Obama to propose cuts to Social Security

[Sbane]

Why not just limit deductions?

[Torie]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes. Just what the mix should be depends on how much more revenue is "needed" to meet the metric, and frankly while I said 90% of GDP as a max, I would prefer that cruising speed be around 75%, so in downtowns, there is some elbow room for that percentage to grow.

[Sbane]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes. Just what the mix should be depends on how much more revenue is "needed" to meet the metric, and frankly while I said 90% of GDP as a max, I would prefer that cruising speed be around 75%, so in downtowns, there is some elbow room for that percentage to grow.

I completely disagree going after the state and local income tax deduction. It punishes states like California that provide more benefits at the state level (of course there is a lot of waste aka pensions). Still, I like having sidewalks.....

I would just have a hard limit on how much you can deduct from your taxable income. The middle class still benefits but the rich do not. And you don't have to raise rates to raise revenues.

[Torie]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes. Just what the mix should be depends on how much more revenue is "needed" to meet the metric, and frankly while I said 90% of GDP as a max, I would prefer that cruising speed be around 75%, so in downtowns, there is some elbow room for that percentage to grow.

I completely disagree going after the state and local income tax deduction. It punishes states like California that provide more benefits at the state level (of course there is a lot of waste aka pensions). Still, I like having sidewalks.....

I would just have a hard limit on how much you can deduct from your taxable income. The middle class still benefits but the rich do not. And you don't have to raise rates to raise revenues.

Yes, we do indeed disagree about the state and local income tax deduction. I see no reason why the Feds should tax subsidize high income taxing states.  The Feds should be neutral about that, rather than subsidize and encourage that.  You obviously do favor such a subsidy.  Different strokes for different folks.

Hard caps make no sense (that is what I call a "cliff mechanism," which if in place makes the marginal tax of one extra dollar of income, like 10,000% or something), but as now, there could be a phase out - just one that starts at a lower AGI level, and progresses at a faster rate as AGI goes up until you lose them all (and AGI should include unlike now tax free municipal bond income).

[Marokai Backbeat]

..and now Boehner has already rejected it.

http://www.politico.com/story/2013/04/obama-budget-medicare-social-security-89658.html?hp=t2_3

but joe scarborough said this was the year republicans would start compromising more.

[badgate]

I loved what this account I follow on Twitter said:

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[Sbane]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes. Just what the mix should be depends on how much more revenue is "needed" to meet the metric, and frankly while I said 90% of GDP as a max, I would prefer that cruising speed be around 75%, so in downtowns, there is some elbow room for that percentage to grow.

I completely disagree going after the state and local income tax deduction. It punishes states like California that provide more benefits at the state level (of course there is a lot of waste aka pensions). Still, I like having sidewalks.....

I would just have a hard limit on how much you can deduct from your taxable income. The middle class still benefits but the rich do not. And you don't have to raise rates to raise revenues.

Yes, we do indeed disagree about the state and local income tax deduction. I see no reason why the Feds should tax subsidize high income taxing states.  The Feds should be neutral about that, rather than subsidize and encourage that.  You obviously do favor such a subsidy.  Different strokes for different folks.

I think the problem is that a federalist system leads to a race to the bottom. Each state trying to undercut each other by lowering income taxes and trying to attract businesses there. This is usually done on the backs of the poors. Ideally, the feds would pay for everything, and perhaps outline the ends, and let the states figure out the means to enact programs (which is why I like the medicaid expansion, though maybe more freedom should be given to states on how to administer the program. Hopefully the feds keep funding at least 90% of it at the very least). I do think states are better at knowing how to run programs in the best way, but struggle in finding a way to finance that. Anyways, a deduction for income tax helps those brave states with high income taxes somewhat.

[Torie]

There might be a better way, sbane, to send states some money on a more neutral basis, and more weighted towards their relative wealth, adjusted for the cost of living. But I digress, and have not honed my ideas into something akin to a gleaming granite kitchen countertop yet. If interested in what the gleaming granite countertop might look like, I will get back to you with that.

The race to the bottom is always an issue, but yes sending dough to states that love the income tax, is using a meat ax to effect lasik eye surgery as it were. But I have been for decades now quite hostile to States Rights. We are one nation. The States are useful for laboratories, but no more. However, well, we have our little Constitutional  history to contend with, and that is that.

I also think state and local governments have become more and more dysfunctional, particularly as newspapers have become animated corpses, just spitting out AP stories, and  largely ceasing to do investigative reporting of the pond scum state and local governments are awash in. So the doctrine of susidiarity, to the extent it ever had any merit, certainly does not now. The Federal government is in general, and putting aside its ability to run deficits, and print money, and so forth, much better run -much better, with higher quality public employees as well.

I am thinking of leaving a fair chunk of my estate, to a foundation that will fund state and local government investigations and studies, doing stuff newspapers have ceased to do. That and schooling for kids in low SES zip codes. Those are the two things that are most important to me right now.

[Sbane]

Well, California and the local governments within at pretty dysfunctional. Many other states around the nation are not. Businesses in many cases would rather deal with them, Democrat or Republican, rather than Washington DC bureaucrats of either party.

[Torie]

Well, California and the local governments within at pretty dysfunctional. Many other states around the nation are not. Businesses in many cases would rather deal with them, Democrat or Republican, rather than Washington DC bureaucrats of either party.

What high income taxing states do you have in mind as havens for "businesses," at least vis a vis their dealings with state and local government bureaucrats?

[Sbane]

Well, California and the local governments within at pretty dysfunctional. Many other states around the nation are not. Businesses in many cases would rather deal with them, Democrat or Republican, rather than Washington DC bureaucrats of either party.

What high income taxing states do you have in mind as havens for "businesses," at least vis a vis their dealings with state and local government bureaucrats?

No, I was talking about states in general.

[I spent the winter writing songs about getting better]

People paid into Social Security. The government took the money from the people it is suppose to 'help,' in the first place.

Ida Mae Fuller paid roughly $25 and collected roughly $23,000 in benefits over her lifetime. Paid for, indeed.

Some other rascals similarly made out like bandits.

LMAO. After looking up who Ida Mae Fuller is, you can see why this is just as ridiculous as what Oldiesfreak raves about as the most important differences between the parties.

[○∙◄☻¥tπ[╪AV┼cVê└]

..and now Boehner has already rejected it.

http://www.politico.com/story/2013/04/obama-budget-medicare-social-security-89658.html?hp=t2_3

LOL, good thing we have the far right-wing Republicans to save us from Obama's bad decisions.

[anvi]

Not that he has taken much of an initiative in the whole thing over the years besides being basically a Senate negotiator, but Obama is kind of boxed in on the budget from both sides.  Yes, the Pubs are not going to sign on to more revenue even if it came from gutting deductions and closing loopholes and such.  But if Obama made any serious play to scale back the CoL adjustment like this, or incrementally raise the retirement age, the same thing would happen that happened last December; Harry Reid would toss the proposal into his office fireplace.  As the recent gun debates have made clear once again, the White House has no control over Senate Dems.  That's the dirty little secret, folks--your president's name, at least when it comes to domestic policy, is Harry Reid. 

[krazen1211]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes.

AMT already does that. Just in a rather silly manner. It is of course a proper thing to nix if something is to be nixed.

[krazen1211]

People paid into Social Security. The government took the money from the people it is suppose to 'help,' in the first place.

Ida Mae Fuller paid roughly $25 and collected roughly $23,000 in benefits over her lifetime. Paid for, indeed.

Some other rascals similarly made out like bandits.

LMAO. After looking up who Ida Mae Fuller is, you can see why this is just as ridiculous as what Oldiesfreak raves about as the most important differences between the parties.

Ah, yes. The winners in the Social Security program ridicule the losers as they take their money. I suppose that was the point.

[Torie]

Why not just limit deductions?

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes.

AMT already does that. Just in a rather silly manner. It is of course a proper thing to nix if something is to be nixed.

The AMT only bites the upper middle class, not the rich. That is one of the ironies. You make more than say 400k-459K per year, and the AMT is gone (even in high tax states like CA, where the income tax deduction can be a big number. Medical deductions, investment expense and miscellaneous deductions however are only allowed when they exceed an amount based on percentage of AGI, so they disappear as AGI goes up.

[jaichind]

Chained CPI is also a tax increase as well.  Since it slows down the shifting upward of the minimum level for each income tax bracket to keep up with inflation, in de facto terms this is a tax increase and new revenue.  So Obama should really not push for more tax increase, Chained CPI is his new revenue. 

[jaichind]

That, if it were me, would certainly be part of the mix, starting with nixing the deduction for state and local income taxes. Just what the mix should be depends on how much more revenue is "needed" to meet the metric, and frankly while I said 90% of GDP as a max, I would prefer that cruising speed be around 75%, so in downtowns, there is some elbow room for that percentage to grow.

This will hit all the residents of states that voted for Obama (NY, CA, CT, NJ, MA etc etc.)  This is why this will most likely not take place.

[jaichind]

The AMT only bites the upper middle class, not the rich. That is one of the ironies. You make more than say 400k-459K per year, and the AMT is gone (even in high tax states like CA, where the income tax deduction can be a big number. Medical deductions, investment expense and miscellaneous deductions however are only allowed when they exceed an amount based on percentage of AGI, so they disappear as AGI goes up.

I agree.  My taxes are beyond AMT.  But there is another reason why AMT does not hit the super-rich, that is because AMT still taxes qualified dividends and capital gains at 15% (or 20% of high income earners.)  So the truly wealthy that does not even really work for wage income is also not covered by AMT.  This is one of the reasons why people like Romney and Buffet gets taxed at a lower rate than Buffet's secretary.  The way I see it is that we should either say interest/dividends/capital gains are income or they are not.  If they are income then they should be no different from wage income in terms of being taxed.  If they are not then the tax rate should be 0%.  I am not sure about this one so I have no established position.

[Torie]

The AMT should just be dumped, with dividends paid out deductible from C Corp income. Dividends  should yes, be taxed as ordinary income, along with muni bond income, but long term capital gains taxed at a lower rate (with a higher rate for gains attributable to the recapture of real estate depreciation, as now). Then phase out Schedule A deductions, all of them, not just medical and investment expenses, as your income goes up. Just put me in charge to do it. Thanks.

[jaichind]

Well, if I had my way, for sure capital gains will not be taxed or else government will create inflation and then tax the mostly fake gains.  Dividends and interest I am not sure about and I could go either way.  For sure Herman Cain's 999 plan comes closest to what I would prefer which is a dramatic drop in income taxes and a significant national VAT tax. 

[Grumpier Than Uncle Joe]

..and now Boehner has already rejected it.

http://www.politico.com/story/2013/04/obama-budget-medicare-social-security-89658.html?hp=t2_3

You'd think Obama would learn...

Excuse me? You'd think Boehner would learn! Claiming the Prez needs to "lead" and work with Republicans and then Boehner rejects out of hand a budget he hasn't even seen? Proof he is not at all interested in bettering the lives of Americans

You misunderstand me. Obama should learn that nothing he proposes will ever satisfy the GOP.

This is a brilliant point.  In Dubya's second term, he proposed exactly what he wanted, and shoved it so far up everyone's ass, he got it, in spite of 29% approval ratings.  Obama is in term 2.  Eff the mid-terms, now is the time to have some balls......but sadly I don't think he has them.

[Torie]

You think Obama can have his way with the GOP Pubs in the House Grumps?  Really?

[opebo]

You think Obama can have his way with the GOP Pubs in the House Grumps?  Really?

Yeah he's missing the point that the situation Obama faces is entirely different from that Bush faced.  You have one extremist right-wing party, and one center right party - the latter is the one eager to break ranks and compromise, not the former.  The end result is always going to be at best center-right governance, never actual centrism.  (and obviously anything left of center is an impossibility in america.)