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The deficit commission verdict is in

idlewindBeach Fanatic
848 views
The Obama Deficit Commission verdict is in:

U.S. Debt Proposal Would Cut Social Security, Taxes, Medicare - Bloomberg

As I read this I am pleasantly suprised. While it does not go far enough, it is certainly a good first step towards fixing our finances. I hope the President will support it and Congress will pass it. There is pain in this proposal for everyone which is the way it should be. All of us contributed to the mess, we should contribute to the cure.

Replies

17
beachFoolBeach Fanatic
#2
The Obama Deficit Commission verdict is in:

U.S. Debt Proposal Would Cut Social Security, Taxes, Medicare - Bloomberg

As I read this I am pleasantly suprised. While it does not go far enough, it is certainly a good first step towards fixing our finances. I hope the President will support it and Congress will pass it. There is pain in this proposal for everyone which is the way it should be. All of us contributed to the mess, we should contribute to the cure.

Yes the home interest deduction is wiped out, BUT YOUR TAX RATE IS LOWER.

Plus any proposal neither Grover Norquist nor Nancy Pelosi approves warrants a second opinion.

Fiscal responsibility means some programs you support get cut.

It's not personal, just math.
futurebeachbum avatar
futurebeachbumBeach Fanatic
#3
Yes the home interest deduction is wiped out, BUT YOUR TAX RATE IS LOWER.

It will be interesting calculus to see how they balance out.

from the article:

Under one option, income-tax rates would be reduced to three levels: 8 percent, 14 percent and 23 percent. Now there are six tax levels ranging from 10 percent to 35 percent. The corporate income-tax rate would be cut to 26 percent from 35 percent.

Tax cuts this significant might be enough for most families to offset the loss of the bulk of the deduction(s). It would be interesting to see how a 2-income family making $150k gross with a $2k/month mortgage or a single income family at $80k with $1k/month mortgage fared. Without seeing some real cases modeled, its just a vague concept.

The plan includes two less sweeping alternatives to ending all tax breaks, including one in which a pared back mortgage tax deduction would be retained. Under that proposal, homeowners could not take the break for second homes, mortgages worth more than $500,000 or home equity loans.

I doubt this one would fly. We won't let people in starter homes in San Francisco or Boston deduct any of their interest?

This bolded part below is interesting.
Wiping out all tax breaks, including the home mortgage- interest deduction, while lowering rates would cost taxpayers $100 billion a year. Members of the panel could decide to keep some of the breaks by offering offsetting cuts, Bowles said.

Looks like there is some head room in there to keep the big business/big labor shareholders in our politicians happy.

It will be interesting to see what impact the loss of a mortgage deduction will have on the nearly comatose building industry. I would expect that loss to increase the amount of vacant/bank owned space initially and increase the percentage of the population that rents. That should lower the demand for new home construction and the value of existing homes significantly. OTOH, when Carter eliminated the deduction for consumer interest, it didn't have much effect on people's credit card usage so its hard to tell.

I am also surprised that the panel didn't also recommend cutting out charitable contributions and elimination of tax related deductions (ie: state/city income taxes, property taxes, tax prep fees, etc..) Those would seem like pretty straightforward things to eliminate.
30ashopper avatar
30ashopperSoWal Insider
#4
The Obama Deficit Commission verdict is in:

U.S. Debt Proposal Would Cut Social Security, Taxes, Medicare - Bloomberg

As I read this I am pleasantly suprised. While it does not go far enough, it is certainly a good first step towards fixing our finances. I hope the President will support it and Congress will pass it. There is pain in this proposal for everyone which is the way it should be. All of us contributed to the mess, we should contribute to the cure.

Note this is just a proposal by the two people overseeing the commission. The final plan from the whole commission won't be released until December.
Matt J avatar
Matt JSWGB
#5
Based on the number of people who aren't paying their mortgages would this actually have an impact?
futurebeachbum avatar
futurebeachbumBeach Fanatic
#6
President says stop shooting it down and listen

I think that the President's comments on the proposals:

"Before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts," Obama told reporters

are the most intelligent I've heard. All sides need to calm down and wait for a complete proposal. Then everyone needs to be prepared to compromise to get it done.
idlewindBeach FanaticAuthor
#7
Another article on the subject

NYT: Debt plan scorn shows fissures in both parties - Politics - The New York Times - msnbc.com

I am one Tea Party member who will agree to some tax increases as part of a package that addresses Medicare, Social Security, reductions in spending and an end to earmarks. Everyone needs to be realistic about the challenges and the imperative to reduce the national debt.
30ashopper avatar
30ashopperSoWal Insider
#8
NYT: Debt plan scorn shows fissures in both parties - Politics - The New York Times - msnbc.com

I am one Tea Party member who will agree to some tax increases as part of a package that addresses Medicare, Social Security, reductions in spending and an end to earmarks. Everyone needs to be realistic about the challenges and the imperative to reduce the national debt.

The way the pundits are handling this is soo frunstrating. I was watching CNN the other day, they trotted out a far lefty and a far righty, one was against "massive entitlement cuts" and the other was against "massive tax increases" in the proposal. I was wondering who do these two people think they actually represent?

I blame the news networks. They don't want to invite reasonable moderates because "Yeah, this seems pretty reasonable. Lets do it." is boring television. So they find the polar extremes, and they present them as if they represent larger groups.

The rest of us, we're kinda boring, and pretty reasonable, and we're for this kind of reform. But you wouldn't know we exist by watching CNN.
beachFoolBeach Fanatic
#9
The way the pundits are handling this is soo frunstrating. I was watching CNN the other day, they trotted out a far lefty and a far righty, one was against "massive entitlement cuts" and the other was against "massive tax increases" in the proposal. I was wondering who do these two people think they actually represent?

I blame the news networks. They don't want to invite reasonable moderates because "Yeah, this seems pretty reasonable. Lets do it." is boring television. So they find the polar extremes, and they present them as if they represent larger groups.

The rest of us, we're kinda boring, and pretty reasonable, and we're for this kind of reform. But you wouldn't know we exist by watching CNN.[/QUOTE]

You should have watched Rachel Maddow's hour-long interview with Jon Stewart last night.

Stewart argued your point.


The interview is posted on her web site-I think it is rachelmaddow.com.

You can delete her web site from your browsing history.:lolabove::lolabove::lolabove:
Lynnie avatar
LynnieSoWal Insider
#11
I hope the tax cut is large enough to offset my mortgage interest deduction.......probably not. So, are we expiring or extending Bush Era tax cuts? Could be a wash, perhaps? I would have to see the actual proposal and numbers before agreeing with "Mathematically it apparently works." There is a lot in this article and the only thing I agree with right now is Obama's statement that we need to listen and truly consider our choices.
30ashopper avatar
30ashopperSoWal Insider
#12
The way the pundits are handling this is soo frunstrating. I was watching CNN the other day, they trotted out a far lefty and a far righty, one was against "massive entitlement cuts" and the other was against "massive tax increases" in the proposal. I was wondering who do these two people think they actually represent?

I blame the news networks. They don't want to invite reasonable moderates because "Yeah, this seems pretty reasonable. Lets do it." is boring television. So they find the polar extremes, and they present them as if they represent larger groups.

The rest of us, we're kinda boring, and pretty reasonable, and we're for this kind of reform. But you wouldn't know we exist by watching CNN.[/QUOTE]

You should have watched Rachel Maddow's hour-long interview with Jon Stewart last night.

Stewart argued your point.


The interview is posted on her web site-I think it is rachelmaddow.com.

You can delete her web site from your browsing history.:lolabove::lolabove::lolabove:

I'll just pop into private browsing mode so there's no chance anyone will ever know. 😀
beachFoolBeach Fanatic
#13
Don't miss it.

I just want to keep you out of trouble with your peeps.
idlewindBeach FanaticAuthor
#14
Don't miss it.

I just want to keep you out of trouble with your peeps.


I don't know about 30Ashopper, but I am not afraid of my peeps knowing I went there. In fact I look at their stuff all the time. You have to know what the other side is thinking.😀 Life is easy when your heart is pure.:lol::lol::lol:
Lynnie avatar
LynnieSoWal Insider
#15
This change in mortgage interest deduction and proposed changes in the tax code is interesting. Could this be a shift toward the flat tax? 'Mathematically, it works apparently.' 😀
beachFoolBeach Fanatic
#16
I don't know about 30Ashopper, but I am not afraid of my peeps knowing I went there. In fact I look at their stuff all the time. You have to know what the other side is thinking.😀 Life is easy when your heart is pure.:lol::lol::lol:

You must not have watched the interview.

Stewart challenges the news industry because everything is not my side/your side.

He has a point.

How would today's media cover the moon landing?

Of course, they would give equal coverage to the kook who thought the landing was a hoax.:idontno:
futurebeachbum avatar
futurebeachbumBeach Fanatic
#17
I hope the tax cut is large enough to offset my mortgage interest deduction.......probably not. So, are we expiring or extending Bush Era tax cuts? Could be a wash, perhaps? I would have to see the actual proposal and numbers before agreeing with "Mathematically it apparently works." There is a lot in this article and the only thing I agree with right now is Obama's statement that we need to listen and truly consider our choices.

Its pretty safe to assume that the cuts won't be enough. You will probably pay more taxes.

That's part of the plan.

Even with massive spending cuts (which we desperately need) we have a huge existing debt to pay down. If we don't bite the bullet and suffer a little discomfort now (ie: slightly higher taxes) the economic situation is going to be unbearable for our grandchildren.

We just need to figure out a way for higher tax revenues to not cripple the job producing sector of business (small to mid-sized businesses.)
Lynnie avatar
LynnieSoWal Insider
#18
Its pretty safe to assume that the cuts won't be enough. You will probably pay more taxes.

That's part of the plan.

Even with massive spending cuts (which we desperately need) we have a huge existing debt to pay down. If we don't bite the bullet and suffer a little discomfort now (ie: slightly higher taxes) the economic situation is going to be unbearable for our grandchildren.

We just need to figure out a way for higher tax revenues to not cripple the job producing sector of business (small to mid-sized businesses.)

This is critical, in my opinion. ;-)

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