Some Republicans in Congress are putting on quite a show these days, boldly declaring independence from Grover Norquist while still refusing to raise tax rates on the wealthy. For example, Sen. Bob Corker of Tennessee was widely praised for proposing a bold compromise that amounts to the same right-wing snake oil. After oozing some conciliatory prose, Corker makes this offer —
The proposal includes pro-growth federal tax reform, which generates more static revenue — mostly from very high-income Americans — by capping federal deductions at $50,000 without raising tax rates. It mandates common-sense reforms to the federal workforce, which will help bring its compensation in line with private-sector benefits, and implements a chained consumer price index across the government, a more accurate indicator of inflation. It also includes comprehensive Medicare reform that keeps in place fee-for-service Medicare without capping growth, competing side by side with private options that seniors can choose instead if they wish. Coupled with gradual age increases within Medicare and Social Security; the introduction of means testing; increasing premiums ever so slightly for those making more than $50,000 a year in retirement; and ending a massive “bed tax†gimmick the states use in Medicaid to bilk the federal government of billions, this reform would put our country on firmer financial footing and begin to vanquish our long-term deficit.
In other words, no increase in tax rates for the wealthy; cut salaries and benefits for federal employees; pass Mitt Romney’s version of Paul Ryan’s Medicare plan; and mess with Social Security, which isn’t part of the budget.
I say they can take this “compromise” and shove it where the sun don’t shine.
I’m going to have to check on the “bed tax” issue; I thought it was something some states did to raise matching funds required to receive Medicaid dollars, and while it may be a bad way to raise money, I don’t see how you can call it “bilking.” But maybe I’m misunderstanding it. And it seems to be happening mostly in “red” states, anyway.
Anyhoo — Krugman addresses the question of why Republicans are so all-fired determined to not raise tax rates —
The contortions Republicans are going through in an attempt to avoid raising tax rates are quite something, and they pose something of a puzzle: why are they making noises about raising revenue by limiting deductions, while still screaming bloody murder at any hint of a rise in tax rates?
One possible answer is that they’re still imagining that they can pull a fast one — that they can sell supposed revenue raisers that don’t actually raise much revenue, or that they can find a way to renege on whatever agreement might be reached by appealing to the various interests with a stake in particular deductions.
That was my thinking. But there’s another possibility — a proposal is floating around that would effectively stick the upper middle class with higher taxes but protect the genuinely wealthy. Billmon describes it as turning the upper middle class into human shields to protect the wealth of the wealthy. He continues,
So what’s going on here? Well, now that Comrade Norquist has been purged from their ranks, the Republican Politburo appears to have decided that if revenues must be raised, it should be done in the way suggested by their last presidential nominee (the one whose name is currently being methodically erased from the RNC’s official records).
To this end, various GOP apparatchiks are touting the idea of using deduction caps and/or clawback mechanisms (which would deprive high-income taxpayers of the benefit of the lower rates applied to the first few chunks of those incomes) as a substitute for raising the top marginal rate all the way back to the same confiscatory level (39.6%) that prevailed during the Clinton economic hell hole years.
You may recall that during the campaign a cap on itemized deductions (mortgage interest, state income tax, charitable contributions, etc.) was offered up by He-Who-No-Longer-Exists as the solution to his $5 trillion arithmetic problem — except that whereas Mitt wanted to use the money to pay for even lower marginal rates, the GOP Politburo has now adopted the Left Deviationist line that tax increases on the wealthy are OK as long as they don’t harm “incentives†for “job creators†— i.e. don’t raise the top marginal rate.
Billmon explains all this in more detail, as does Nate Silver (lots of math!) and Josh Marshall. Those guys explain the actual proposal better than I can. But it boils down to sticking people who make $250,000 to $400,000 a year with higher taxes as a kind of bait-and switch that would allow the very wealthy to keep their current tax rates on their millions and millions.
What the bleep is wrong with these people?
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Personal note — I have sold my co op and signed a lease on a rental apartment, and I am moving on Monday (six days!) and have a ton of other work to do beside that, so posting will be a bit hit and miss over the next few days. Please do drop by and talk among yourselves, though.
Congratulations, maha – I hope you made some money off the co-op sale.
Packing and unpacking are never fun.
I would suggest that the President let the country go over the fiscal molehill, and then work with the new Congress – no good ever comes from these lame-duck sessions.
And THEN see what the Republicans do – after EVERYONE’S taxes go up.
Let’s see them hold-out for returning to lower taxes for the rich, while the Democrats fight for lower taxes for the 98%.
Social Security needs to be off the table. PERIOD!!!
As for Medicare and Medicaid, if Obamacare can pick up all of the slack, then I’d be willing to listen to recommendations – but not from the Republican/Nihilist Party members. They’re not into creative solutions – all they’re interested in, is creative destruction.
Best of luck with the move!
Yup. Staring straight into the camera without flinching, indignant with the injustice of it all while lying through their teeth has worked for so long they’ve hardly been given reason to belive their continued success is in jeopardy. Their convenient excuses for a Romney loss underscore their deep denial. The shenanigans will continue even after the GOP as it is today is obliterated, not because they’re more persistent but because they’re hired employees of the uber rich who’ll do their employers bidding until they’re no longer being paid. My hope is that the election has proven that their money’s no good here anymore. Let them try as they will.
Good luck with the move! I hope you like your new home.
Caps on deductions. So, like, the wealthy will not be donating large sums to charities any more?
It’s hard for me to work up any real interest in the Republicans’ proposals, given what a very weak bargaining position they’re in. The top tax rates are going to go up, and in addition there’s going to be a huge cut in defense spending. The Republicans don’t want either of those things to happen, but what do they have to offer in return?
It’s a nice change from the ordinary, since for once the Republicans have more to lose by not making a deal. They don’t want the government to do anything anyway, so normally gridlock works to their advantage, but in this case Obama can just let all the tax cuts expire and then start asking, loudly and repeatedly, why his friends across the aisle are so opposed to a tax cut for the middle class.
Good luck with the move. I just finished relocation myself, so let me say from the bottom of my heart: I hope you have less crap than I turned out to.
This idea of “bringing compensation for the federal workforce in line with private-sector benefits” has always gotten to me, too. It’s the same basic argument they use in their attempts to crush the public employees’ unions.
I mean, I agree that it isn’t fair that public employees have unions while private employees don’t, but it does not seem self-evident to me that the solution is to crush the public employees’ unions. Similarly, if I notice that group A is doing better economically than group B, my first impulse is not to think about what I can take a way from group A in order to close the gap. I think that makes me a socialist.
WAAAAAY OT!
Sad news to report – the great Marvin Miller passed away at age 95. He was the man behind Baseball’s Players Union – one of the most successful unions in our countries history.
Anyone who pissed-off Walter O’Malley and Dick Young this much, should have his face on Mt. Rushmore.
I really hope they push for this idea of the bubble tax. I’ve come to believe that real change will occur in this country once the bottom 90% of the top 1% realizes that the the 0.1% are not their friends.
Chris, you have made an interesting suggestion. Of course, the Faux spin will be vicious, but when isn’t it? I looked a picture of Blankfein today and thought how he and his ilk have self-concepts that totaly isolate them from citizenship in the real world. They don’t go to jail no matter what, and they get so much pay both while working and when leaving that it does not matter what they do at the end of the day.
Private employees can have unions. In fact the private unions have it better than the public unions. Public unions do NOT have a true collective bargaining situation. Public employees cannot bargain for salary or benefits. Those are set by Congress. Public employees cannot go on strike. Just ask former PATCO (air traffic controllers union) employees about that. No one from that strike was ever allowed to work for the government again–not ever. I was President of a Federal Government union and the only thing we could do was bargain for space and other “changes” in our working conditions. We also have to represent every bargaining unit employee whether they pay dues or not. There have been many studies of private and public sector salaries, and the public salaries and benefits do not even come close to what people in the private sector earn. In particular, employees who have any thing above a bachelor’s degree (e.g., doctors, lawyers, etc.) and work in the public sector do not earn close to what the private sector earns. Thus, if you are in a professional category and choose to work in the public sector, you will be taking a big cut in salary and benefits. Theoretically, we were always told that we should be proud to work for our government and accept the low wages. The one thing I hated most was putting up with Congress critters (who, BTW, are Government employees) who constantly bad-mouthed hardworking Civil Service employees. There are few public employees who are millionaires (probably not any); but, most in Congress are millionaires. When Joe Biden was tapped to be Vice President, he was, perhaps, the poorest of the people in Congress at the time. I had read that at that time, he and his wife were worth about $500,000–which is dirt poor for a member of Congress.
Pssssssstttt – GULAG… Barbara’s away for almost a WEEK and she left us the KEYS! We gotta do something spectacular so she’ll be impressed when she gets back.
The Toga party we tried last time didn’t quite work – come up with something new…. Uh-Oh .. she’s logged in – look innocent… (Whew, that was close!)
Too bad that Thanksgiving Day Parades are over, Doug – or else… whisper, whisper… Flounder’s car… whisper, whisper, whisper… parade float… whisper, whisper – MAYHEM!!!
And she’ll be back by Xmas, so we can’t even grease our butt’s, slide down people’s chimneys, and liberate their presents. ‘BE FREE, 55 INCH HDTV! BE FREE!!! (for me).”
Hey, I’m watchin’ you. Behave.
It was Doug’s fault, maha!
HE started it!!!
Hee hee… you guys!
This morning Grover Nordquist was interviewed on NPR. What a nobody’s-behind-the-curtain revelation! He confused “litigate” with “legislate,” called Reagan and GHW Bush “[politically] sophisticated,” accused Obama of “thinking he is king.” (Duh, Grover, were you in a coma 2001-2009, when that president really did behave as if he were king?)
It wasn’t clear if Nordquist is 100% delusional, or a mix of delusional and dishonest (I strongly suspect the latter). In any case, he revealed himself to be an unelected, reality-impaired, a**-ignorant nobody whose ring the Repugs in Congress must kneel and kiss. Except that they’re starting to refuse him.
Joan,
I’ll believe it when they actually vote FOR a tax increase for the wealthy.
Until then, this is just another Kabuki dance with synchronized lip-movement – the prelude which is meant to confuse, before the climax, when they close some BS loopholes for the rich, opening up an array of others, and increase the taxes and decrease deductions for the poor and middle classes.
Oh, and of course, cut “entitlements” for the rest of us, while helping our “Job Creators” create the jobs they creats so well – in China, India, Bangladesh – and some additional accounting jobs in the Caymans and Switzerland.
We’re going to have to be on our President, and Congressional Democrats, like gravy on Holiday meals, to make sure that “Shared Sacrifice” doesn’t end up with 99% of us doing the sacrificing, and the 1% sharing laughs and tax avoidance tips.
“The game is afoot!”
And boy, how the Conservatives want to game these talks!!!
For the government to hire engineers there go to places like Becktel (sic) to hire contractors at an astronomical cost. Works well for somebody. Wonder who. All this because federal pay scale does not go high enough. So they get to pay 2x as much. What a system.
OT – just saw a movie called Chasing Ice, which is about a world famous photographer, James Balog (his work has appeared in National Geographic and elsewhere), and his attempt to document glaciers receding, via time lapse photography. The whole point of it is to provide visual evidence for climate change, that cannot be refuted.
The movie is great, and you should go see it if you can. The film’s trailer doesn’t do it justice – it doesn’t show the final product.
What’s priceless is this brief interview of a former climate change skeptic and Bill O’Reilly fan, shaken to her core after seeing this film.
As I watched the film, I was struck by the power of one man and his ability to communicate through film, to shift the entire climate change discussion, one viewer at a time.