"Job Crushing Tax Hikes"

I realize we are now witnessing political theater and only the participants know for sure where we will really end up when there is a compromise, so I am not bothering to respond to some of these things that irritate me.

However, enough Republicans have used the term "Job Crushing Tax Hikes" to characterize what President Obama is trying to get them to agree to that I feel I must respond.

Over the years a number of industries have successfully lobbied members of both parties to give them tax breaks on certain activities.  Now these companies pay effective tax rates of less then 20% rather then the list price of 35%.  Hedge Fund employees get compensated with income that goes directly into the hedge fund investments.  The Hedge Fund deducts the payment as an expense so there is no tax at the company level. For the employee, magically, this is not taxable income until the investment is liquidated.  If the investment is unsuccessful, the money is lost and there is a tax deduction for that.  If the investment is successful, it is taxed as a capital gain even though capital gains are otherwise made with already taxed money.  Meanwhile, the small business entrepreneurs that create most of the jobs pay income at the personal tax rates.  Well, you can't reduce rates for them until you eliminate tax subsidies to others.  And we had plenty of job creation with the higher tax rates and balanced budget that Bush I/Clinton brought about.

Many point to the fact that other countries have lower tax rates.  Well those other countries don't have massive tax deductions that reduce the effective tax rates for those with deductions in the U.S.  Other countries have universal health care and don't rely on business to pay anything for health care beyond their taxes.

The President tried to control the cost of health care and the Republicans are advocating repeal of that with no plan for any other replacement.  On the Revenue side, to help minimize how much spending must be reduced, the President is trying to reduce the tax subsidies that help some avoid paying their fair share.  I don't understand why the President doesn't tie these revenue increase to paying for the War on Terror like I do, but I finally heard one senator do it last night, so maybe we will hear more of this soon.

When two sides disagree, a compromise is in the middle.  That is where the President is, but the Republicans are not.

For the Republicans this is a war that if they win they will dismantle every aspect of the social safety net.   That is Grover Norquist's goal and the Democrats cannot allow that to happen unless the independent voters wish it.  There has been no sign of that in any election (witness the Democratic win in the Western NY Republican district).  So now the Democrats get to just say no and we will see what chaos this impasse results in, but the impasse is the fault of the Republicans so let the chips fall where they may.

Hopefully, logic will eventually prevail.