"Gang of 6" Plan - $1T in tax increases

[daviddee]

...

[Romulus]

Man that is depressing... if that crap passes.

[Brett85]

This is just aweful.

[AuH20]

The worst is that you give Obama an escape hatch with this dreadful bill. At least CCB forces him to come up with an alternative which he obviously cannot produce. All he can do at the moment is fear monger and denigrate.

[TCE]

For anyone just tuning in, here are the Gang of Six. (http://www.ibtimes.com/articles/183213/20110719/who-are-the-gang-of-six-senators.htm)

Mark Warner (D-Virginia)
Dick Durbin (D-Illinois)
Kent Conrad (D-North Dakota) ~ Lame Duck/Retiring

Tom Coburn (R-Oklahoma) ~ The Psuedo-Conservative who is best friends with DeMint.
Mike Crapo (R-Idaho)
Saxby Chambliss (R-Georgia) ~ Classic RINO.

[AZKing]

Well, people are always bitching that "rich people" should pay more taxes. This will definitely hit the lower 50% that pays no federal income taxes at all.

edit: I assume this is another 10 year plan?

[headhawg7]

This is just aweful.

To say the least.

[daviddee]

...

[Rael]

They are a gang alright... a gang of looters and thieves...

[libertybrewcity]

You would think the Repubs would be staying away from this stuff so close to election season. They know they are going down. Crap, none of them are up for reelection:(

[ord33]

Well, this would screw me more than I can imagine because of my job which is real estate with a focus on vacation and rental properties.

Coburn for a short while was no longer part of the Gang of 6. Not sure if it became a Gang of 5 or they got a guy off the bench for a while???

http://newsok.com/coburn-rejoins-gang-of-six-and-endorses-3.7-trillion-plan-to-reduce-deficit/article/3587082

[amonasro]

They are getting desperate.

Interesting and unrelated side note, I sang in an opera with Tom Coburn's daughter Sarah a few years ago. She is quite talented.

[daviddee]

...

[VBRonPaulFan]

No. This hits the 50% who already pay all the taxes.

The standard deduction for a married couple is: $11,600

In order to deduct mortgage interest and property taxes they have to exceed $11,600.

$300K mortgage and $3K in property taxes would just barely break it. Depending on length of mortgage.

This really hits the people with homes valued above $500K and mortgages over $400K or so. Property tax would be: $6000 to $10000 (depending on location) and mortgage interest would be in excess of $12K a year.

As to the state taxes... If you pay no taxes, then this will not affect you. If on the other hand you actually pay taxes you are going to pay even more.

This is a major tax increase for the people who are already paying a fortune.

There is much more involved in just 'barely breaking' your std ded. limit. Keep in mind that state/local withholding goes towards your schedule a amount as taxes paid. But once you 'barely break' it with your home mortgage interest/property taxes, you can claim a plethora of other expenses such as charitable donations, unreimbursed employee expenses, tax prep fees, etc that people aren't usually eligible to write off. Being able to itemize puts you at a major advantage because there is much more you can claim that you woudn't realized added up very quickly. i bought a 250k house in 2008 with a loan at 4.5% interest, and last year i was easily able to itemize.

i don't think they'll actually do away with the home mortgage interest deduction or prop tax deduction. i do think they'll actually get rid of AMT though, because congress has wanted to do away with it for quite some time. but getting rid of the home mortgage interest deduction would probably absolutely crush anything left of the housing market because being able to write that interest off is a huge reason many buy a home in the first place. without that benefit, you'll probably see a flood of new homes for sale and even more dropoff in home sales. it would just be idiotic at that point, in this climate, to purchase/own a home unless you can afford to basically buy it outright, or plan to live there forever.

[asurfaholic]

If this passes there will be absolutely NO benefit to owning a home.

They will be eliminating: mortgage interest deduction, property tax deduction, and you will now pay capital gains on your primary home sale.

The last part is most interesting. Does this now mean they will bring back the ability to deduct capital losses on your primary residence?

The mortgage interest deduction is fine. It was a system that benefited home owners over renters.

Property tax deduction on the other hand was a TAX and the deduction eliminated paying taxes on money twice.

They are also eliminating STATE TAX deductions.

Why is that part fine? Taxes are bad - if they eliminate that part, even if you don't own a home then you will still suffer, because less money will be spent in the private market. More money taxed is more money wasted. More taxes = less jobs. This is pure evil if this gets passed. I already almost pay more in taxes than I do mortgage. Taxes will likely be my number 1 highest bill if this crap goes...

I want to freaking opt out of this crap. I dont want to finance illegal endless wars and a broken welfare system. I want to keep what I earned. I work hard, why do I have to give so much of it away?

[Brett85]

Surely the Republican members of the house will vote against this. Almost all of them signed a pledge not to vote for a tax increase.

[daviddee]

,,,

[VBRonPaulFan]

don't be so sure... neither party is willing to 'accept' blame for not letting the debt ceiling to get raised. they are all looking for an easy way out.

[madengr]

I added that comment as in a truly free economy a government would not be influencing decisions with breaks and favoring one group of people over another.

Right now, the USGovt endorses/rewards citizens who: go into debt, marriage, home ownership, babies, retirement savings, etc.

No, a tax deduction is not a reward. That's the same logic as the government "subsidizes your health-care because they don't tax it", as if all your income belongs to government and they dole it back as they see fit.

A truly free economy would be no taxes.

[yokna7]

The price of market manipulation. Their solution is even worse than just raising the debt ceiling. Fucking amateurs.

[HOLLYWOOD]

No elimination Taxes on retirees collecting Social Security like Ron Paul wants to do? NOPE

He's Colburns site on the "BACK IN BLACK" plan.

http://coburn.senate.gov/public/index.cfm/back-in-black-a-deficit-reduction-plan

Love this part:


For the first time since 1983, Social Security posted a deficit in 2010 – $37 billion – and is now permanently running cash flow deficits. Over fiscal years 2010 to 2021, the program‘s cash flow deficits are projected to total $630 billion.

Some downplay the coming crisis by alleging ―well funded‖ trust funds are a reason to delay reform. However, because Congress has effectively stolen and spent all excess revenue due to Social Security over the years, the trust funds are empty except for $2.6 trillion in promises from a bankrupt government.

The $2.6 trillion is really an ―I.O.U. the federal government owes itself, so the government can only raise this ―I.O.U. money by issuing more public debt, raising taxes or cutting spending elsewhere. The current Director of the Office of Management and Budget (OMB), Jacob Lew, basically acknowledged the phony nature of the trust funds when he was leading the OMB for President William Clinton. Under Lew‘s leadership, when commenting on the FY 2000 budget, OMB explained that the trust funds‘ balances are nothing more than a ―bookkeeping‖ device and ―do not consist of real economic assets that can be drawn down in the future to fund benefits.

It is because the trust funds are merely an accounting mechanism and do not contain real economic assets that President Barack Obama recently warned that he ―cannot guarantee‖ Social Security checks would be mailed to beneficiaries if the government failed to raise the debt ceiling by August 2nd – the date the U.S. is estimated to breach its statutorily-established borrowing limit.5 The reality is the government can only raise Social Security ―I.O.U. money by issuing more public debt, raising taxes or cutting spending elsewhere.

But it is not just Social Security‘s trust funds that are in financial trouble. Unfortunately, Social Security‘s disability programs are in worst shape and face insolvency in the immediate future

[oyarde]

This is so bad , it is difficult to even predict and forsee all of the negatives .

[ihsv]

They WANT to bankrupt us. They WANT to squeeze us by the neck and get every last drop of blood they can before things really go south. No sane person would do this type of thing unless they intended to euthanize the already comatose housing market, and bury the corpse they call the economy.

edit: Btw, this is another one of their "emergency measures." They'll pass it under threat of financial armageddon.

[Sola_Fide]

What is Coburn thinking...

[TCE]

Surely the Republican members of the house will vote against this. Almost all of them signed a pledge not to vote for a tax increase.

I thought that, too, until I got this from Mark Kirk (R-IL):

Spend Less, Borrow Less and Tax Less

Deficit Reduction Commission Plan Would Cut $4 Trillion from Deficit

Adopt the Balanced Budget Amendment

Dear Friend:

The President established a bipartisan commission to address our skyrocketing federal deficit. The Commission combined conservative leaders, Senator Tom Coburn (R-OK) and Chairman Paul Ryan (R- WI), with leading Democrats Senator Richard Durbin (D-IL) and Chairman Kent Conrad (D-ND) and many other Members of Congress and leading economic minds. The Commission recommended a detailed package of $4 trillion in deficit reductions which I believe should be coupled with passage of a Balanced Budget Amendment to the Constitution.

This broad approach is the strongest way to reassure markets, calm our allies, cut spending and prevent future borrowing against the economic future of young Americans.

Congress should not give a $2.4 trillion blank check to the Administration. Such an act would risk repeating the mistakes of the Irish and Greek governments that said 'yes' to every spending idea and 'no' to their children's economic future.

We need to make hard choices to stop spending money we do not have. That is why I back the recommendations of the bipartisan Deficit Commission. In brief, the Commission recommended:

1. Capping all discretionary spending by the government.

2. Reforming entitlement programs to ensure they are financially strong through the baby boom's retirement.

3. Reforming taxes by ending all tax expenditures (except the mortgage interest and charitable deductions) and lowering the top rate from 39% to 28%.

These actions are controversial but lead to trillions in deficit reductions. On top of these reforms, Congress should send the Balanced Budget Amendment to the Constitution to the states for approval, ensuring that such borrowing cannot happen in the future.

Our country has faced tough times before. The Washington Administration faced hyperinflation, Lincoln had borrowing woes, Roosevelt faced down the Great Depression and Reagan defeated inflation. In each case, Americans mastered their economic challenge. This is our challenge. If we back fiscally conservative policies that cut spending, reform entitlements and enact the Balanced Budget Amendment, we will prevail again and emerge from this economic crisis on stronger economic footing.

Thank you for taking the time to share your concerns with me. Please feel free to call me at (312) 886-3506 if you have any questions or concerns before the Congress.

It is an honor to serve you and your family before the Senate.

Very truly yours,

Mark Kirk

US Senate


Translation: This is the Bipartisan plan that will be passed. Accept it. With Paul Ryan on their side, the House GOP will bow to this as well. Like we've all been saying for months, this was all a dog and pony show.

[Freedom 4 all]

Now (as in, before this passes) would be an EXCELLENT time to short the housing market. The paranoid part of my mind thinks that advocates of this strategy are doing exactly that.