He too thinks the Dems won handily which seems obvious to me as well though some liberals seem to think otherwise:
"My initial reaction is that the Dems won big, and the GOP was completely rolled (as expected.) However I should add that this assumes the GOP actually favors what they claim to favor. It seems equally likely that the GOP likes high tax rates, tax complexity, the marriage penalty, and big government spending programs, and merely claims to have libertarian leanings on economic issues. So when I say “GOP” I am referring to their alleged beliefs, not necessarily their actual beliefs."
http://www.themoneyillusion.com/?p=18429#comment-217250
Yep, that's one thing Sumner never tires of carping over: 'the marriage penalty.' Overall, he doesn't like the deal. Another thing he never tires of carping about is unemployment benefits which he's sure are somehow prolonging the Great Recession. He also complains that this deal "increases the complexity of the tax code"-what's interesting though is I find the argument about too much complexity itself, very complex... Here he is taking aim at those unemployment benefits he hates so much:
"There is no reduction in the maximum unemployment benefits, despite the recent fall in the unemployment rate. Every day that goes by a larger and larger share of the unemployed become structural, as our labor market becomes more “European.” I have heard several stories from different people I trust, who describe people they know who are enjoying a long vacation at Uncle Sam’s expense, and bragging about it. That’s not to say most unemployed are doing this, it’s just a minority. Maybe 1% of the workforce. But it is becoming an increasing problem as more and more people figure out how to game the system. Ivy league professors overlook this problem because they don’t socialize with the sort of modest income person doing a crappy job who is tempted by this option, and they can’t imagine anyone they know taking this route voluntarily."
http://www.themoneyillusion.com/?p=18429#comment-217250
This led me to leave this comment for Sumner:
"As someone who has been on unemployment-I’m not currently and hopefully won’t be going back on it- I don’t see how you can be tempted. How can you afford a vacation solely on $133 a week?"
"There is no way. However, even if we take the premise that 1% are living a great life on $133 a week, why should the other 99% be punished for that? Why must preventing a couple of bad apples be more important that the 99% aren’t but are struggling and need help?"
"As for the deal I agree the Dems cleaned their clocks. As they should have: like neconservative Bill Kristol admitted on Fox they week after the election “elections have consequences.”
Sumner then complains that there are virtually no spending cuts: true, and that's another reason to love the deal. He then claims that MTRs are going up for almost everyone. This is rather misleading:
"Let’s take my case, someone making less than $150,000 a year. From the headline you might assume that I won’t have to pay more taxes next year. Yet the phase-out of the 2% payroll tax cut will raise my taxes by over $2000. Still, it might appear that my MTR will stay at 28%, as I make more than the maximum income threshold taxed for Social Security. In fact because I am married I’m not in the 28 % bracket; I’m in the 33% bracket. If I got divorced and kept living with my spouse I’d be in the lower tax bracket. One of my colleagues (with a wealthy wife) did this, and saved a huge amount on taxes. (We should tax everyone as an individual, as Sweden does.)"
"OK, but at least my combined married income only puts me in the 33% bracket, and those valiant Republicans were able to stop our evil President from pushing up our MTR on labor income (my main source of income.) Nope, my MTR will rise sharply. But first note than my current MTR on wage income is 35.9%, not 33%, because the 2.9% Medicare tax goes up to infinity."
I love when he uses himself as an example-I mean nobody knows the trouble I've seen! It is true that payroll taxes are going up thanks to the expiration of the payroll tax holiday, however, that's not Obama's wish but the GOP's. Most people's taxes are not going up because of higher rates on those above $450,000.
He then whines about the new investment taxes from ObamaCare and re-litigates the complaining about investment tax income by declaring if you're too stupid to know why taxing capital gains and dividends is the most unfair thing in the world, he's certainly not going to explain why this is to you.
"The GOP did get one minor victory; the dividend tax increase on the rich was scaled back from an absurd 28.4% to “only” 8.8%. It will rise from 15% to 23.8% on the rich. Recall that dividend income is triple-taxed."
"Everywhere else they lost badly. As I predicted last year, the GOP made a huge mistake in refusing to do a deal with Obama back in 2011, and the entire country will now pay the price of their stupidity. Even worse, I doubt they even understand the full dimensions of their failure, or why it happened."
"PS. I’m sick of explaining why the taxation of investment income is unfair, inefficient, and double-taxes wage income that is saved. If you don’t understand, take a course in public finance, or read Miles Kimball’s blog."
Yeah, this is not making me feel less good about Obama's victory. If that was his goal it's having quite the opposite effect.
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