normally I like Olbermann and Maddow

[walkitout]

But apparently, someone gave them each a shot of Teh Crazy and they are acting like, I don't know what they are acting like, but it isn't reality based.

Here's a summary of the tax deal that I think might be somewhat accurate:

http://www.walletpop.com/blog/2010/12/07/the-deal-on-tax-cuts-what-it-means-for-you/

It isn't _just_ unemployment for 13 months and tax breaks for everyone + extra tax breaks on estate and upper brackets. There's other stuff in there too, not just things the Republicans wanted, either. The annual AMT adjustment is included. Looks like the Making Work Pay thing didn't get extended, which is a little sad.

But wait! This is an even better source:

http://voices.washingtonpost.com/ezra-klein/2010/12/an_imperfect_but_not-that-bad.html

Looks like not getting Making Work Pay is just fine: instead there's a reduction in the amount of payroll taxes paid by employees (working out to more money in worker pockets and thus more money circulating in the economy, generating more demand and more jobs).

Klein is not an overly optimistic person in Washington, and he tends to be fairly accurate in
his reporting. Anyone out there looking for bipartisanship in Washington ought to be feeling pretty happy, and in general, I think a lot of us should be breathing a huge sigh of relief. For many people in the US, this could have been much, much worse.

ETA:

This is also excellent:

http://voices.washingtonpost.com/ezra-klein/2010/12/how_the_white_house_cut_the_de.html

I find myself in an odd position. I really wanted Clinton to win the primary (and obviously the general), altho obviously I voted for Obama in the general. Part of my rationale was that I didn't really think Obama would fight, and I didn't think he'd recognize just how hard it was going to be to deal with Republicans in Washington. I figured him for a deal maker, and a centrist, and I expected him to get completely screwed. In practice, he's been unbelievably adept at getting stuff accomplished, and while his positioning in public is consistently centrist, the actual legislation and programs happening are far better for my set of ideals than I would have anticipated. Simultaneously, a lot of people that I perceived as wrong in how they understood Obama during the campaign have become really disillusioned with him as President. I thought they were expecting too much (and I think I was right about that still) -- but they also got way more than I expected them to.

I think that anyone who is particularly concerned about how the base feels about a President immediately _after_ a midterm election is sort of missing the point about how the political cycle in this country works, especially when run through any kind of reasonable filter for high-information/low-information voting patterns. It'll be interesting to watch us run through this tax debate again in the context of a presidential election. That's a fight that everyone seems to really want to have, at a time that everyone wants to have it. Could be fun. :-)

Comments

[ethelmay.livejournal.com]

Wait. If I'm reading this right, we're cutting Social Security contributions by more than 15% (employer half remains 6.2%, employee half goes down two percentage points -- not two percent, as people keep accidentally saying -- to 4.2%). To me, that's either not good at all, or a very, very mixed good.

I'll take mixed good at this point

[walkitout]

It's only for one year.

Re: I'll take mixed good at this point

[ethelmay.livejournal.com]

And when they try to put it back, it'll be spun as a 50% "tax increase."

See http://economistsview.typepad.com/economistsview/2010/12/a-few-reactions-to-the-tax-cut-agreement.html#comments, who says "Though the revenue the Social Security system loses due to the tax cut will be backfilled from general revenues, the worry is that the tax cut will not expire as scheduled -- temporary tax cuts have a way of turning permanent. That's especially true in this case since labor markets are very unlikely to recover within the next year and it will be easy to argue against the scheduled "tax increase" for workers. In fact, it will never be a good time to increase taxes on workers and if the tax cut is extended once, as it's likely to be, it will be hard to ever increase it back to where it was. That endangers Social Security funding -- relying on general revenue transfers sets the system up for cuts down the road -- and for that reason I would have preferred that this be enacted in a way that produces the same outcome, but has different political optics. That is, leave the payroll tax at 6% on the books and keep sending the money to Social Security, and fund a 2% tax "rebate" out of general revenues. The rebate would come, technically, as a payment from general revenues rather than through a cut in the payroll tax, but in the end the effect would be identical. But the technicality is important since it preserves the existing funding mechanism for Social Security even if the taxes are permanently extended."

Re: I'll take mixed good at this point

[walkitout]

I like the rebate idea better as well.

However, this package is _way_ better than anything I was expecting since I was convinced (unwillingly) that the Bush cuts were not going to go away on schedule no way no how.

I am mildly curious, however: is this particular package better or worse (in your opinion, in the opinion of the people you are reading, etc.) compared to the possibility of the tax cuts expiring unmodified? Because that's sort of the hostage in this case.

Re: I'll take mixed good at this point

[ethelmay.livejournal.com]

Maybe it's naive of me, and/or selfish/self-centered, but I hadn't even been thinking much about the middle-class tax cuts either way. Certainly in our case we had been expecting the child tax credit (which is the major thing that affects us) to be cut back to $500 again or go away. That was just windfall stuff; I was surprised it hung on as long as it did. And I'd been expecting to have to pay more in taxes given that we're doing better economically than we ever have been, while such a large swath of people are doing worse.

Re: I'll take mixed good at this point

[walkitout]

Certainly, I think _I_ should be paying more taxes and was expecting that I would be paying more taxes and that's all good with me. I have, however, been assuming that people with middling incomes _really_ need the extra money. If that is not the case, and everyone in that middle zone is basically going to be okay, I certainly would prefer to go back to the taxation levels of the Clinton years, if not still higher.

I don't think it's naive, or selfish or self-centered of you to be thinking of this primarily in your own terms. That's how democracies work.

There's also a solid argument to be made that letting higher tax brackets get and keep an expensive break in exchange for everyone else getting and keeping an expensive break is not a good deal for us all collectively.

Re: I'll take mixed good at this point

[ethelmay.livejournal.com]

I had also been thinking mainly in terms of actual cuts, which would be felt less by people who were suddenly making a whole lot less money anyway (and therefore would be paying hardly any federal income tax to be refunded). But yeah, I can see that having the child tax credit suddenly halved (which could mean being a thousand or more in the hole compared to where one thought one was) could be awful, and I don't at all mean to insinuate that no one else might need it.

Re: I'll take mixed good at this point

[walkitout]

I'll further add that a lot of working people don't pay any income tax, but do pay into social security. While the politics of that historically have been such that keeping it all pay-in-get-paid, I think in the long run (20+ years), we should be moving in a different direction: means testing on whether you collect, and having payments into social security not be capped and perhaps be made on unearned as well as earned income. My sense is that the politics of the past that required the pay-in-and-get-paid structure have actually changed a lot with generations (like ours) that grew up with social security as a bedrock part of our world. There is a political community that wants social security to go away, but the rest of us, I think, would be perfectly happy to solve what problems might one day arise with social security, rather than watch people starve on the street, or freeze to death so they can make the rent payment. I don't think we need to _have_ the detailed discussion of how to "fix" social security this year (or even next year, or for a few years yet), but I'd hate to see assumptions about what is possible in terms of social security prevent us from giving a little relief to workers who make so little they don't pay federal taxes -- but still pay a chunk of their meager income to social security. Especially in a world in which people making hundreds of thousands of dollars a year _are not_ paying that fraction of their income on income above whatever the limit currently is.