Home > Politics > President Obama Makes a Bad Deal

President Obama Makes a Bad Deal

President Obama defends his compromise on tax cuts. Photo: The New York Times.

A lot of people are angry at President Obama for giving in to Republican blackmail on tax cuts.

The tax cut bill passed by the Democratic majority in the U.S. House of Representatives would have given a tax cut to everyone on the first $250,000 of income. But that wasn’t good enough for Senate Republicans, who vowed to block all legislation until they got extra tax cuts for their friends making over $250,000 a year.

Under the Democratic tax cut bills, people making $20,000 a year would get a tax cut on all of it. So would people making $200,000 a year. So would families making $250,000 a year. They’d get a tax cut on all their income. All of it.

People making billions of dollars a year would get a tax cut on their first $250,000 of income. All of it. But they wouldn’t get a tax cut on on income over that amount.

Of course, people who make that much money pay lower taxes anyway because a lot of their income is taxed as capital gains at a rate of 10 to 15 percent. So hedge fund managers who make a billion dollars a year pay lower tax rates than their assistants who make only $30,000 a year. Somehow, Republicans think that’s just wonderful and totally fair.

I don’t know if I’m angry at President Obama. If that really was the best deal he could make for the American people, then okay. Even he said that he didn’t like parts of the deal.

What bothers me is that I don’t think it was the best deal that the president could make for the American people.

A majority of Americans in both major parties supported a tax cut on the first $250,000 of income and not over that amount. Corporate profits are through the roof. Wall Street never had it so good.

So we’re supposed to believe that with wars and unemployment and crumbling infrastructure and deficits as far as the eye can see, Wall Street needs another tax cut? And that Republicans were justified to block unemployment benefits, middle class tax cuts, and nuclear missile treaties just to help their friends on Wall Street?

President Obama got the best deal he could get without having to fight very hard for it. That’s what disappoints me. He wouldn’t fight. We need a president who will fight for us.

Yes, you can say it’s easy for me to support tax increases because I’m a student and won’t have to pay them. But my family would have a tax increase. Even my Dad, who’s a Republican, supports extending tax cuts only up to $250,000. He knows what’s good for this country. It’s not a matter of how much money you make or which political party you support. It’s a matter of what’s right.

But instead of what’s right, we got “the best deal that President Obama could get.”

Copyright 2010 by Rinth de Shadley.

  1. David
    December 7, 2010 at 11:41 am

    The problem is not with the amount of money the Government gets, Rinth. That number is over $2.5 trillion now. The problem is how they spend it.

    If they could enforce the code they have, and stop people from scamming the government, or at least prosecuting those that get caught, there would not be a problem, at least not as much of one. By the way, Bush era Republicans are just as guilty as Democrats.

    Regarding who gets taxed,someone who earns $20,000 gets taxed at a rate of less than 4%, so would pay $800 on their income. Someone who makes $250,000 gets taxed at a rate of 25%, paying 62,000 of that money in taxes. Most of those in this bracket, at the lower end, are small business employers, who could use that $62,000 to invest in hiring two or three people for that 62,000. Now, double that for someone making $500,000. Taxes paid of 135,000. I think this is fair enough. Those who make little pay little, those who make more, pay more.

    By the way, did you realize that those making over $250,000 pay about 70% of the tax revenue in this country? And I would say that, if the government finds itself running out of money, they should probably jettison the health care proposal, now law, that’s going to completely drain us of our collective wealth. Frankly, I’m considering moving out of the country. Where? Don’t know, but if things get much worse, I may need to.

  2. December 7, 2010 at 8:06 pm

    Hi David 🙂

    Thanks for the informative comment! It sounds like we mostly agree, if I understood your point about people paying more when they get more. I had not heard that 70 percent figure, and it does surprise me a little.

    I know we disagree about the health care law, and we both have good reasons for thinking the way we do.

    To me, the most important thing is having a compassionate society with a safety net and without so much inequality that very wealthy people almost live on a different planet from everyone else. I don’t think that very wealthy people are bad (I know a few of them), but for all of us to belong to the same society, we have to feel closer than we do and share some experiences. If inequality gets too high, then it can’t happen.

    • David
      December 8, 2010 at 11:28 am

      Another point of the safety net…if the government provides the safety net, the people who pay into the system get lazy. I think people should recognize a problem, then do something themselves to solve it. The other day on the way into the grocery we saw a homeless man, and it was a cold rainy day here in California. We went in and bought our groceries, and bought a ready-cooked fried chicken dinner for him. We feel more people should do things like that, rather than saying to themselves “The government can take care of him.”
      The whole hospital system was instituted by the Catholic Church for the purpose of giving comfort and dignity to those who were sick. Throughout history, it’s individuals stepping up, recognizing a need, and filling it, that created some of our great institutions. The current school system was instituted by De La Salle who formed the Christian Brothers. Before that, children were all lumped into a schoolroom and taught the same things.

      God bless, Rinth, and happy Advent…

      • December 8, 2010 at 9:46 pm

        Hi David 🙂

        Happy Advent to you too!

        You’ve given me a lot to think about — especially with final exams coming up in the next couple of weeks. May I share just a couple of thoughts and postpone a better reply until later?

        I think you’re right that individual charity is better than welfare IF people do it. But a lot of people don’t. I’d want to see programs that make sure needy people aren’t forgotten. I know that the church does a lot, and I’m very glad it does. But by itself, it’s not enough.

        Of course I know that you don’t want people to go without medical care they need. That has never been the issue. The question is, what’s the best way to make sure people get the care they need?

        Maybe there’s an analogy with roads. We could have a system where individual people or companies built roads instead of the government doing it. Some roads would definitely get built. But would they serve the greatest number of people in the best way? Just because the government does things imperfectly doesn’t mean that any other way wouldn’t also be imperfect, and it might be worse.

      • David
        December 9, 2010 at 9:57 am

        Aw, I don’t want to muddy your brain for finals, so I’ll leave you with this.

        I agree about your “if”. Part of this is the general departure from faith in God, and adherance to the life of Jesus. I understand that we have to provide a safety net for those who cannot provide for themselves, but when you compare ‘poor’ in this country with ‘poor’ elsewhere, you wonder…I met a priest a couple weeks ago. He’s from Colombia, but is a missionary in Uganda. Where he works, there’s no electricity or running water. He’s raising money for an ambulance. I’m not saying our poor should be relegated to that, but many poor here own a car, a HD television, Nintendo, in general have more luxury than they need. In fact, a friend of mine who got laid off 18 months ago, I went to visit him. He’s on unemployment, his wife is double-jobbing as a nurse, he’s not paying his mortgage or credit cards, and yet he went out and bought an LED TV. I had to stop feeling sorry for him…then another, I found out yesterday, received unemployment benefits for 18 months while he was spending his time traipsing around Europe. I really just hate all the waste. I want our poor to really be in need (that’s not what I’m really trying to say, so I hope you get my meaning). I want to help those who really can’t help themselves, not those who are going to abuse it.
        Roads are a sore subject with me, because there’s so many potholes in the freeways right now, I’m not sure the government is serving the best interest of the people either. And Fedex and UPS do better jobs at delivering mail than USPS…Ah, well, I guess it doesn’t just rain in the reservoir, now, does it?

        God bless!

  3. David
    December 8, 2010 at 11:18 am

    Just to add a little more fodder for thought, what are the percentages of people earning more than x dollars? If you make $65,000 a year, you’re in the top third of the wage earners in the country. $80,000 puts you in the top 25%. $100,000 puts you in the top 15%, $200,000 in the top 3%. I confess, I exaggerated a bit. The top 10% of salary-earners pay 68% of the income taxes in this country. Not talking about Medicare or SSI. In those arenas, if you’re above a certain amount, you don’t pay any more. Actually, you pay until you’ve earned a certain amount, then you stop paying.
    Regarding health care, I’m not against health care coverage for all. I’m against the government takeover of it, because I don’t think government does very many things well. I don’t want children or poor mothers dying because they can’t see a doctor. I’m against this health care bill because it allows abortion to be funded, and because there’s too much room for fraud.
    I agree absolutely about compassion. Jesus wants that from us. I don’t have any envy of rich people. Most are very generous with their money, and have been forever. Of course, there are bad ones, and they will receive their reward. One thing I do know-I am in the top 10% of salary earners in this country (it fluctuates between 15th and 10th percentile because of overtime), and I will never create a job for someone else. People who make money by being small business owners and corporate CEOs create jobs. If they would make a decision based on taxes to hire people or not hire people, then I say give them the incentive. Maybe an incentive after they hire someone would be better than just giving them the money up front.
    Another thing to remember, compassion comes from within, it cannot be legislated. If people had more, they’d give more. In fact, we’re supposed to, by Mosaic law, give 10% off the top, but because the government takes 25% of my salary for taxes, I cannot give that much, because my family would suffer. I try and make up the difference in volunteer work, but that’s hard, too. We can’t demand compassion from people, neither can we demand that they love each other. We can only pray that people will stop being selfish, remembering that Christ told us that those who have will have more demanded of them, and those with less will have less demanded, but that we must always care for each other.

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