House Democrats are still good for something. They can prevent Congress from overriding presidential vetoes, even when there are enough Senate Democrats on board to sell the administration out. This is what just happened on the issue of tax-extenders, the package of tax breaks and write-offs that will expire if Congress doesn’t reauthorize them. It includes everything from corporate and small business tax credits to the American Opportunity Tax and Earned Income Tax credits.
Senate Majority Leader (for now) Harry Reid tried to cut a deal with the House Republicans that wouldn’t have protected the Democrats’ top two priorities. The administration balked. And then they rounded up enough opposition in the House to prove to Reid and the Republicans that the deal would need to be sweetened or it wasn’t going to happen. An attempt to override a veto would fail because Nancy Smash would make sure it failed.
If you interested in this topic, there are two schools of thought on Capitol Hill about the administration’s actions here. The paranoid school thinks Obama is just using progressives now to keep their leverage for later negotiations with Mitch McConnell in which progressives will be totally sold out.
The other view is that, without another election to worry about, the president is increasingly staking out more progressive positions, and that there are no indications that the administration is all that interested in a giant corporate tax reform bill anyway.
I suspect the truth is somewhere in between. A unified Republican Congress has to govern now, and that means that they have to find something to work on with the administration. Corporate tax reform is a natural for them. The administration probably wants to go into negotiations with maximum leverage even if they don’t ultimately anticipate striking a deal.
Of course Obama would be willing to make a deal that’s not really progressive. But it would be substantially better that the current bill. And the progressives in the House know this too – they’re not being played.
I have to agree that I think this is the likely play – both the President and the Dems in the House are looking for a better deal.
As an aside I’ve thought a great simplification of taxes would be to reduce the corporate tax rate to zero while changing the tax rate for dividends and capital gains to be the same as for ordinary earned income. (Also treat inheritances as ordinary income once the assets are liquidized or after a period of time.)
This way corporations don’t have to do all that crazy shit to avoid taxes but their owners (both the in-theory-not-in-practice owners known as the shareholders and the in-practice-not-in-theory owners known as the board and CEO) would pay taxes like everyone else when they tried to convert corporate profits to personal profits.
Probably also try to create a special tax rate of 99% for corporate perks over a basic amount. GE, for example, is paying literally 10s of millions annually for perks (clubs, houses, airplanes, entertainment, etc.) enjoyed by long-ago-former-CEO Jack Welsh. If GE’s board wants to do that, fine, but the tax rate should be so high that it doesn’t benefit Welsh.
Corporations are “people” — people pay taxes.
Your suggestion is a return to the “gilded age.” How did Rockefeller amass so much wealth that his descendants have remained wealthy? No corporate income tax gave him more cash with which to buy up and squeeze out his competitors.
So, no to a zero tax rate for corporations. But there’s no reason why corporate income for taxes should vary much from corporate GAAP income.
“But there’s no reason why corporate income for taxes should vary much from corporate GAAP income. “
Very very true. I think GreenCaboose was trying to deal with the complaint that the earnings are taxed twice, hence should be lowered (or even zero) for individuals.
I myself would like to see a return to full dividend taxation with only a threshold so that small earners can use 1040A or 1040EZ. Say $100.
Corporate bonuses surely shouldn’t be taxed as capital gains or dividends. They are straight out pay. Perks? comme ci, comme ça I do get angry that I have to pay income tax for the “free” life insurance that USPS gives me and I neither need nor want. Next I’ll be taxed on employer paid health insurance or employer portion of FICA taxes that’s always listed on my annual compensation report.
Oh, just tax all of it. No deductions. That would, of course, require a long phase-in period for individuals because the taxing structures that have been built up for the past seventy years are a mess.
One factor often overlooked as to why this country doesn’t have UHC and working class incomes began to flat-line in the early 1970s was that employer paid/managed health insurance is tax free. Perfectly rational for people not to pay any attention to the ever ballooning cost of health care because they were more or less insulated from that inflation. Plus stuck because the previously existing lower cost option, public health care facilities, that were always underfunded became more so.
There’s no simple way to tax income. Even if we say “Sure, let’s tax everything,” one still must determine what’s income and what is not. As a “for instance,” if one rents out a home, the rent less expenses is taxed as income. If one lives in one’s own home, the rent saved is not considered income. Some have suggested both should be treated the same. I think that’s insane. But the tax code will always be complex for as long as income is the subject of taxation.
Huh? If one lives in one’s own home, the rent saved is not considered income.
You’re confusing income producing property with consumption property. There’s no such thing as imaginary income based on imaginary dollars saved by making a different consumption choice. Income is easily defined. It’s all the freaking deductions (expenses) that have been built into tax codes that are problematical. For example, real estate taxes are deductible for home buyers/owners which then reduces that individual’s taxable income. Whereas renters get no similar deduction even though their rents include an amount that their landlord will pay for property taxes. That’s but one reason why lower income people accumulate so little wealth.
If you are referring to dividends and interest, the practical reason is tax form simplification. But I wonder how many people do their taxes from scratch anymore. I was going to do it last year after about ten years of using tax programs and found that the public library no longer stocks tax forms and the IRS won’t send them to you. Both just tell you to download them.
The calculations have gotten incredibly arcane. There is no easy way to compute how much of your Social security is taxable; you have to follow a five or six step algorithm and it depends on what else you’ve earned. Not many blue collar people do their taxes. By asking around, I found that those who do are more computer oriented and either use a tax program or go to H&R block or go to a private accountant. An astonishing number of people do the last. My own sister goes to a tax accountant to prepare a 1040EZ! I’ve offered to do it for her, after all the usual software license allows for five e-files and I only do one. She refuses. I think she is embarrassed by how poor she is.
Well, the (first) Gilded Age was even better for plutocrats than you say. After 1871, they paid no income taxes whatever. Neither corporations or individuals paid. When Congress passed a new flat rate income tax in 1894, the reactionary [Roberts] Court of the day immediately declared it unconstitutional. The 16th Amendment, permitting income taxes, wasn’t ratified until 1913.
So basically there were no federal income taxes in the first Gilded Age, which appears to still be the goal of the “conservative” movement in 2014. That’ll get you some REAL plutocrats, not the second and third tier pikers we see today!
I wouldn’t call the Koch brothers, the Waltons, Steve Balmer or Carlos Slim pikers.
Carlos Slim is Mexican.
Yes, I know. He is also a present day plutocrat.
why mention him? he’s not subject to US income taxes?
the Mexican 16 families keep themselves out of the news
http://mexicovoices.blogspot.com/2014/10/many-mexicos-iguala-and-ayotzinapa.html
has nothing to do with usa tax structure
Fuck that shit.
For four years we’ve gotten NOTHING from Congress. No judges, no new minimum wage law, no environmental effects, hell no CABINET appointments.
Screw ALL negotiations. Let the damn Repthuglicans hang from their own rope and try to defend it in 2016.
The paranoid school thinks Obama is just using progressives now to keep their leverage for later negotiations with Mitch McConnell in which progressives will be totally sold out.
Are we allowed to name these people as the treacherous white supremacists they are, or are we still excusing their conduct?
That’s the realist school.
Yeah, that’s what he said. Paranoid.
I’m not paranoid. Everyone really is out to get me!
:-;)
Since we now have the mirror image of the situation in 2006-08, when the New Pelosi/Reid Dems confronted the felonious co-executives Bush junya and Cheney, it will be interesting to see if our wonderful journalists look back to compare the behavior of that Dem Congress with the current Repub one.
Of course, that Dem Congress failed to rein in Bush to any degree whatever, and indeed voted with him on a number of occasions as I remember—on such things as indemnifying and immunizing the telecoms for their illegal behavior under Bush’s illegal surveillance programs. And of course Bush’s War was not only funded in full but escalated.
Now of course, the conventional wisdom is that a DEM prez can’t possibly expect to have the Repub Congress even fund the gub’mint unless it he agrees to sell a variety of Dem programs and policies permanently down the river.
Funny how this works.
Democrats still approved Bush appointments. I’d be surprised if Obama gets a single judge appointed in the rest of his term. If a Supreme Court seat opens, expect open warfare to break out.
Yes, although this also highlights a difference between a Repub Congress and a Dem one, not that it would be spotted by our corrupt corporate media.
I recently saw someone use actuarial tables to calculate the expected chances of a vacancy on the S. Ct in the next two years. It was something like 25-30% expected.
Can you imagine if Scalia were to have his hot Italian sausage-induced coronary? Pandemonium.
have said it before.
no more elections.
last Black nerve snapped.
No.more.phucks.to.give.
One more, rikyrah. Got to stop Rahm.
No.
They.
Don’t.
They have been richly rewarded for absolutely NOT governing. This is what happens when you elect people who think that ‘government is the problem’
THIS IS WHAT DROWNING IT IN THE BATHTUB LOOKS LIKE! .
That’s my thinking too. I’ll believe it when I see it.
A thousand times this.
Not only do Republicans absolutely know that they do not have to govern, they know that if they don’t, voters (the few of of left that give a damn about voting and can still vote at all) will blame the black President.
Republicans spent the last two years screaming that every Democrat running for Congress was no different than Obama himself. They gained 8 (soon to be 9) Senate seats and more than a dozen House seats as a result. They got a huge assist from staggering Democratic incompetence that somehow decided on the plan that spending the election running away from Obama was better than actually being for something.
There is zero reason right now to believe that 2016 will be any different. Dems I hope will prove me 100% wrong.
But the fact remains that Republicans will never be punished for the last six years.
Obama IMO, is generally a Matt Yglesias economic type in that he favors neoliberalism with redistribution but has a tendency to value nwoliberalism over redistribution. So sell out eventually.
So we have a fire-wall of sorts, but only if the President vetoes. I think we should watch to see if this happens and on what. There’s probably no truer test of the Democratic Congress’s bottom line below which they will not go.
As for taxes, eliminating corporate taxes allows individually-owned corporations to become huge tax dodges for wealthy individuals who could turn their entire income over to a corporation and have the corporation provide all of their consumption as business expenses. And the whack-a-mole plugging all the games with business expense deductions would be more of a nightmare.
The simplest system is to treat all individual income as income and all corporate revenue as income, and tax those at the same highly progressive rates so that a person making $100 million income and a corporation making $100 million income would pay the same marginal rates on the last dollar–I do believe that 77% would be fair. And a person making $100,000 and a corporation making $100,000 would pay the same marginal rates on the last dollar — say 10%.
The whole progressive structure could be based on a formula that incorporated the place in the income distribution as a term. That would deflate bracket creep.
Alas, that is not likely to happen. Ever. It would reduce the opportunities for politicians tinkering with it.
A multi-billion dollar corporation, say a car company selling three million cars at an average of $30K apiece should pay 77% income tax? On maybe nine billion profit, leaving an after tax profit margin of a little more than 2%? Commercially non-viable.
From the Hill article:
The Congressional Democrats are truly delusional.