Follow Barack Obama prior and during his tenure as the 44th President of the United States. Read about my personal observations along with every day facts as they happen. This blog will only submit factual information about the first black President, now in his 2nd term of office.


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Obama bows to Republicans and supports the 'BUSH-Era" Tax Cuts

Tuesday, December 7, 2010

Everyone knew it was coming, as President Obama as agreed with Republicans to extend every Bush-era tax cut today. This agreement effects the rich, the middle class and the poor. It is no secret that President Bush has resented tax relief for the rich, but in order to save the middle and lower income tax groups, he had to compromise with the Republicans. So in a sense, the Republicans have won. What actually happened is that the Republicans looked out for the rich, and the President looked out for the middle and poor class Americans. It is important to note that this fight to tax the rich will be an ongoing debate from now and into the future.
Is there one person on earth that actually thought that the President would not extend the tax cuts? There were rumors that the President would veto any extention of the tax cuts by Congress. Only if you are a mole living in a hole would you ever think that the President would ever abandon the middle class and the poor.
Instead, unemployment benefits will be available for the unemployed for at least the next year or so and the rich will enjoy paying less taxes than the President would like them too.
This time, the President shows his deep concern for the less than fortunate in this country, and has sided with the Republicans on the tax deal so that low income people would not have to suffer as much. The Democrats however are disheartened over the fact that the President "caved in" to Republican politics. Many would think this is true, but the "number one priority is to do what's right for the American people" and "Because of this agreement, middle class Americans won't see their taxes go up on January 1" as he stated in a scheduled news conference at the White House.
President Obama admitted that he has not been able to budge the Republicans in the Senate. The President scolded the Republicans as he stated that extending tax cuts for the wealthy is the "holy grail" for Republicans. He pointed out that extending tax cuts "seems to be their central economic doctrine," knowning full well now that they have control in the Senate, that they could use a filibuster card if the President doesn't agree.
Payroll taxes will go down for at least one year from 6.2% to 4.2%, and it is applied to the first $106,800 of wages. A $50,000 wage earner would see a decrease in payroll taxes of at least $1,000 and likewise, someone earning $100,000 would save at least $2,000. It means that the rich will be richer, and the poorer will no be poorer. So everyone stands to gain here, but really, is it truly the right thing to do. It means that the more you earn the less in actual taxes verses income you would have to pay. This theory definitely would encourage someone to make better for himself and try to earn more money. But there are allot of people out there that are unemployed and cannot earn allot of money. Some people make just enough to put food on their tables.
Likewise and Estate tax will return in January with a rate of 35% verses 55% as it was scheduled to be in the Bush-Era tax cuts would no longer be in effect. Included in the plan would be continued tax breaks for studens and families contain in the stimulas bill of 2009 and businesses can write off any investment that they would make in 2011.
As expected, the Republicans like the deal, but Democrats do not like it. One reason the Democrats are against the deal is because tax cuts are extended to the rich. That is the same reason why the Republicans like it.
What has happened here is the preface of the actings of the future Congress, now that the Republican majority Senate will take effect in two months. President Obama will now have an uphill fight to protect his beliefs and his desires for policy creation. But the Republicans should also realize that because they won this battle regarding the renewal of the BushEra tax cuts, they will have a harder time in the future to go against Obama's desires. I would expect that the Republicans will see the Presidential veto thrown at them a few times in the near future. It is a battle between the liberals and the conservatives. Hopefully, the fighting within Congress will subside long enough during policy debates to actually get some policies passed. If not, everyone has everything to loose here. The politicians in Washington are there so that they can promote new policies, but so far it looks as if there will be little chance that both the Republican House and the Democratic Senate will ever get along on anything.


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