The tax deal in one graph

Ezra,

Enjoyed your appearance again on Lawrence O'Donnell's panel last night. This one was better than the previous night.

Lawrence got a pretty shrill again, this time with Alan Grayson, again over the lower income tax bracket increasing tax brackets on the poor by 50%. (See my comment on this on your blog yesterday.)

I don't mean to beat on details, but we're giving O'Donnell a pass on essentially insisting that the Bush tax cuts helped the lower income groups even more than the rich, which is patently untrue. I wish you would point this out on your blog.

The truth is that the Bush tax cuts were heavily weighted to high income groups and a sunset would only marginally affect families earning $50K and under ($100-$400/yr year for a "theoretical" family of four).

Finally, while I believe Grayson sensationalized accelerated corporate tax break and you challenged him on it (correctly), he did make a valid point. $150 billion right now has a much greater value in the first year than spread over 20 years (if I understand this tax break). It has a much greater value to corporations (or why else would we do it) and therefore has a corresponding greater effect on the deficit.

Finally, why are analysts listing this part of the deal on the "Obama win" side of the equation. This is a corporate tax break and I don't recall Republicans generally opposing such. It a least should be listed in the "benefits all" category, but actually was a bonus for the GOP. That kind of deal is 'I'll give you some candy and in response to that, I'll give you some more candy.'

Again, all the best and keep writing.

The first footnote reveals that wonks, like pundits, have an odd conception of the 'middle class.' My friends in the middle class don't have $3.5 million estates (the 2009 exclusion level). Is the cost calculated relative to the 2001 estate tax ($675,000 exclusion)? If so, I think all of it should be credited to high earners. Does that change the results much?

Thew AMT also isn't a middle class issue. So this is basically propaganda.

Thew AMT also isn't a middle class issue. So this is basically propaganda.

Has anyone posted the estimated jobs created by each of these next to the money spent?

And also, who went to the mat for each one? (IE, a Democratic priority or a Republican one?)

It's very weird that I keep hearing reports about how the payroll tax "unexpectedly" came out of these discussions..but it didn't come from nowhere! Someone had to put it on the table! Someone had to fight for it! Someone had to trade something to get it in there! Who was it, and what did they have to agree to in order to get it in there?

Perhaps on those graphs you can annotate how many people are included in each pie slice or bar graph.

Those graphs are designed to hide the disparity in the amount of money going to high end earners as compared to the average person.

Also, how about a graph showing the number of tax brackets each earner is getting reductions in? For example, someone in the lowest bracket will receive benefits from ONE tax rate change, whereas someone making millions will benefit from MANY tax rate reductions in the various brackets.

This deal really sucks, though I understand it's the best we can hope for at this time to prevent 98% of Americans from suffering. If this deal doesn't make people understand just how the system is designed to redistribute money to the high end, nothing will.

"The cost of maintaining the estate tax at 2009 levels is included in the cost of the middle class tax cuts". This makes sense because ____??? Those are costs of tax cuts to the rich, they sure aren't for the middle class. And what about keeping capital gains and dividends taxes at giveaway-to-the-rich levels -- do they count that as part of the middle class tax cuts, rather than tax cuts for the rich? Maybe what they mean is "Democrats were going to settle for those tax cuts for the rich anyways", but in that case they should say "Democratic baseline", not "middle class tax cuts".

Put where the money goes to the quintiles plus the Top 1 Percent. The targeting is terrible. Middle class (as defined by less than 250K) includes a lot of above median incomes. The vast majority of this package goes to above median income recipients.

This is NOT the stimulus and JOBS program we have been looking for. Obama will have cashed in his best bargaining chip for what?

" If this deal doesn't make people understand just how the system is designed to redistribute money to the high end, nothing will."

has there ever been a place, or a system where things dont eventually get redistributed to the high end?
even in the most efficient systems?
it just seems to be one of the agreements in this world.

someone once told me this. and it is seems to be a truth....
"if all of the money was taken away from everyone, in a few years, all of the people who were rich, would find a way to get their money back again, and the people who were poor...would be poor once again."

I don't understand why the Federal Estate tax exclusions will now differentiate between single tax filers, i.e.,$3.5 million for a single tax filer and $7.0 million for joint filers. Can you shed any light on this?

If slavery looked good in a pie chart, would Klein be for it?

Oh, that's right, he is.

Klein believes everyone ought to be a slave to the state.

Except, of course, those whom Klein and his slavery promoting pals find useful in agitating for the policies that enable them to roll the slavery train along.

--*has there ever been a place, or a system where things dont eventually get redistributed to the high end?*--

Is there ever an end to people unable to look around themselves and see things uncolored by what others have lied to them about?

The average American is one of the wealthiest human beings ever to have lived. All the panting and fretting about growing gaps and inequities, etc., is complete and utter drivel.

"The average American is one of the wealthiest human beings ever to have lived. All the panting and fretting about growing gaps and inequities, etc., is complete and utter drivel."
msoja...

i am not an economist, but i dont think that fretting about inequities and people without opportunity for finding work, medical care, or inability to enroll in local community colleges, is drivel.
a healthy, employed and educated society is in all of our best interests.
i agree wholeheartedly, that the average american is extremely blessed.
when reading the "third world america" series recently, it upset me very much. having been to extremely poor countries, i think it is a terrible thing when a responsible journalist would use that kind of rhetoric, about the united states.
in the midst of this downturn, there has been much suffering, and that needs to be a concern to all of us.... but there are also people who have had to sacrifice some of the pleasantries they are used to, and think that makes them "poor."
people who are used to spending lavishly, are having a difficult time now, experiencing a deprivation. it is not a happy time for them. but maybe for them, it is necessary. i dont know, but it is something to think about, in our culture.
maybe it is a change for the better, in terms of appreciating other aspects of their lives, that seem to have fallen by the wayside.
(i am not talking about people who find themselves in a place of deep struggle and suffering, due to a terrible change in their circumstances, now.)

--*i am not an economist, but i dont think that fretting about inequities and people without opportunity for finding work, medical care, or inability to enroll in local community colleges, is drivel.*--

Of course you don't. You believe it's your business to mind everyone else's business. The sad thing is, all your meddling in other people's affairs (with the big government gun, mind you) is precisely what i contributing to the malaise that is of such concern to you.

"Of course you don't. You believe it's your business to mind everyone else's business. The sad thing is, all your meddling in other people's affairs (with the big government gun, mind you) is precisely what i contributing to the malaise that is of such concern to you."

well, if you believe that every person begins with the same advantages and abilities and gifts....and each person has the equal ability to secure a reasonable life for themselves, then i suppose you would not believe in the need for government, helping those who are suffering or in great need or difficulty.
i dont believe that all people are charitable to help on an individual basis, and care about the well being of their neighbors, and so that is why i am grateful to live in a country where the government protects the last, the least and the lost, instead of dragging down our whole society, by letting their suffering and misfortunes increase.
to my way of thinking, that is what would create terrible unrest and ill-will in our country.
maybe the role of government is not perfect...maybe things are not so balanced and under control as we would like them to be....but in this world, few things are.
i am very thankful for the work that president obama has done. i think he has threaded the needle as best as he can, so i am in a place of peace and acceptance with the conditions for change, and the change that is happening.
nothing is perfect. (except for the liquidamber tree out of my window.:-) by the way, have you looked out of your window lately at the wonders around you, msoja?)

Thanks Ezra for these graphs. These are useful and revealing.

I love charts! :)

So what does "middle class" mean here? The tax cuts in question apply to everyone who has income, not just the middle class.

In a nutshell, this bill would cost 13.5% or about $121 billion less without the tax cut extensions for the very wealthy. In return, we get about $780 billion in relatively good stuff. Fine, I guess, but wasting that $121 billion and running up the deficit even more is a bitter pill to swallow.

--*i am grateful to live in a country where the government protects the last, the least and the lost, instead of dragging down our whole society, by letting their suffering and misfortunes increase.*--

The thing you don't understand is that by giving endless handouts to people, the government is doing exactly that which you think would happen if people were forced to rely on their own initiative and private charity. Socialism drags everyone down. And it continues dragging everyone down until there is no further down to go.

You deride human nature in the area of charity, but how on earth do you think humans made it into the twentieth century without the socialism that you think so essential now? Has it ever occurred to you that the creeping socialism of the last century might be the very thing that has fostered and fed the ugliness that you, born late and not understanding much, unwittingly think requires more government coercion? I think attitudes would improve mightily if a sizeable portion of the population didn't have the attitude that the other portion owed it a living, with all the trimmings. Do you really think the socialists are brewing a *healthy* civilization? People are getting sick of having the results of their hard work confiscated by wasteful, incompetent, self-serving politicians. Do you care about that? Do you not see the potential for huge trouble down the road? And that's okay, because you'll feel better about having tried?

--*i am grateful to live in a country where the government protects the last, the least and the lost*--

There were undoubtedly many who expressed the same or similar sentiments back during what's now referred to as the Dark Ages, when regional rulers offered protection in exchange for subservience.

But then came the enlightenment, and people aspired to something more. They thought to govern themselves, as sovereign individuals, bowing to no one, and asking none to bow in their own stead. That was the spark that began the United States, which grew to become the greatest nation on the planet, and now, you and the Kleins of the country, would like to return us to some modernized version of feudalism, where the overlord allows you to live just close enough to the castle walls that you may make it inside at dangers approach, if he's in a good mood, and all.

Unearned income such as inheritance income should be taxed using the same progressive tax tables as salaries and wages. None of that type of income should be exempt from taxation.