The public policy blog of the American Enterprise Institute

Subscribe to the blog

Discussion: (27 comments)

  1. As long as both sides are engaging in idle fantasy, Pethokoukis’ plan seems like a good idea.

    1. Todd Mason

      No idle fantasy on Obama’s part. The House Rs’ choice is vote against a tax cut, or refuse to act on it and screw up the economy. The injury to be added to this insult is that the recovery will continue apace even with top earners paying 3 percent more. The irony is that the idiots who could have a much better deal at any point between 1-1-11 and 11-6-12 are Shocked! Shocked, I say! that Obama would insist on his way or the highway.

      1. There is some “idle fantasy” on the part of Obama in a few of his demands, such as insisting that the House relinquish its authority to approve debt ceiling increases. He’s also demanding more “stimulus” spending.

        Personally, I’ll be quite shocked if we don’t have an agreement in place by 1/15/2013. That said, I do think that the GOP could potentially gain by delaying further, as long as, after January 1st, they “cut taxes” for people earning less than $200K.

        1. If someone said cut spending (the sequester) and increase taxes sufficiently to balance the budget and start to pay down the debt….. (expiration of the Bush tax cuts PLUS expiration of the 2% tax FICA tax reduction)…

          isn’t that what people say needs to be done to get rid of our deficit and cut back spending?

          that’s a fiscal cliff? I’m not convinced that the hype lives up to the reality.

          If the GOP insists on not putting their own plan on the table – an alternative to Obama’s “plan”, what can we say?

          1. Todd Mason

            The uncertainty is whether the Rs answering the House roll call are still Shiites despite the election and numerous pleas from big bidness to get on with it, and “it” to include tax hikes. If Boehner can’t deliver, stocks and confidence take a hit in Jan, capital spending stays on the fence and the Rs take the blame.
            That said, ALL of the Bush tax cuts have to go at some point, and the cliff really isn’t a cliff if the IRS delays adjustments to withholding and Congress delays the cuts until later in the fiscal year, both of which are certain to happen.

          2. how about the 2% FICA tax reduction? Will that automatically go back up come January 1?

            Isn’t that ALSO a tax increase? So.. if they extend the tax cuts for the middle class but they do not extend the payroll tax reduction then the entire middle class will ALSO get a tax increase?

  2. re: “a good start”

    if you are still in LA LA Land even after the election.

    The GOP and their supporters are truly self-delusional.

    Come January 1 – the GOP will get a reality check.

    1. mesa econoguy


      Dude, seriously, do you write for the Onion? This has to be satire.

      1. Mesa – are you connected to reality dude?

        you’re living in a self-delusional world boy.

        1. mesa econoguy

          Oh, ok, sorry, forgot to turn off my moronometer.

          1. Ha! Ha! Ha!
            Very good mesa

            Some folks have an indescribable faith in the Kenyan Kommie Klown…

            They must admire the guy’s track record

            Dan Mitchell of the Cato Institute: Obama’s Fiscal Plan: Real Tax Hikes and Fake Spending Cuts

          2. well no.. Obama did not borrow the money… heck he did not even approve it but “facts” are not a problem for hacks like CNS and CATO.

            what’s truly pathetic is that the folks who don’t like Obama’s proposal won’t do a counter proposal and get this.. they want Obama do their counter proposal!

            Watch the GOP turn to crap in the next 30 days.

          3. larry g in a headlong rush to prove he’s untethered from reality rants: “well no.. Obama did not borrow the money… heck he did not even approve it but “facts” are not a problem for hacks like CNS and CATO“…

            Good one, the deseperation is showing…

            Here’s some more of that hateful reality for you larry g: BO/JCT CONFIRM THAT OBAMACARE IS A $1 TRILLION TAX HIKE

            BTW I would not be the least bit suprised if the RINOs caved…

          4. it’s a trillion dollars over 10 years or 100 billion a year vice the 16 trillion you attribute.

            but this is typical for your dishonesty, eh?

            but here.. here’s how we got to 16 trillion:



            re: RINOs caving

            I thought they already kicked all of them out?

            Are you say the Speaker of the House – Boehner is a RINO?

            see what we’re going to see – is finally the GOP will have to actually put something on the table besides the horse puckey they had been.

            and who knows..when they actually get the balls (with a little help) to say what they want they might actually get some of it.

            but so far they want Obama to specify the cuts the GOP would like.. totally bizarro

          5. larry g fighting the ever risiing tide of reality says: “it’s a trillion dollars over 10 years or 100 billion a year vice the 16 trillion you attribute.

            but this is typical for your dishonesty, eh?“…

            Nope wikipedia boy, the very fact that we’re even spending a dollar on that socialist nonsense over ten years is a dollar to much but apparently that thought keeps escaping you…

          6. here’s whats truly dishonest about what Juandos posts from his equally dishonest GOP hacks:

            the very first and most costly thing on the “tax increase” list is this:

            dditional 0.9 percent payroll tax on wages and self-employment income and new 3.8 percent tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles)/$250,000 (married) 210.2 317.7

            now do you actually KNOW what that is?

            try this:


            so this is an increase in the cost of Medicare – which Juandos and the GOPtards have been saying that the “parasites” should be paying.

            so they increase the costs of Medicare…and what do the GOPtards do?

            they claim it is a tax increase that contributes to the deficit and debt – rather than what it really is – to keep Medicare from going into deficit.

            this is the kind of skulduggery that Juandos (with the help of equally dishonest GOPers) engage in.

        2. mesa econoguy

          Seriously, which drugs, Larry?

          There’s no shame…

    2. No question that the tax obligations of the wealthiest 2% will rise next year. The GOP is indeed powerless to stop it. But they are not without leverage to influence the specifics as to how that increase in tax burden will be imposed.

      1. no doubt that payroll taxes will rise on all employed people next year also – where is the GOP hand wringing on that?

  3. Jon Murphy

    Everything else I can see, but I object to # 3, the phasing out of payroll tax for families. As a single guy, I am afraid that #3 would only be feasible with a subsequent rise in my payroll tax. This seems, with all due respect, to be a shadow tax on single people. Or I am just reading too much into it.

  4. mesa econoguy

    Agreed, Obama’s negotiation skills are highly underdeveloped.

    But, “As Tim Geithner likes to say, “Plan beats no plan.” “

    Um, que?

    No plan beats TurboTax Timmy every day, 24/7, 365.

  5. re: the payroll tax reduction and single people.

    not sure I follow.

    the payroll tax applies to all workers not just singles…

    and amazingly enough.. not a PEEP from the GOP on the payroll tax “increases” that will happen come January 1.

    1. Jon Murphy

      Well, I understand James Pethokoukis’ point to be that the payroll tax for people with families will be reduced (1/3 for each child).

      I fear that will lead an open door for higher payroll taxes on those without families, so that the revenue will not be “lost”.

      1. it’s a uniformly bad idea as long as the US and it’s people will not allow granny to die in a cardboard box.

        Social Security has worked well for 65 years not without some tweaks but by and large it is one of the very few expenditures that has stayed within it’s funding scheme.

        Singapore, a booming economic country has a payroll tax twice what ours is and as a result every person has not only a pension but health care and health care costs them 6% of their GDP while ours is almost 3 times higher.

        Every single OCED countries in the world and then a few more has payroll taxes and social security – mandatory individual mandates so that society later on does not have to pay taxes to help the destitute.

        More important in this discussion is Pethokoukis is suggesting this in the context of discussions over the fiscal cliff – which is about the wrong time as you can get to suggest radical changes.

        What we need to do now is make changes to the current system to avert a really bad downside and then agree in also to work to make more radical changes but no one in their right mind – not one elected official is going to essentially advocate getting rid of social security.

        And think about what Pethokoukis is really advocating here. Instead of getting spending under control he’s willing to cannibalize an earmarked tax, one of the very few that works by requiring expenditures not exceed revenues and convert it into yet another revenue stream to spend on DOD and National Defense.

  6. Max Planck

    This “plan” is a collection of one disastrous policy after another. A plutocrat’s wish list masquerading- and bacdly- as remedies.

  7. Israel P.

    What happened to extending Bush tax cuts indefinitely?

  8. The disregard of the US fiscal reality and the ignorance of the Republicans and Conservatives alike of how the present communist high-jacked Democrat Party operates is staggering.
    The US is NOT going “off the cliff.” STOP parroting.
    It went off the cliff with GW Bush.
    The US is “free sinking” in the Marianas Trench abyss.
    Unfortunately, those sellout politicians who could “unload” some of the “ballasts” are in bed with the marxists, for their own (and ours) peril.
    So, “force” your elected reps to live-by the Constitution they swore to uphold, shrink Gov and freeze hiring for 5 years, defund welfare & Obamascare & Dodd-Frank & Sarbanes-Oxley, drill-drill-drill for energy independence, lower the corp. tax rate to 10%, etc.
    Or else, we’ll soon “meet” Jules Verne.
    I’m sure you got my drift…

Comments are closed.

Sort By:

Refine Content:


Additional Keywords:

Refine Results

or to save searches.

Refine Content