There’s a growing pushback among conservatives against the tax
deal that Republicans negotiated with President Obama, which is
scheduled to be voted on next Monday in the Senate. Charles
Krauthammer
denounced it in today’s column, dubbing it “Stimulus II.” Erick
Erickson has
branded it a “TARP baby not worth supporting” and is urging Red
State readers to call their Senators to vote “no.” And among
elected Republicans, Jim DeMint and even John McCain have
expressed reservations. So is it as bad as they’re saying?
To start with, let me just say that I think Krauthammer’s
argument is overblown. My major beef is that in equating the tax
deal with the February 2009 stimulus package, Krauthammer is
accepting the liberal premise that taxes and spending are the same
thing. While it’s true that from a budgetary standpoint, a
reduction in revenue to federal coffers will increase the deficit,
just as an increase in spending would, the difference is that a tax
cut allows individuals to keep more of their own money, whereas
expenditures represent the government confiscating wealth and
distributing it as they see fit. Seeing tax cuts as a cost to
government is to accept that all income earned belongs to the
government in the first place. To the individual who comes home
with a fatter paycheck because they’re sending less of their hard
earned money to Washington, a tax cut isn’t a cost, but a
savings.
At another point in the column, Krauthammer writes that
two-thirds of the price tag of the deal “is above and beyond
extension of the Bush tax cuts but includes such urgent national
necessities as windmill subsidies.” This is highly misleading, as
it gives off the impression that most of the deal is just
pork-barrel spending. But that’s not the case. In reality, an
overwhelming majority of the $857 billion* represents tax breaks
that are traditionally unobjectionable among conservatives. I’ve
tried to break this down in a graph and pie chart below, but first
I want to elaborate on what the various terms mean. And I decided
the best way to do that would be to split the provisions into three
categories: those that aren’t controversial among conservatives,
those that are on the borderline, and those that are more
controversial. The estimated “cost” of the tax breaks come from the
Joint Committee on Taxation and the estimated cost of the
unemployment extension comes from the White House.
Noncontroversial: Extending the 2001 and 2003
Bush tax cuts to all income levels would add an estimated $364
billion to deficits, adjusting the Alternative Minimum Tax for
inflation so that it doesn’t hit millions of Americans would add
$137 billion, and the estate tax deal would add $68 billion. While
conservatives would prefer more — making the tax cuts permanent,
abolishing the AMT and estate taxes, by in large these provisions
have generally been supported by conservatives. The total cost of
these noncontroversial provisions is $569 billion, comprising 66
percent of the deal.
Borderline: These are the provisions that many
conservatives support, some oppose, but most can live with. These
include the payroll tax holiday, which is estimated at $112 billion
and the $22 billion expensing provision* that allows larger
businesses to deduct 100 percent of the cost of equipment purchases
in the first year, and 50 percent in the following year. When you
add these to the noncontroversial provisions, that brings us to
$703 billion — meaning that most conservatives could probably live
with at least 82 percent of what’s in the compromise.
Controversial: These are the provisions that
have generated the most criticism among conservative opponents of
the deal. One is the unemployment extension, which is $56 billion
and represents the only direct spending in the bill. Another $43
billion represents tax credits that were part of Obama’s stimulus
package — including one for college expenses, as well as
adjustments to the child tax credit and earned income tax credit.
But the most controversial element among conservatives is the $55
billion in so-called “tax extenders,” (see a list of them
here). These are various tax breaks for businesses, including
tax credits for ethanol and biodiesel. Earlier today, I spoke with
Ryan Ellis of Americans for Tax Reform, and he pushed back against
describing these as earmarks, because they allow businesses to keep
more of their own money. While it would be ideal to get rid of all
the various deductions as part of a broader corporate tax reform
that lowered rates from where they are now (40 percent including
states, making it the highest in the world), Ellis argues that in
the absence of such reform, it’s better that some businesses are
able to get some form of tax relief.
Bottom line: I definitely have an issue with
some of the targeted tax credits to special interest groups and the
unemployment insurance extension, which I think should be offset
with spending cuts, at a minimum. I think these are ongoing battles
worth fighting. But I’m also skeptical that Republicans would have
been able to get a better deal with this Congress and this
president. I don’t want to see taxes go up next month, and I would
much rather enter a debate over fundamental tax reform starting
from the Bush tax rates as the status quo than I would with higher
rates as the status quo.
At the very least, I think that conservative critics of the deal
have gone way overboard in attacking the deal as some sort of
second coming of the economic stimulus boondoggle. If some
conservatives still feel that the unemployment subsidies and tax
credits are not worth swallowing, that’s one thing. But we should
still recognize that an overwhelming majority of the deal is stuff
that conservatives have either been actively campaigning for or
would be perfectly comfortable with.
Anyway, with that wind up, here’s a pie chart I put together
breaking down the estimated affect of various provisions on the
deal on the deficit.

And here’s a (slightly) more detailed breakdown of the deal,
with dollar amounts.

*Some people may be confused as to why there’s such a
discrepancy between the $857 billion cost in the figures I’ve
presented, and the $990 billion figure Krauthammer used in his
column. The bulk of the difference is due to how one chooses to
consider the cost of the business expensing provision. Because of
the way equipment depreciation is accounted for, the ten-year cost
is actually much lower than the two-year cost.
Here’s the breakdown if you prefer the $990 billion estimate,
though it doesn’t much change the substance of the argument
above.
Jeff| 12.10.10 @ 4:42PM
we are the owners of the company ... getting to keep more of our money is not a cost ... government spending of our money IS a cost ...
Dr. K is full of it in this case ...
Warrior | 12.10.10 @ 4:46PM
No. This is a RINO-liberal deal. This deal is still a handout to those who don't pay taxes, gives away money we don't have to green initiatives that have no chance of working, continues to redistribute wealth by funding big government entitlements and is loaded with plenty of pork. It will also allow the nut job in the oval office to extend his class warfare into an election cycle. McConnell and Boehner did not get last months message.
Michael L. Hauschild| 12.10.10 @ 4:59PM
No. More "deals," more deficit spending, more lies from the capitulators. Business as usual, the stupid bastards have not learned a thing.
e cowan| 12.10.10 @ 8:42PM
"No. More "deals," more deficit spending, more lies from the capitulators. Business as usual, the stupid bastards have not learned a thing."
Short and to the point. Amen!
Neo-libertarian| 12.12.10 @ 11:16AM
McCain and Lindsey are trading DADT for START, in collusion with the WH. It is now time for all you Tea Party celebrants to clean yourself up; you have just been “ganged.”
Al Adab| 12.10.10 @ 5:06PM
Apparently the Dems are busy loading the tax rate bill (not a tax cut) up with line item after line item of pork spending allocations. Good thing they read it before they passed it (to borrow). This game playing is the stuff of nightmares and is the ultimate reason for the voters revolt.
Derek Leaberry| 12.10.10 @ 5:22PM
No. The Republicans can negotiate a better deal with less spending next year. Remember, Obama needs economic growth in 2011-12. He needs the Bush tax cuts as much as the Republicans do. If the Bush tax cuts are not continued, America will have a double-dip recession and Barack Hussein Obama can't have that.
Also, once taxes are taken care of in this lame duck Congress, Harry Reid and company can roll the Republicans on Dream Amnesty and Don't Ask, Don't Tell. With the lame duck Congress in mind I am reminded of Oliver Cromwell's profane words when he fired Parliament 350 years ago- "In the name of God, go!". The Reid-Pelosi Congress should go home and a stake of holly hammered through its evil heart. It is a maggoty carcass not fit to feed vultures.
Al Adab| 12.10.10 @ 5:28PM
Derek,
Truly they have sat too long for any good they have been doing.
Occam's Tool| 12.10.10 @ 9:42PM
"Depart, I say, and let us have done with you. In the name of God, go!"
Yes! Dismissing the Rump Parliament speech---how apropos. Well played, sir.
Margie| 12.10.10 @ 5:24PM
I heard Rush talking about all of this today. It makes me think of that old saying.. "what a tangled web we weave.."
It also reminds me of what Ben Franklin said.. "A republic, if you can keep it!"
And yet another by John Adams, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”
Corrupt politicians, elected by the people, year after year, decade after decade, and it is all such a mess. The only way it's gonna change is if we stay angry, and keep voting them out.
What a mess.
thirteen28| 12.10.10 @ 5:38PM
Good points, but I'd still rather see the GOP run out the clock on this one. Let the next House with a large GOP majority vote on keeping/reinstating the tax rates at the levels set by the Bush tax cuts as a stand-alone bill - and dare the Dem majority in the Senate to vote against it or Obama to veto it.
CalMark| 12.10.10 @ 5:39PM
No.
This much analysis indicates a bad deal. Drop it, stand back, and put the Dems on the hook for whatever emerges--whether this monstrosity or the coming tax increases. Fix it in January, but don't lose leverage for a bad deal that violates your Pledge to America, which "our" guys are saying is not operative yet. (Uh-huh. See how that plays in the 2012 primaries. Assuming the USA still exists.)
Who are these morally defective partisan oligarchs? And why won't they respect the wishes of their voters?
An extension of current tax rates for just two years is economically neutral, at best. Obama is sure to keep calling it a "tax cut for the rich" and use it as an anti-Supply Side, Class Warfare brickbat in 2012.
This thing is being larded up with pork, and is starting to feel like the the runaway feeding frenzy in 2008, when the GOP told the American people, "Screw you, plebeians. Look at all these lovely sweeteners!"
That seems to have taught them nothing. TARP II resistance seemed more partisan than conviction. The grassroots are outraged, yet Republicans still seem so eager to make this deal. Frightening.
P.S. I'm done with Krauthammer. No supply-sider he. Worse, he's become the consummate D.C. Insider.
Clint| 12.10.10 @ 5:42PM
" Sen. Jim DeMint (R-S.C.) urged his GOP Senate colleagues Friday to reject a deal on the extension of Bush-era tax cuts and wait until the incoming crop of GOP senators are sworn in to move forward.
In an e-mail to supporters of his Senate Conservatives Fund, DeMint said waiting until the January arrival of many of the Senate Republicans, whom he helped elect this past cycle, would mean the GOP could "fight for a better deal."
"I appreciate the efforts made by my party's leaders to negotiate this deal but I believe Americans deserve much better. This deal should be rejected and then fixed," DeMint wrote. "We can easily extend these tax rates without increasing spending once the new crop of Republican senators, including Pat Toomey, Marco Rubio, Rand Paul, Mike Lee and Ron Johnson are sworn in."
Neo-libertarian| 12.11.10 @ 10:24AM
On that note:
Nebraska Senator Johans,
You are about to become one of the most prolific pork producers in the Congress. Your "business as usual" eight hundred and fifty billion dollar "tax deal" has brought shame to the honest taxpaying Nebraskans struggling to keep their solvency. Nelson and the health care, you and your agri-business ethonol subsidies. There used to be a time when business people made their success by hard work, business ethic, and self made profitability. They earned their "profit" and willingly paid a fair share. Now they, through you, buy lobbyists, lobbyists paid with those subsidies and also burgeoning the National Debt.
You have lost your moral compass, you have surrendered all perspective as to the outcome of your "representation," you are just another money grubbing extension of the big business Barons that stole the family farm. Thievery from children seems to be all your peers are capable of, whether it is from the heirs to the homestead through capital gains or inheritance/estate taxation to burdening our offspring with national debt while depleting your constituent’s social security.
Merry Christmas you fiscal fool and realize that the only joy in the average Americans future will be those election days when we can vote you and your ilk out of office.
Penny| 12.10.10 @ 5:47PM
Derek Leaberry: Agreed.
If this bill passes, how much better will the reps do with the outrageous CR/omnibus bill, crammed as it is/will be with DREAM, DADT, the Food Safety Modernization Act, a land and water grab that will cede huge tracts of the border states to Mexican drug cartels, a $3.6Billion check to the unelected and still unaccountable health czar Berwick - overall $19Billion added to the House version? Not to mention that it ties republican hands until September 2011 and maintains 2010's overspend.
The omnibus bill has been referred to by Senator Coburn, correctly, as a Trojan Horse.
So yes, this tax bill, already laden with biofuel and other benefits, should not pass unless you have unbounded faith in the republican leadership's ability not to get snookered again by BHO.
Expel "The Ruling Class"!| 12.10.10 @ 6:39PM
Hell no! And the absolutely spineless GOP "leadership" didn't learn a damn thing from November's elections. Krauthammer also, has become a dupe of "the ruling class". I will not pay heed to his RINO drivel anymore. Until the current GOP "leadership" is replaced & conservatives tune out "ruling class" pinhead pundits who are in favor of keeping the staus quo nothing will change & "the ruling class" will continue to thumb their nose at conservatism & the American people.
Curly Smith| 12.10.10 @ 7:48PM
There is nothing truly Conservative about the bill. Extending the current tax rates has zero stimulative value, it merely adds two years of uncertainty to the equation. Extension of the Bush Tax Rates simply means we'll be hearing about the issue until, and after, the next election. The rates must actually be cut, and cut for another 10 years, to have any stimulative value.
The same argument applies to the temporary payroll tax reduction. Temporary cuts are fine if you're trying to move future sales into the current period (think "cash for clunkers") but if you're looking for long term benefits then you need material change.
Ultimately, we're simply increasing the deficit and wasting capital buying politicians to no net improvement in the economy. This bill is a complete sham and is exactly the sort of bill that caused the GOP to lose their majorities. Consequently, I predict that it will pass with large GOP support. A sham bill for a sham Conservative Party.
handbagboots | 12.11.10 @ 12:46AM
Thanks for sharing your article. I really enjoyed it.
martin j smith| 12.11.10 @ 8:53AM
Let Bernie sanders continue his rant, bring him food and drink and set an alarm to wake up periodically to make sure he is still talking.
KDW| 12.11.10 @ 9:55AM
It's difficult to believe that we still have to fight
for the efficacy of tax-rate cuts, even with
conservatives like Krauthammer. Lower tax-
rates almost always allow for faster economic
growth which leads to larger tax collections.
The U.S. discovered this in the 20's, 60's, 80's,
90's and 00's. Hasn't Krauthammer read and lived
this history? Krauthammer is normally a
brilliant guy but he frequently comes up short
on economic issues.
Besides we're not talking about tax-cuts. This
agreement only continues DOING THE SAME
THING WE HAVE DONE FOR THE LAST 8
YEARS! The deal only keeps us from piling on an
already bad situation.
Make this deal and move on - there is no reason
to overthink it.
Michael L. Hauschild| 12.11.10 @ 12:17PM
McCain says he will vote for the new 850 billion dollar stimulus package (tax deal).....shocked, shocked I tell you.
martin j smith| 12.11.10 @ 12:57PM
The more I think about it the more I believe this "deal" is really one of the crucial elements of the 2012 election. And, the question is this: If the economy goes up or down who will get the credit or blame ? Also, the issue is not about accuracy or truth but of perception. A majority of Americans in recent polls support this agreement for whatever reasons. Here is the ideal scenario. Let the DEMOCRAT LEFT CHOOSE BETWEEN KNOCKING THIS DEAL DOWN OR SUPPORTING IT. Do not do their work for them. By all means support Bernie baby's filibuster. with food,drink and song. Dare these lefties, these class warriors to get into the class warfare rhetoric and dare them to kill the economy. Why help the Democrat Socialists. See no matter what the Repub/Tea Party side wins. If the economy goes up all of the speeches including Obama's can be used against them while our side takes credit for maintaining current tax rates and warning against increase defici and also the danger of increase unemployment. Our side should take the position that the increase of taxes would be devistating and that we made a supreme sacrifice for the sake of the greater good of our national economy. Then the new congress take shots at the spending side and create an alternative tax reform to Obama's Basically attack the the class warfare element and the deficit
issue continuously.
PattyMor| 12.11.10 @ 1:36PM
Why did Mitch McConnell rush to make this deal? It seems to be is that he wanted this Marxist/RINO package negotitated BEFORE the conservatives in the new congress can take their seats.
Remember Obamalini specifically wanted the tax
"reductions" enacted from his spend-a-palooza package. Within it, was a large increase in the Earned Income Tax Credits.
This a bad deal and is not a good omen for conservatives. And, extending unemployment is a big burden on small business because they get billed for a portion of the unemployment taxes. It would be better to let the tax rates expire. At least if you are not making money, you don't pay income taxes.
David Unterburger| 12.11.10 @ 4:01PM
vote no, it has turned into a another pork barrel project. You must take out everything but the original tax cut to aprove this bill. The next election will clean out supporters of these bills.
manuel tamargo| 12.11.10 @ 7:08PM
VOTE NO , LET DEM EXPIRE WE WILL FIX THEM NEXT MONTH
Paul Andrews| 12.11.10 @ 10:50PM
112 billion that would and should go to social security, this will kill social security. After robbing MEDICARE i knew that Obama hated seniors but now GOP is going along with killing SS too? No Way
martin j smith| 12.12.10 @ 8:34AM
Here is what worries me. I have heard that polls say "Americans" support this tax deal by V. What I worry abut is this: who will be blamed for any economic collapse and be punished in 2012 ? We have to make sure it is the LEFT Socialists that get targeted again!!!!!!!!!!!!!!!!!!! If Obama or "Clinton" get re-elected we are doomed !!!!!!!!!!!
Oldefarte| 12.12.10 @ 10:04AM
Charles K. is a very intelligent person, but he obviously donen't know squat about economics/finance. A tax issue is not stimulus, but rather governmental receipts/income. Governments do not EARN same, since they neither produce a product or a service, and derive same from forcible taxiation of those that do so. As long as this administration's socialistic, wealth redistributive agenda is controlling our government, businesses and consumers will not invest, buy, or grow their operations out of fear. Once this government is replaced will be the beginning of stimulation, not before!!!!
martin j smith| 12.12.10 @ 11:38AM
Oldefarte is on the money!!!!!!!!( so to speak )
This is why it is imperative to get rid of Obama and the Left Socialist regime. Thus I think strategically, not necessarily ideologically. The most crucial thing is to convice the voter that it is the Left Socialists that are skrewing them and that the Tea Party et al. are really the ones who are the good guys. Problem is that perception runs higher than truth. Thus it is extremely important that this be the perception!!!!!!!!!!!!!!!!!!!!! As well as the truth.
Oldefarte| 12.12.10 @ 3:08PM
Martin, I think that the voters have already begun to figure this out, since the INDEPENDENTS voted overwhelmingly for CHOSEN in November of 2008; and recently on 11/2/10 reversed course and voted in Republican candidates that will assume control of the House on 1/1/11. Hopefully, their former ignorance, now enlightenment, will continue with the 11/2/12 elections and beyond [and put this country on the road to eventual survival]!!!!
DVD drive Burner | 11.8.11 @ 4:19AM
How to Burn an AVCHD File to DVD
AVCHD is a new high definition standard created by Sony, and used in many of their HD Camcorders. The resulting AVCHD disc is then able to be played in many consumer Blu-Ray players, the Sony Playstation 3, as well as the camcorders themselves. These are capable of producing 1080p and 720p video.
Instructions
1
If you have not done so already, plug in your camcorder to your PC. If an autoplay box does not appear, locate the camcorder's files on your PC. Two folders are needed in order to properly burn an AVCHD onto DVD, and they are BDMV and Certificate. Once they are located, copy and paste these two files onto your desktop. This could take anywhere from 2 to 10 minutes.
2
Once they are transferred to your desktop, go to the following web address and download the software:
http://www.imgburn.com/index.php?act=download
Once downloaded, install the software by double-clicking the downloaded file and follow on-screen instructions.
3
Right click the AVCHD folder that you just transferred to your desktop and click on "Properties." On the General tab, locate the size of the file in order to specify how big of a DVD is needed to burn the files. Sizes up to 4.3GB will fit onto single layer DVD's. If the size exceeds 4.3 GB, a dual-layer DVD is needed. Once you figure out which DVD is needed, insert it into your PC's DVD-RW drive.
4
Imgburn Software
Open the ImgBurn program that was just installed. Click the option that reads "Write files/folders to disc." The next screen is where you need to click some options. The image provided locates the options that need to be checked and unchecked. Make sure the "Auto" box is checked and the "Verify" box unchecked. After this is done, add the 2 folders (BDMV and Certificate) into the large open space. This can be done by either clicking on the magnifying glass and adding them, or by simply dragging and dropping them into the program.
5
Once the files are loaded into the program, the settings will verify you want to change to UDF 2.5 burning mode. Click "Yes" when prompted. Next, simply click on the large icon located near the bottom. You will be greeted by a few pop-ups verifying your disc burning session and allowing you to name the disc. Click "OK" and your burning will start.
6
Once the burning is complete, remove the disc and insert into appropriate Blu-Ray players or Sony Playstation 3. If all went well, you will be enjoying your home movies in amazing quality, also allowing you to start a library of HD home movies, instead of storing them on a hard drive
Tips & Warnings
Memorex and Verbatim DVD's have the best success rate. Verbatim Dual Layer DVD's are the best to use when needed. Be patient, burning might take a couple tries.
Depending on your PC's DVD drive and Blank disc, you may go through a few DVD's until one works perfectly. AVCHD does not work on all Blu-Ray players, so check with the manufacturer first. Do not pirate copyrighted material.
more info:
http://www.drives-storage.com.au
DVD drive Burner | 11.8.11 @ 4:19AM
How to Burn an AVCHD File to DVD
AVCHD is a new high definition standard created by Sony, and used in many of their HD Camcorders. The resulting AVCHD disc is then able to be played in many consumer Blu-Ray players, the Sony Playstation 3, as well as the camcorders themselves. These are capable of producing 1080p and 720p video.
Instructions
1
If you have not done so already, plug in your camcorder to your PC. If an autoplay box does not appear, locate the camcorder's files on your PC. Two folders are needed in order to properly burn an AVCHD onto DVD, and they are BDMV and Certificate. Once they are located, copy and paste these two files onto your desktop. This could take anywhere from 2 to 10 minutes.
2
Once they are transferred to your desktop, go to the following web address and download the software:
http://www.imgburn.com/index.php?act=download
Once downloaded, install the software by double-clicking the downloaded file and follow on-screen instructions.
3
Right click the AVCHD folder that you just transferred to your desktop and click on "Properties." On the General tab, locate the size of the file in order to specify how big of a DVD is needed to burn the files. Sizes up to 4.3GB will fit onto single layer DVD's. If the size exceeds 4.3 GB, a dual-layer DVD is needed. Once you figure out which DVD is needed, insert it into your PC's DVD-RW drive.
4
Imgburn Software
Open the ImgBurn program that was just installed. Click the option that reads "Write files/folders to disc." The next screen is where you need to click some options. The image provided locates the options that need to be checked and unchecked. Make sure the "Auto" box is checked and the "Verify" box unchecked. After this is done, add the 2 folders (BDMV and Certificate) into the large open space. This can be done by either clicking on the magnifying glass and adding them, or by simply dragging and dropping them into the program.
5
Once the files are loaded into the program, the settings will verify you want to change to UDF 2.5 burning mode. Click "Yes" when prompted. Next, simply click on the large icon located near the bottom. You will be greeted by a few pop-ups verifying your disc burning session and allowing you to name the disc. Click "OK" and your burning will start.
6
Once the burning is complete, remove the disc and insert into appropriate Blu-Ray players or Sony Playstation 3. If all went well, you will be enjoying your home movies in amazing quality, also allowing you to start a library of HD home movies, instead of storing them on a hard drive
Tips & Warnings
Memorex and Verbatim DVD's have the best success rate. Verbatim Dual Layer DVD's are the best to use when needed. Be patient, burning might take a couple tries.
Depending on your PC's DVD drive and Blank disc, you may go through a few DVD's until one works perfectly. AVCHD does not work on all Blu-Ray players, so check with the manufacturer first. Do not pirate copyrighted material.
more info:
http://www.drives-storage.com.au