circles).
Now? Full-bore idiocy, with every false framework in place.
No mention of the gigantic, unprecedented increases in NON-ENTITLEMENT spending since 2009 (and the hefty increases in it in the 2nd Bush term). Folks, SS/Medicare didn’t suddenly become an issue – nor, in the first case, is it even yet financially failing. The refusal to deal with the enormous, ruinous budget increases in discretionary non-defense spending the last 4 budget cycles (oops, there’s no longer a budget, so even THAT basic building block is gone) continues, and nary a peep from anyone in the Beltway.
Oh, and yes, what America needs is more ruinous, dead-end taxation.
An “energy tax”? Why not correctly label it an “economic activity tax”? Energy has always been a key part of every US economic advance (sustained and real) – yet again, thanks to oil prices and technology, the US is poised for a widespread energy-driven boom. Hey! Let’s tax the best source of secular economic growth, and kill/cripple it! Genius!
And reduce healt care costs? With what, magic, Samuelson? How about the only “magic” that has ever, anywhere, reduced costs of a product or service? Innovation, competition. Innovation, competition. It’s really quite simple, Samuelson. And yet the US – incredibly – has just lurched onto a path to further hamper and even undermine its spectacular health care industry through MORE regulation, MORE market distortion, MORE idiotic tinkering by illiterate social engineers?
The very framework for discussion of almost all serious public policy issues is so completely detached from reality and history (let’s just forget trifles like the constitution, or rule of law, or any serious moral framework), it’s impossible to have a real discussion any more.
And the national GOP is almost as clueless as their opponents. It is not possible to have a positive outlook on any of this.
IceCold on November 19, 2012 at 12:45 PM
heh
Republicans won the election too. Whose your daddy?
A promise and an endorsement is not a quid pro quo. That is status quo, which got us to the ‘cliff’
When we hit the cliff, long term gains hit 20% and max dividend tax hit 39.6. Anyone wonder why the Congress and Obama endorsed the cliff? The ones who didn’t, Tea Party, got worked over by their own party. Had the GOP stood with Bachmann et al, the nation would be in better shape, and Obama would not have his ‘cliff’ for his shills to work. Seems to me the RINOs wanted the cliff so they could pretend their hands were tied after the election
Another task force? Let the states install energy taxes, each according to their needs, and people will vote with their feet.
You can’t sustain both Medicare and Obamacare, no quid pro quo possible. Let Obama’s Senate demand Medicare cuts to save Obamacare.
If the House gives Obama this ‘quid pro quo’ the bipartisan rape of the nation will continue, from a bigger cliff
entagor on November 19, 2012 at 1:12 PM
Yeah, that won’t hurt the economy at all ….
tom on November 19, 2012 at 1:15 PM
One of the factors driving Hostess out of business is that tariffs on sugar drive their costs through the roof. That’s why they can’t give the unions their usual pound of flesh.
Protectionism is still bad for business. Smoot-Hawly would still be horrible legislation today.
Which is exactly why it’s a very plausible approach from the Obama administration.
tom on November 19, 2012 at 1:19 PM
That would explain why every proposition is both economically stupid and … well, exactly the sort of class warfare Obama would love.
I especially like the part where we go ahead and raise taxes, and Obama promises to campaign for spending cuts some day.
And now that we’re seeing growth in some sectors of the energy economy, of course it’s time to start taxing it.
You don’t have to be an expert to see this is a colossal pile of fail.
tom on November 19, 2012 at 1:24 PM