Obama vs. the working class

[hfojvt]

About three weeks ago, President Obama announced a two year freeze in the pay of Federal Workers. When he did so, he said

"The hard truth is that getting this deficit under control is going to require some broad sacrifice," Obama said. "And that sacrifice must be shared by the employees of the federal government."

http://money.cnn.com/2010/11/29/news/economy/federal_pay_freeze/index.htm


As some may remember here, I supported Obama on this. First, because Federal workers make more than other workers. Second, because many Federal Workers will still get automatic step increases. Third, and most importantly, this made for a good frame to insist on sacrifices from rich people in the form of higher taxes. Obama could have said it again "getting this deficit under control is going to require some broad sacrifices."

Republicans, of course, insist that the rich should never ever have to sacrifice anything, so they fought to keep taxes from going up on rich people. Instead of fighting them, Obama worked out a deal that bore a strange resemblance to an unconditional surrender. Then he started promoting his 'deal'.

One of the things given up in his deal was the estate tax. I think Obama and Democrats were already giving up lots of ground on the estate tax, but here's the dollar figures for what was sacrificed.

"KLEIN: So how much does this cost? With a $1 million exemption and a 55 percent rate—in other words, what will happen if we do nothing—the estate tax would raise about $700 billion over the next 10 years. The Lincoln-Kyl version would raise less than $300 billion. And the compromise most Democrats have coalesced around—which was the 2009 level, with a $3.5 million exemption and a 45 percent rate—would've brought in a bit less than $400 billion." via the Daily Howler http://www.dailyhowler.com/dh121610.shtml

That looks like $40 billion a year. So Obama asks working people, albeit highly paid working people, to sacrifice to reduce the deficit, and that saves $30 billion over 5 years. Then a few weeks later, he works out a tax deal to keep people with million dollar estates from having to pay more taxes on them. And that costs $200 billion over 5 years.

Workers sacrifice = $30 billion
millionaires non-sacrifice = $200 billion

"getting this deficit under control is going to require some broad sacrifice"

Yet Obama has now ensured that dead rich people will not be asked to sacrifice. Nor will people getting millions of dollars that they have not worked for. Instead that sacrifice will be made by much poorer people who are working for their money.

Then, not only does Obama not fight against the upper class, he seemingly has the nerve to lie to us about it.

By now, we have all seen this chart.

http://www.whitehouse.gov/issues/taxes/framework/?utm_source=site&utm_medium=banner&utm_campaign=taxcutwhiteboard

A chart that not only hides the portion of the payroll tax holiday that goes to people in the top 5%, but also seems to understate the cost of the estate tax cuts. Klein says $80 billion for two years and the White House says $23 billion? Which one is wrong?

My bet is that they are both right, but that one is being dishonest. Because Obama and Democrats were ALREADY willing to give up $57 billion in estate taxes, the deal only adds $23 billion to the total. So the Obama Whitehouse chose to sweep $57 billion under the rug, in order to convince the uninformed that his deal was better than it really is.

That is speculation on my part, but I would note that the difference between the $400 billion and $300 billion in Klein's quote is approximately $20 billion over two years.

I still think the country would be better off if we had a President who fought for the bottom 95% and who was honest with us, even if that meant that all the tax cuts would expire.

Yes, this is all water under the damn, but I still think he deserves to get called on it.

[Creative]

1. Actually, it's $5 million for the single dead and double that for couples.

And that money has already been taxed, so what's the big deal?

[hfojvt]

14. you are kidding, right?

It's $5 million now, it would be $1 million if the Bush tax cuts had been allowed to expire - OR if the Bush tax cuts for the wealthy had been allowed to expire, like Obama and every Democratic politician promised in election 2008.

And the money has not been taxed. The farm that my dad inherited was worth $30,000 when he got it in 1961. It is now worth $900,000. None of that gain has ever been taxed. The 1,000 shares of 3M that my dad bought in 1970 for $10 a share has been split four times and is now 4,000 shares that sell for $40 a share. None of that gain has ever been taxed.

[Creative]

20. No, I'm not kidding.

Inflation plays a big part in the worth of real-estate over long periods of time.

As far as the stocks go, a tax on capital gains will be due when they are sold.

[hfojvt]

23. then you are seriously deluded

sure there will be a tax on capital gains when the stocks are sold, but what is the basis? Stock that cost $50,000 is worth $500,000 when I inherit it. If I sell it later for $550,000 then I am only going to be taxed on $50,000. The other gain, of $450,000 was never taxed.

And, of course, capital gains are taxed at a lower rate than wages, which are often taxed twice.

Here's my last paycheck. Taxable earnings this year $12,568.61. Included in that sum are FICA taxes of $822.08 and medicare taxes of $192.25. Not only that, but the state of Kansas considers that the $690.64 that they take for my pension is also taxable income. So first $690.64 is taken from my yearly income, and then I have to pay taxes on that amount.

Sure, the land I bought in 1987 for $4500 would cost $8,498 in 2009 with inflation. Well, in 2009 I sold it for $22,000. So it pretty clearly outpaced inflation.

[Hannah Bell]

16. no, it's *not* necessarily money that's already been taxed.

[Creative]

19. If it was earned, it was taxed.

Besides that, it is not my money and I don't concern myself with what others do with theirs.

[Hannah Bell]

21. "earned" -- by what definition? plenty of assets held by the wealthy haven;t been taxed for a

generation, at least.

& since the gov has no problem taxing my "earnings" multiple times, i have no problem taxing the estates of the super-rich.

[Creative]

22. When someone dies in the uncivilized world, the vultures devour the remains.

Thankfully, in a civilized society, the remains of the deceased are protected from the vultures.

[hfojvt]

24. right, because a big pile of momey

should be respected just like a person's physical remains.

But if you really don't like the idea of taxing a person after they are dead, then I am willing to compromise and drop it. Instead, we can tax large fortunes while the SOBs who stole them are still alive.

[Creative]

32. What do you have so much contempt for those who work hard and are successful?

If you do not attend the funeral, chances are, nothing has been left to you.
Is that why you are so angry?

[Hannah Bell]

25. lol. thanks for stopping by.

[Brookyn_Queen]

29. Money gets taxed as it goes through the economy numerous times.

Why should rich people's money be taxed fewer times than any one else's?

The point of a estate tax is to make sure that we keep the country small d democratic by making sure that we do not have a landed gentry where money and power can be concentrated. That would be the big deal. The idea that money should only be taxed once is a childish one generally put out there by the selfish Ayn Randian freaks who ought not have any credibility anywhere.

[Creative]

33. Well, Mr. Soprano, I didn't see you at funeral....

[Poboy]

2. recommend.

[rug]

3. There is no woeking class, there is no ruling class. There is only the American class.

Now even as we speak, there are those who are preparing to divide us -- the spin masters, the negative ad peddlers who embrace the politics of "anything goes." Well, I say to them tonight, there is not a liberal America and a conservative America -- there is the United States of America. There is not a Black America and a White America and Latino America and Asian America -- there’s the United States of America.

http://www.americanrhetoric.com/speeches/convention2004/barackobama2004dnc.htm

Someone should be along any moment now to tell us we weren't listening.

[eridani]

10. There is only a CORPORATE America n/t

[hfojvt]

15. well I appreciated a call to unity

those of us in the bottom 95% need to be more united, at least on economic issues. Both parties ought to be fighting for the bottom 95%. Instead, neither party is.

[Foo Fighter]

17. But that's exactly what the top .1% don't want.

That's the whole reason they use issues like abortion and gun control and "national security" or whatever to distract the populace and get them to vote on single issues. If people were to put everything else aside and vote strictly on economic issues, there would be hell to pay. Just look at Jim Webb's comment regarding his amendment regarding his inability to get a vote on limiting Wall Street bonuses:

Webb has pushed for a onetime windfall profits tax on Wall Street's record bonuses. He talks about the "unusual circumstances of the bailout," that the bonuses wouldn't be there without the bailout.

"I couldn't even get a vote," Webb says. "And it wasn't because of the Republicans. I mean they obviously weren't going to vote for it. But I got so much froth from Democrats saying that any vote like that was going to screw up fundraising.

http://www.dailykos.com/story/2010/11/8/222550/498

Yes, that's right. The Dems, once the "stalwart" representatives of the working people fighting for their interests against the corporate interests represented by the Republican party have given in to the rich because they don't want to "screw up fundraising." The two parties are now one, fighting for the same corporate dollars and against the interests of the American people.

Jim Webb's quote speaks volumes. I can only hope it will be used by a second party that will hopefully emerge soon because if not, we are truly screwed.

[hfojvt]

18. many on the grass roots are passionate about various issues as well

But there's no reason, in theory, that those issues should matter. Since the bottom 95% are clearly the vast majority, then it seems logical that there would be a pro-worker party that is pro abortion and a pro-worker party that is anti-choice. Instead we seem to see the opposite, an anti-worker party that is pro-abortion and an anti-worker party that is anti-choice.

But money does become an issue. Trying to reach 300,000 voters and to cover 14,000 square miles that comprises my district, is going to require a fair amount of money.

But again, the working class has a fair amount of money. The Democratic candidate in my district got 66,000 votes. If 50% of those voters had donated a mere $10, she could have mounted a much stronger campaign. Is $330,000 enough to win against an incumbent who has $1 million and also is in a Republican district? Definitely not. But imagine what could be done with legwork. If 1 out of 100 would volunteer, again that would be a much stronger campaign. 660 volunteers. Are you kidding me?

Of course, that is something a candidate always tries for and usually does not get - hundreds of donors and hundreds of volunteers, but my point is that these battles are winnable if enough people care. If the ants get together they can overwhelm the grasshoppers.

As for a new party, that seems like a hollow dream. Imagine a green party. First they need a candidate, then that candidate needs donors and volunteers. If he/she is a decent candidate who can win a majority in the district, then why can't they win the Democratic Primary? If they cannot win a Primary, then how are they gonna win in the General election against a much better funded Republican?

Secondly, how is a new party supposed to create a network of volunteers? The Democratic Party already has a structure of County Chairs and precinct people. If Kansas is any indication, that structure is often very short of people, especially active ones, but it has more than nothing. A new party is going to have to build such a structure from scratch. Which is a crazy amount of work. It is much easier to just win the Democratic Primary and then comandeer the structure (and help make it stronger) of the Democratic Party.

It is true, of course, that such a rebel may find themselves working against that machine in the primary and also against a better funded opponent, but, if you cannot defeat that person and that machine in the primary, then what hope do you have in the general?

[CrispyQ]

26. Please don't use the term 'pro-abortion.'

I don't know anyone who is pro-abortion. We are pro-choice & we support policies, such as sex education & access to birth control, that help women avoid being in situations where they face making that choice.

[hfojvt]

28. I know several that I would call pro abortion

but why argue about abortion on a thread about tax policy?

My other guess is that if you started a thread with the thesis "nobody is pro abortion" and then went on to describe the difference between pro-choice and pro-abortion, that it would quickly generate many more replies and Recs than my own thread about tax policy.

In other words, the country is divided over abortion because even the left thinks that abortion is more important than tax policy. But I think it is tax policy where we should be able to unite people. All of the bottom 95% should be on the same side, but we are not because this issue is such a low priority - for both sides.

[CrispyQ]

30. I didn't argue, I asked politely.

I thought maybe you weren't aware that many liberals consider 'pro-abortion' to be a derogatory, right-wing term. In addition, it is exactly this type of terminology that evokes strong emotions regarding this issue & creates further division.

[hfojvt]

31. I suppose you are not arguing now either.

You made a request and then an argument for why your request should be followed. I call that arguing.

But it seems that we are going beyond the abortion issue. That people on your side not only want their way on the issue, but they want to control the language as well.

Yet you seemed perfectly fine when I called the other side anti-choice, and I am guessing that they do not like that very much either.

Having seen the strongest terms get thrown about over the Stupak amendment, which did not at all involve the right to choose, I consider pro-abortion to be pretty accurate for many of the people here, whether they find it derogatory or not.

[Hello_Kitty]

4. Do you have the numbers on the payroll tax?

Because I agree with you. I think a pretty substantial chunk of the $112bn that cut will cost is going to higher income people.

[hfojvt]

6. just the numbers I posted here

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=27165&mesg_id=28881

"Less than $6 billion of the payroll tax cut will goto households making less than $20,000 a year. And there are 22 million such households. On the other side, AT LEAST $14.5 billion will goto households making over $150,000 a year. And there are only 6.6 million of those households. Another $18 billion at a minimum is going to households making over $80,000 a year."


A very rough underestimate. $14.5 billion is the absolute bottom figure. And so is the $18 billion. About 80% of households make less than $80,000 a year.

[Hello_Kitty]

8. Thanks! Your numbers are pretty close to what I was guess-timating too.

I'd figured that a quarter to a third of the payroll holiday was going to people making more than $75K.

[hfojvt]

9. well I calculated a lower limit using household income

it's definitely over 30%, but without specific wage information ... I could use IRS numbers, but the debate is sorta over now, unfortunately.

[dgibby]

5. Re your assertion that Federal Workers make more

than those in the private sector, you might find this interesting:

http://factcheck.org/2010/12/are-federal-workers-overpaid/

[hfojvt]

13. not really, I may even have read that before

My argument is that a GS-9 makes $41,500 a year, at least, and about 40% of households make less than $40,000 a year. So I am quite sure that that is a good-paying job. Not to mention higher grades. It would be nice if somehow those GS-5 and lower could get raises, but myself, I don't worry much about people GS-9 and up.

[undeterred]

7. Remember Main Street vs Wall Street?

Great campaign theme.

[Cal Carpenter]

11. It's the ruling class vs. the working class

It's not even really about Obama. He's just a player in a role, as far as I can tell.

[hfojvt]

12. well he is supposed to be a player on our side

[Overseas]

27. Another sad K&R. //nt