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  • Morning Bell: The Jobs at Stake in the Tax Cut Fight

    Last Friday the Labor Department reported that private sector employers added an anemic 50,000 net jobs to the U.S. economy in November. That is far fewer than what is needed to absorb discouraged workers reentering the workforce or population growth. As a result, unemployment rose to 9.8 percent, marking the 19th consecutive month that our nation’s unemployment rate topped 9 percent, a post–World War II record.

    Faced with this record breaking unemployment, what did the leftist Senate majority do the very next day? They voted to raise taxes, of course. Fortunately, a bipartisan coalition of Republican and Democratic Senators defeated the Obama tax hikes, setting the stage for an all-or-nothing tax showdown this week.

    With unemployment at 9.8 percent and President Barack Obama 7.3 million jobs short of where he promised the economy would be by December 2010, just how many jobs are at stake in this week’s negotiations? The Heritage Foundation’s Center for Data Analysis crunched the numbers on various possible tax proposals and estimates that:

    • Permanently extending current tax rates would cause no further job losses in 2011 or over the next 10 years;
    • Raising taxes on just those making more than $1 million would cause 78,000 lost jobs in 2011 and 198,000 lost jobs by 2020;
    • Raising taxes on individuals making more than $200,000 and families making more than $250,000 would cause 238,000 jobs lost in 2011 and 693,000 jobs lost by 2020;
    • Extending current tax rates for just two years would cause 949,000 job losses by 2020;
    • Extending current tax rates for just one year would cause 1,056,000 job losses by 2020; and
    • Allowing all the tax hikes would cause 550,000 job losses this year and 1,205,000 job losses by 2020.

    And these CDA numbers do not even capture the uncertainty caused by Congress’s failure to set tax rates in a responsible time frame. Jeffrey Lacker, president of the Richmond Federal Reserve, said in an October speech that with “the continuing uncertainty about tax rates for 2011 (now less than three months away), business planners may be finding it more difficult than usual to project economic conditions or the financial implications of prospective hiring and investment commitments. While it is hard to estimate the magnitude of the effects of these fears, or to disentangle them from general expectations of weak demand growth, they are too broad and deep for me to dismiss as implausible the notion that they have significantly dampened consumer and business spending of late.”

    The American people know that unemployment at 9.8 percent is no time to raise taxes on anyone. Last month only 31 percent of Americans told Gallup that raising taxes on the wealthy was the best approach for dealing with the U.S. economy. By contrast, 62 percent chose either reducing the deficit (39 percent) or cutting taxes (23 percent) as the best approach. And this week, by a 59 percent to 30 percent margin, Americans tell the Associated Press and CNBC that Congress should cut federal spending rather than raise taxes.

    The left got shellacked at the polls last moth for a reason: The American people have fundamentally rejected their agenda. But they are completely undeterred. Whether it is taxes, spending, amnesty, New START, energy—the issue doesn’t matter. The leftist majorities in Congress know they have just weeks left in power. They already lost the election. Therefore they have no reason not to force as much of their agenda through as possible, no matter how unpopular it is. Conservatives in Congress should do everything in their power to stop this leftist legislative onslaught until a more representative Congress is sworn in next month.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    31 Responses to Morning Bell: The Jobs at Stake in the Tax Cut Fight

    1. Ken Jarvis - Las Veg says:

      Future Headline in – YOUR paper.

      Current Tax rates – are extended,

      Unemployed benefits – are extended.

      Murdoch has approved BOTH.

      See the Front page of today's WSJ.

      The WSJ and Fox News are the Voice of the GOP

      and they give – GOP marching Orders there.

    2. Dennis Georgia says:

      The liberals have no intention of cutting the spending, unless it is for national security. The entitlement programs they have instituted are what is keeping them in power and controll. The deficit they have gotten us into will be the end of America if we are not careful, at this time I do not think rasing taxes is the answer, we need jobs to raise money to pay the debt. Jobs can only be created when business feel secure, that is not how they feel at this time.

    3. Lee-White Tanks AZ says:

      If I am reading this correctly there are no jobs gained if the current tax rates are kept. What happened!

      I have heard or read little else than that the biggest problem for small business (and large business for that matter) is the climate of uncertainty due to lack of a reasonable tax package that allows for planning and expansion. "The Package" consists of leaving the current taxes rates in place permanently.

      You say if Congress acts and passes the "retention" version there will be no job losses in the near term.

      Again, What Happened!!!! to the rosy picture of recovery that was being painted??

    4. WHICH WAY says:


    5. Ken Jarvis - Las Veg says:

      GOP Marching Orders – from Murdoch's WSJ

      Criticize US – SKorea Trade deal.

      Let the Ethanol 45 cent a gallon Subsidy expire.

      Repeal inheritance tax, and call it – Death Tax.

    6. toledofan says:

      Cutting spending is a political ruse; it's obvious that the Democrats don't care if unemployment hits 15%, their main solution is to keep extending the unemploymnets benefits. What is really sad in all of this is simply that these people, mainly the Democrats, so far, are ruining the country and have no clue of what they should do to fix it or to right the ship. These guys are all academians with little real worlld experience, except for politics, and it's obvious to me that they believe they are the ones who have the answers. Just step back and look at the past two years and ask yourself why are we still trying to do the things that don't work, how much more evidence do we need yet the administration just keeps chugging along.


      For the life of me i don't get why people won't understand raising taxes will make people close their business doors and stop even more people from holding jobs. the people who have money are the ones creating jobs, not the ones without money. keeping business doors open feeds the economy in every way, ss taxes get paid into, grocery stores get business, banks get mortgage payments, car companies make money and all these businesses keep the employees they have. how in the world can forcing businesses out help the economy? why can't the left see how this works? lets face it when 300 people work and 400 people take from the system, something has to give. it does not have to be this way. anyone who wants to make money, can..just find a need and fill it for a fee. don't take it from those who already figured it out.

    8. Evan, Anchorage says:

      Our congress's new way to fix things. You can spend money that we don't have on unemployment benfits if we can spend money that we don't have on tax cuts!

      It is suppose to be—we will cut spending or raise taxes here if you will cut spending there or raise taxes there.

    9. Elan Rubinstein, Oak says:

      Your article does not explain why those earning over $250,000/year require a lower tax, given minimal impact on employment per the CBO, given that their current tax rate is low by historic standards, and in light of the deep deficit. Several wealthy individuals – such as Warren Buffet – have come down on the side of increasing tax rate on the wealthy. Laffer Curve trickle down didn't work under Reagan: There is no reason to think it will work now. Reagan also increased taxes, now anathema to Republicans who revere him.

    10. Arlene Haynes says:

      I just looked on your home page and cannot find where to renew my membership with you. Please advise.

      Thank you for your outstanding protection for the US citizens

    11. Eric Rogers, Chattan says:

      Looks like the data / estimates provided by the Heritage Foundation are contradictory. Job losses increase if current rates ended and taxes are raised. Job losses increase even more if current rates are extended.

      Am I missing something ?

      • Conn Carroll Conn Carroll says:

        Apparently I did not communicate this well. Permanently extending current tax rates would cause no further job losses in 2011 or over the next 10 years. That is ideal.
        Allowing all the tax hikes would cause 550,000 job losses this year and 1,205,000 job losses by 2020. That would be disastrous.
        Then in between, depending on who you tax and for how long you get different job losses estimates for 2011 and through 2020.
        Is this clear?

    12. Dave Provo, UT says:

      I've talked to at least a dozen small business owners who make between 250,000 and 1.5 million. They tell me that if the tax cuts are just for a year or two they will not invest much in expansion or new employees, they need it to be permanent to better plan for the future. In addition they are deeply worried about the effects of the Obama health care costs so they plan to make most of their new hires less than 40 hours/week. They can't lobby like the unions or big companies to get exemptions. Is any body in this admisnistration really listening?

    13. KC - New Mexico says:

      It is time for the politicians on all sides to wake up and understand that the current tax process does not work and that it is broken. It is time to extend the current tax cuts to maintain and grow the economy. But it is also time for Washington to propose significant change to the tax process. I strongly suggest a flat tax on every individual who has income. The poor will pay right along with the middle and the top. There are no deductions, no exceptions for business, non-profit, or religious organizations. The tax is based on pure income from employment, interest, and investments. This simple approach will also cost some IRS jobs – so what!!!

    14. Holger Finley, Roy, says:

      I don't believe any one can put a number on job losses or gains in the future, a wild guess at best. The tax structure and Unions in the past is what has got us in economic trouble in the past. How many businesses have gone out of the country because of it, I doubt we can count them all. It is a no brainer, lower taxes Uncle Sam and get the hell out of the way. Our Government is like a man having 6 wives and they are all spending the same money, try to balance that check book if you will.

      This country started out with Statesman that cared about all of us, long term. Politicians, it seems care only about lineing their own pockets. Open your eyes folks in Washington, Socialism does not work, in fact it is the Devil's plan to enslave us all.

    15. Leon Lundquist, Dura says:

      The Debt Crisis is a Crisis because Progressives put in Base Numbers that are crazy wrong! They presume future American Governments (State and Local, too) will also be crazy! They presume Medical prices will stay crazy!

      The American Public would be better served if they deregulated Medicine altogether. Same with Energy, Agriculture, and Transportation. All the parts of the HEART part need immediate relief! Pull the plug on Obama! That is what the House was designed to do in this historical circumstance! Stop the slaughter! They're going after Americans!

      Demolition Plutocrats are running Government like bad teenagers breaking all the rules, the House turns off the utilities and puts a notice on the door "Get out!" Non payment of rent "You do not Represent!" Now don't you suppose really bad teenagers, they are kicking in the walls! "Progressives are grinding down the Constitution as effective Law" They have installed Unlawful Government! Lame Duck proves that Obama plans to 'govern' from his Agencies.

      "Call the cops on bad teenagers trashing the place and not paying the rent" (Representation.) Send in a Division (10,000) House Investigators into the Administration, there is a Conspiracy against Constitutional Law. If you think the DINOs write Unconstitutional Bills? Just look at all their Unconstitutional Policies! Pick up their victim list. You will find real Damages and real People. DINOs have practiced Class Warfare for a hundred years! There are millions of American victims! Many of us are third generation victims of Progressive Socialism from Wilson to Obama!

    16. Blair Franconia, NH says:

      The Bush tax cuts should be kept because they were good for the economy. Contrary to what the Democrats claimed, and continue to claim since 2008, that the Bush tax cuts were bad for economy because they were "tax cuts for wealthy." Who do they think creates the majority of the jobs in this country? The government? They must. Abraham Lincoln said "You can't help the wage earner by bringing down the wage payer." He was right 150 years ago and he's right today. The fact is that it's people like Donald Trump and Bill Gates create the jobs. Not the federal government. It's time we stopped comparing apples and oranges and started comparing apples and apples. We're heading in the same direction with our debt and deficit as the PIGS. (Portugal, Ireland, Greece, and Spain). Greece melted down last summer and had to get a bailout from the European Union and the IMF. Then Ireland melted down. The Irish government just called for new elections for next year. Tax cuts for unemployment benefits? That's blackmail. No

      unemployment extension. It just discourages work. People who have extended benefits pretend to search for work because that's one of the conditions of unemployment benefits. Then when the unemployment office calls and says: "John

      Smith is hiring at$10 an hour. When can you start?" Instead of saying "Tomorrow,"

      you say the following: "I can't. It doesn't pay enough." That's why we don't need to extend unemployment benefits. Denmark had up to four years of unemployment benefits and had to cut them back to encourage people to find work. We should cut back on unemployment benefits and then the long-term unemployed would be able

      to find work.

    17. ArnieJr, WV says:

      HELLOOOOOO! Can anyone say "FLAT TAX"?

    18. JG Hurd Walnut Creek says:

      Having trouble reconciling paragraph # 1 with paragraphs 4&5 in your aanalysis. They seem in conflict.

    19. Catherine West, San says:

      Yes! COMPLETELY, 100% UNDETERRED; But Not For Any Published in any location, including Fox News!

      BECAUSE OF THE PROMISED MONEY TO START-UP: —"Patient Protection and Affordable Act with Usurped 100% of the private 'College Loan" programs. This fact has allowed the Department of Education to formulate 32 CFR 600…'Program Integrity Issues'. The word 'integrity' has nothing to do with "Religion and Morality", Nor does it have anything to do anyone involved in this writing it, to "..shall be bound by Oath or Affirmation, to support this Constitution – which means ALL of this Document, and its Twin – The Declaration; and especially Article IV:2,4! The word 'administration', as long as our government, at any level of governing, allows a very, unConstitutional "Closed Shop"; union's will "rule and write regulations" which are Not Law and are never viewed, by any person directly elected by "We the People" — including the President of the United States of America. Unions have never grown-up in responsibility from their beginnings of industrial mining, shipping; criminal-force too many times, if only because of force of membership and concomitant removal of several million, individual, rights to liberty. Unions remain a bulwark for Socialism.

      Here's one example that pops-up any 'Constitutional Conservative: 'Integrity' has everything to do with 30 changes which "strengthen and improve administration of the programs authorized under HEA". The three working words are 'strengthen and improve administration'. Why? Has absolutely nothing to do with the Webster or Oxford dictionaries' definitions of the words. You have to change your thinking to Saul Alinsky's "The End Justifys the means": "In a separate chapter he suggests that the perennial question, "Does the end justify the means?" is meaningless as it stands: the real and only question regarding the ethics of means and ends is, and always has been, "Does this particular end justify this particular means?" These rules of the ethics of means and ends are only one chapter of his book, totally distinct from his "clear set of rules for community organizing."(from Wikipedia, "Rules for Radicals").

      Reasons why the Socialists cannot allow the wealthy to be included in the Bush Tax Program (Didn't our Former President have 'Fore-Sight':-)! I smile every time everyone has to use one of the Best President's in US History, name!! It's millions of votes for Life, Liberty, and the Pursuit of Happiness from God rolled into one location – our taxes – which have no limit – except the self-imposed, 'Religion and Morality' of our Republican Form of Government. And so 'We the People' can see, learn, understand that allowing any, but a Republic try to rule US(A); that the outcome Shall Always Be The Same: Few men, in the Executive Branch, with closed-shop union, regulation writing via non-elected cabinets with non-identified Czars working "to help the President learn his Office" from 1/20/09 supporter-lemmings — like Dodd, Frank, Reid, Pelosi — Shall, with vigor and force — spend the United States of America and it "Posterity-children" out of Both Our Documents of Individual rights and duties – Under God.

      —"The Financial Stability Act" ; This is the empowerment:HR4173 by Barnie Frank -Charles Dodd (so much for the example of ethics defined by committee in government) WITHOUT Cosponsors— "Wall Street Reform and Consumer Protection Act of 2009 – Title I: Financial Stability Improvement Act – Financial Stability Improvement Act of 2009 – (Sec. 1000A) Directs the Comptroller General to audit and report to Congress within two years after enactment of this Act on all actions taken by the Board of Governors of the Federal Reserve System (Federal Reserve Board) and the federal reserve banks during the current economic crisis.

      Subtitle A: The Financial Services Oversight Council – (Sec. 1001) Establishes the Financial Services Oversight Council, consisting of the heads of specified federal financial regulatory bodies and chaired by the Secretary of the Treasury. Requires the Council, among other things, to: (1) advise Congress on financial domestic and international regulatory developments, including insurance and accounting developments, and make recommendations to enhance the integrity, efficiency, competitiveness, and stability of the U.S. financial markets; (2) monitor the financial services marketplace to identify potential threats to the stability of the U.S. financial system; (3) subject financial companies and activities to stricter prudential standards; (4) recommend that a member Council agency adopt stricter prudential standards for the firms it regulates in order to mitigate systemic risk; and (5) resolve, upon request, a jurisdictional dispute between member Council agencies."

      Everyone who calls themselves American, look at this, learn from it; and teach your children – because you cannot be too busy to teach 'Religion and Morality' with the Duties of Birth-right or Naturalization-right; and because public education – Shall Not obey either The US or The State Constitutions in teaching anything, except Revisionist, politically correct, interpretation of those old men writing the Declaration, "who never spoke of slavery, but all owned slaves."(from "American History, the Revolution").

      For these Socialists, it is the amount of money they need to continue their "ingraining of Socialism" only slightly disguised as "Democracy", with perhaps a bit of Progressive……But Never, Never a Creator of "powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them,.."!!!!

    20. Jim Kinnu, Fountain says:

      I agree with you whole heartedly, raising taxes when we have high unemployment is ridiculous!!!! However, the projections you make for job losses for raising taxes are totally different than those put out by the Administration. It would be beneficial to supporting your case if you identified the errors or differences in your projections and those of the Administration. We all need to understand why they don't know how to project any economic data and maybe they would learn something!!!!!

    21. Stacey, So Calif says:

      According to your bullet points, extending the current rates for one or two years (which as of today appears to be the proposal that will be passed) will result in a statistically MUCH LARGER net job loss by 2020 than would be realized with the Dems' original compromise proposals of increasing taxes only on those of us who make more than $200k/$250k or $1mm?

      Seriously? This seems to contradict everything that's been stated previously, i.e., that even if taxes are raised "only" on the upper middle class or the so-called "very" wealthy, it will result in catastrophic job losses.

      As a family that will feel the brunt of any tax increase, we are definitely in favor of making the current tax rates "permanent" (as if there is such a thing in Washington), but these two compromise proposals seem to present a very grey zone,

      Please clarify…

    22. Kevin H, college par says:

      I just wish Heritage was not so partisan – i don;t remember them being this partisan in the past – they seem to have gone the route of FoxNews, manipulating the facts anyway they want to.

      First – Conn speaks about how only 'an anemic 50,000 jobs were added'. Where was Heritage and Conn 2 years ago? When the current adminsitration took over, monthly job losses averaged over 700,000/month. Yes, nearly a million jobs a month were being lost when President Obama took over. We've now had 11 straight months of positive job growth in private sector, yet Conn would make you think things were better under the last months of Repub administration and their tax policies.

      Second – Conn states the leftist Senate were trying to raise taxes. That is silly. Conn, what baseline are you working off of? Certainly not any baseline congressional economists are working off of. Right now, if nothing is done, the republican tax cuts implemented under reconcilliation will sunset (expire). The reason they expire is due to how the repubs passed it and the huge impact the policies have on adding to the deficit. If congress does nothing, everyone's taxes will increase – we're talking income, capital gains, dividends, child tax credit, eitc, make work pay, etc…. Schumer's bill on Saturday would have extended the cuts for the first million earned for all americans. Yet Repubs would rather add 4trillion to the deficit over the next 10 years – on pace with the amount they added during their recent control of congress.

      Finally, Conn, you know full well CBO did analysis of what provisions would be most stimulative for the economy. Of all provisions, extended the upper income tax cuts was the least stimulative. It was at the bottom. For every million dollars spent, upper income tax cuts will create one to three jobs – and it has huge impact on long term deficits and debts. Seriously, this is what the right wants? Yet they oppose the most stimulative provision (unemployment extension) which has nearly no impact on long term deficits and debt.

      Seriously? I can only hope you keep pushing for these through 2012, eventually america will wake up.

    23. Henry says:

      MERRY CHRISTMAS! The RICH do not pay taxes. Government can tax the rich at 90%, they will find ways of not paying taxes. The middle class pay all taxes for the rich and the poor.

      Why were the rich screaming so loud? They do not pay taxes. Why we have tax books five inches thick, for the rich!

    24. Linda, Louisiana says:

      I'm glad you cleared up the statistics on continuing tax cuts versus loss of jobs. I was also confused. About continuing unemployment benefits, as I understand, a recipient must apply for employment. Extending benefits could promote unemployment just as extending or additing welfare benefits promotes welfare. There should be a happy (or unhappy) medium. If he/she is offered a job (a job within reason – to be defined) at less pay than that previously earned, the individual should have to take the job with U.I benefits supplementing the earned pay. Workers are needed and are going to illegal immigrants and others who will accept the lower paying jobs. Welfare benefits should work the same way. There needs to be an incentive for people either unemployed or drawing welfare to be weined off federal aid.

      What I do not understand about the negotiations to continue the tax cuts, is why are payroll taxes (FICA/Social Security) being reduced. That Social Security is already in trouble.

    25. Mike Minneapolis says:

      Evan, Anchorage,

      Now that the compromise has been reached, you can add "reduce Social Security Contributions into a system on the brink of bankruptcy." What a country!!

    26. THE VIOCE OF REASON says:

      My friends and citizens of the U.S.A..

      Remember pearl harbor? We are now engaged in a silent and soft war…

      please wake up and know that this is a war not with bombs and guns but a war waged with gold… greed and the lowest common thread, Money!

      The largest transfer of wealth in world history is the cause of our adversity.

      Our enemy is sitting back laughing as we fight among ourselves.

      We have bailed out financial institutions that have taxed our societies and sent our jobs abroad! The only way to fix the mess is to bring the jobs home that matter the most to our future as well as our economy. The world is listening to our conversation among ourselves the one that says we have not managed ourselves let alone set the mark for the rest of the world. We are the greatest

      country in the world and it is time to stop the sell off and buy out of our dream

      the american dream! Wake up U.S. ! GOD BLESS AMERICA!

    27. George Colgrove, VA says:

      If all this goes through, it is not a solution – just a continuation of current federal practice (I dare not say business). The federal government is ruining this country and passing the tax cut extension for just two year does not change anything. Jobs will continue to be cut. We need deeper cuts to the tax rates and we need even deeper cuts to the federal government. We are bickering on keeping the status quo. If we add the "compromise" of extending the unemployment benefits, then we are falling behind. I would almost feel better loosing the tax cuts for the "wealthy" and not have the extension to unemployment. Then in the next congressional session, we can start crafting real tax reform that results in the elimination of the IRS and imposing a fairer and simpler flat tax.

      Taxes should be only collected on income and the sale of non-food goods (taxes should not be collected on property in perpetuity). Sales tax should only be collected at the state level. Income tax should only be collected at the town level. The towns pay a percent to the state. The states in turn pay a percent of receipts to the feds. The Federal Treasury will only need to hire a group of three people to collect checks from 50 states plus some territories. States will only need a few people to manage the sales tax and to receive payment from the towns. Our income data is stored at the town or city clerk not some "secret" dungeon in some federal office. Towns can be far more secure, transparent, and accountable to the people then the guarded federal government. We all know how good the federal government is about keeping secrets as of late. The local tax collectors (who are already there) will shift from collecting property tax to s simpler income tax. This program eliminates two layers of imposing and expensive government.

      Prohibiting the collection of property tax by any entity will explode the home improvement industry as people will be able to build the palaces they have always wanted without fear of paying higher property taxes. People will start buying cars that are more expensive. By changing nothing else and doing only this, the economy –as bad as it is now, can start the boom.

      As for income taxes, people will have up to four deductions. An amount that is calculated by taking the income at the poverty level for a family of four and dividing that by four. Each household will be allowed two deductions for adults and two deductions for children – no more. The deductions are taken off the income and the flat tax is applied to the remaining amount. I would also impose a minimum nominal household tax – so everyone has "skin in the game.”

    28. Steven Seiberg, Gord says:

      The Congress needs to approve BIG SPENDING CUTS, they need to Reduce all Payroll Taxes across the board, they need to pass the added value tax or make a National Sales Tax, they need to reduce the Salaries of all Government Positions/ White house staff, Etc,Cut-out all Non-essential spending,they need to do away with Federal income tax,( if not, )then cut it down by 40%percent to all taxpayers, they need to trim & trim, & trim all Government Departments, raise all import/export taxes on All Goods, coming in and going out of this Country to include all Tariffs taxes, as well, they need to especially, reduce all BIG Government!! now… and i almost forgot Reform all Federal/State/local Tax Codes in this Country. and stop relying on States with Lotteries to fund Our Future childrens Education, oh yeah, Take MORE Responsibility & Accountability for the MESS they have Gotten OUR COUNTRY IN.!!! Thank you very much! it's NOT Rocket Science on how to get this country back on track, Oh yeah, just about Forgot the biggest thing, Boot all" LOBBYISTS OUT OF WASHINGTON D.C". Thank you from a hardworking overtaxed taxpayer.

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