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POLITICAL NOTEBOOK: Local congressmen working on 'fiscal cliff' solution

The holiday season is typically a slow time for politicians -- a break between the election and the new year.

But this November and December, congressmen are spending more time in Washington trying to find a solution to the so-called "fiscal cliff" looming for Jan. 1.

The problem centers around tax increases set to come with the expiration of Bush-era tax cuts and across the board spending cuts outlined in other bills, a situation that some economists say could send the country back into a recession.

Lawrenceville Rep. Rob Woodall said the principal focus of the discussions should be about deficit reduction through spending reforms.

"The president has done a great job of convincing America that this 'fiscal cliff' is a debate about increasing tax revenue. It's not -- everyone agrees that revenue has to go up. The president has taxpayers that he wants to punish and others that he wants to reward, and that's bad tax policy," Woodall said. "While that may be good politics, it is bad policy and Congress will absolutely fight him on it. But when it comes to the need to raise federal revenue from its anemic levels of this recession, we all -- Democrats and Republicans -- recognize that we need to."

Woodall said that the Republican-led House has passed several bills to reduce spending, but the Senate has not. He blamed the upcoming sequestration -- across the board spending cuts scheduled by another law -- on the president and the Senate. And he worries that the outcome this winter will be another short-term fix to the long-term problems.

"Congress and the people are accustomed to these eleventh-hour deals, but we owe America better," he said. "I am proud the House has, year-after-year, laid out long-term plans to get America's excessive spending habits under control. I remain hopeful that we can soon measure 'success' by cutting spending in the areas we need to be cutting and implementing long-term fixes to our broken tax code.

"If I could ask one thing of this new 113th Congress, it would be for the Senate to get in the game and work with the House on solutions early, as the House completed its work on this issue more than 18 months ago. The Senate, on the other hand, hasn't even passed a budget in more than three years," he said. "Consensus and negotiation are absolutely part of the legislative process, but one can only negotiate and find consensus if their partners, in this case the Senate, are willing to create their own ideas and put them on the table for all to see. That is my great hope, and I know that if the citizenry demands it, the Senate is capable of delivering."

U.S. Rep. Hank Johnson, who also represents a portion of Gwinnett, said leaders must complete a "grand bargain" during the lame duck session.

"With (Speaker John) Boehner saying that he would be open to discuss new revenues, this is a good sign," Johnson said earlier this month. "Democrats should be open-minded as we allow negotiations to proceed on a so called 'grand bargain' that reduces long-term debt with a balanced approach of budget cuts along with new revenues."

Political Notebook appears in the Thursday and Sunday editions of the Gwinnett Daily Post.

Camie Young can be reached via email at camie.young@gwinnettdailypost.com.

For archived columns, go to www.gwinnettdailypost.com/politics.

Comments

notblind 1 year, 11 months ago

They don't need to be looking for one area they can cut billions from. They need to be looking at the thousands of $500K to $10M "studies" "grants" "$100 hammers" etc. Just in the defense budget there are many hundreds of these types of expenditures that are bleeding the taxpayer by a thousand cuts.

The very first place they should look is the entitlements to the congress critters themselves. It's an outrage that idiots like John Kerry get free healthcare and a nice pension from the taxpayer. I don't remember seeing this on a ballot.

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Jan 1 year, 11 months ago

Please, Mr. Woodall, quit playing the political game of insults and get to work on a reasonable solution. You know that many of the cuts that Republicans have proposed are unreasonable and would never be passed by the Senate are are nothing more than political strategy. The Senate has also passed legislation on which the House will not take a vote. To state that Obama wants to punish taxpayers is only intended to further separate the divide between Republicans and Democrats. The fact is that Republicans want to reward their wealthy donors with unreasonable deductions and loopholes, even allowing them to keep money in off shore accounts as a means of avoiding US taxes. Under Ike, a Republican, the top tax rate was 92%. Reduced to 70% by Democratic president Johnson. The income level of the top bracket has been increasing from a low of just $29,750 in 1988 to $379,150 currently. This has been significant rewards enjoyed by the wealthy. Tax increases are not punishment but more of a leveling out long overdue. For those that want to make cuts, maybe the first cut should be large sums given to countries that have no net debt. Why should we continue to run up our debt to support countries that could borrow the money they need? Israel is one such country with no debt and we are giving them almost $3 billion per year.

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Erk 1 year, 11 months ago

So taxing people who make more than you is the answer. Put yourself in their shoes a minute. You work hard and sacrifice with delayed gratification. Then people come forward and say you are "filthy rich" and need to pay more. But at the same time, some lady is filmed in Ohio and broadcast on every news outlet how a we need to vote to keep things like "Obama-phones" which are free from the government. Wouldn't you, as someone who has had to work hard for what you have earned, feel a little disheartened to see how this lady wants to reach into your pocket and take what is yours so they can get something perceived as "free". I am nowhere near the top earning bracket, or the several below that, but I know right from wrong. We have progressed down a slippery slope of giving too much "free" stuff away. Do you think when the government raises the tax rate on the wealthy and it doesn't make a dent in the deficit it will stop there? Nope. It will continue to be raised and snare more levels of producers into higher taxes. It won't stop. OK it will, when all the producers have had enough and either leave the US or quit producing. Fact is - We don't have a tax problem. We have a spending problem. And as far as Republicans rewarding donors - how much did the current administration dole out to his top donors, and still doing it? Solyndra? UAW? Taking by force from others to give to the chosen few. That's a leveled playing field, isn't it.

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Jan 1 year, 11 months ago

Your assumption is wrong. Under Obama's tax proposal, I will pay more in taxes. I do not believe it is fair for me to continue to get special tax breaks. Every time a loophole is created or a special deduction is added, a give away to the wealthy has been created. The biggest loophole is allowing a 15% rate for unearned income. The rational is investments create jobs but the facts are that less than 1% of the investments create jobs. This allows people like Buffet and Romney to pay an effective tax rate under 15% while people under $100,000 may be paying as much as 20% effective rate.

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Erk 1 year, 11 months ago

Jan - big difference in earned income and income on investments (capital gains). Romney and Buffet are getting taxed on INVESTED money working at a risk, so it is taxed lower. Watch what you ask for. Your IRA's and 401k's are taxed this way when traded by the brokers. Tax it more, and your retirement dollars shrink. Take away the tax advantage for putting money at more risk and the pool of money used to start businesses and invest in new ideas drys up. See - taxing the achievers has a trickle down effect. It feels good to punish those who have earned and have more, but that self gratification hurts so many others in the long haul. So many people forget the "luxury tax' in the early 90's placed on Americans who bought expensive things. The American yacht builders (and the jobs with it) vanished because the taxes on the items they built were taxed as a luxury. Those who could afford the yachts were pretty smart. They bought their yachts from builders in the Bahamas, Caymans, and other places where this "stick it to 'em" tax was not in place. More money was lost that collected. Felt good to get even with the achievers, but look who lost the most. It sounds simple and great, but the end result is nill.

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R 1 year, 11 months ago

YOU didn't have to wait for Pres Obama to raise taxes, you could have sent money in all by yourself. Did you take THAT route by chance? YOU may spend your money any legal way you want to BUT with MINE?

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Mack711 1 year, 11 months ago

Those who have the money will keep their money. By taxing the "filthy Rich' will make some of them say enough is enough. Then close their business and move out of the USA and take their money with them. Then what happens to the employees, they try to find other jobs, then there are none. Remember the Government does not have the jobs they are created by business people despite what our president says. So keep thinking that the 'filthy Rich" should be taxed more and see what happens. The only way out of this mess is to cut spending to the bone, give business tax cuts to stay in business. Worked with Regan.

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Why_not 1 year, 11 months ago

Sure it worked for Reagan....he tripled the national debt in two terms.

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SuxBeanU 1 year, 10 months ago

It wasn't Reagan that spent that money, it was congress. regan compromised with the democrat congress tax increases for spending cuts. taxes were raised and the democrat congress couldn't stop spending. that same story will play out again if barry gets his tax increases

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Jan 1 year, 11 months ago

So you believe that it is fair for a company like GE to have billions in profits but pay no taxes. If we close offshore loopholes, these will not be able to get a tax advantage by doing this. Remember, tax is on profits only for a business. And how did it work for Reagan exactly? Oh yeah, tripled the debt! So doesn't get us out of debt.

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Mack711 1 year, 10 months ago

GE is a world wide company in many countries. A lot of their profit was made and stayed overseas. These profits that are made oversea stay in the country of origin. It is cheaper for GE to make the product out side the US then ship them back into the USA. There are more GE employee outside of the country than inside. Most of GE"s business is outside of the country where tax rates are lower, there fore not subject to US taxes.They followed the current tax code that is in place at the moment. So with that in mind our tax system needs to be overhauled from the ground up. Like was stated earlier it is time to put the Fair Tax in place. By the way Nissan, Toyota and other foriegn manufacrures do not pay the same tax rate as US companies.

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Jan 1 year, 10 months ago

GE paid no taxes from profits in the US for billions in profits inside the US. Shipping jobs offshore is one of those loopholes that should be stopped but is not the only one of great benefit to companies like GE.

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SuxBeanU 1 year, 10 months ago

corporations don't pay taxes, their customers pay the taxes. taxes are the price of doing business, therefore taxes are added to the cost of the product. sure, tax the hell out of corporations , but don't complain when you can't afford the products those corporations make and sell.

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Jan 1 year, 10 months ago

Corporations pay taxes only on profits. The cost of taxes does not go into the supply and demand equation. The idea that increasing marginal taxes on business will result in higher prices is one of the shames that the anti-tax people have been able to pull on the uneducated. Prices are set by the supply/demand curve. If you have a product with high demand but limited supply, the price goes up an the profit margin is increased. If a store finds itself overstocked with an item that has little consumer interest, the price is reduced and the profit margin goes down. Sometimes a store will even sell a product at a loss if demand drops too much.

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Mack711 1 year, 10 months ago

Companies pay taxes on goods and services it gets from suppliers and pass this taxation along to, you, the consumer. Now as for profits, lots of companies do not pay on profits due to the fact that they have expenses that are higher than that of the sold goods. it is like you having a tax deducation for your home, property taxes, and other taxes that offset the profits made by the company. Go to almost any large corporation web site ,like GE, GM and others, and there you will see their finicial statements. As stated before, by SueBeanu, raise those taxes on these profits and see how many things you can afford to buy. Cadilac division of GM recently moved their assembly to China, Why, taxes, EPA, OSHA, and too many other government reguations. We are regulating this country out of the market and thus losing jobs.

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Jan 1 year, 10 months ago

So you like pollution and death causing accidents on the job? Regulations are responses to problems and help corporations operate on a fair playing field. You mentioned OSHA so what OSHA regulation would you stop? The Hardhat requirement at hazardous work sites? Maybe the steel ditch reinforces for workmen? Even with these precautions, workmen get head injuries and sometimes buried in a collapsed ditch. If you want to criticize regulations, then find something that is not a reasonable regulation that does cost companies.

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jack 1 year, 10 months ago

Wow! Someone mentions too many regulations and you accuse them of liking pollution and death?
That's a little over the top, don't you think, Jan?
If I said I wasn't particularly fond of cats, would you construe that to mean I wished to brutally murder all cats?

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Jan 1 year, 10 months ago

My point is that regulations have been legislated because of recognized problems. They are not arbitrary restrictions on business. OSHA has improved job safety and reduced job related deaths and EPA has reduced the output of pollutants. When Mack711 mentions these two regulating entities, he implied that he thought they and the connected regulations should be abolished. Any intelligent, sane person would conclude that such an action would cause an increase in on the job accidents and death as well as additional polluting. A long history has demonstrated that corporations are more interested in the bottom line and unwilling to meet such minimum standards without the enforcement of regulations. After making this point, I only requested Mack711 to quit the generalizations so rampant among Republican politicians and find something specific that needs to be fixed. Republicans toss around deregulation propaganda but, to my knowledge, have never proposed legislation that would address any inappropriate regulation.

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jack 1 year, 10 months ago

I've reread Mack's post several times and nowhere do I see he implies the abolishment of any agency. I do think you incorrectly inferred that, but then you seem to allow political ideology to drive your remarks. I read his remarks to be about over-regulation; such as OSHA requiring dairy farmers to post signs in their barns cautioning that manure on the floor can be slippery.

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Jan 1 year, 10 months ago

I thank you for the example. Probably a reaction to some new employ slipping on the floor. But posting a $2 sign, which may need to be replaced every 10 years, certainly would not increase the cost of milk production more than $0.00055 per day. Now can you find any regulation that could be removed with little hazard to workers and save a significant cost to the manufacturer? I have studied OSHA standards and, while finding a few regulations that were written in broad terms encompassing things I felt were unnecessary, the compliance cost of these were all as insignificant as your complaint about a sign.

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jack 1 year, 10 months ago

Yeah, what's a few pennies here, a few dollars there. According to the U.S. Chamber of Commerce, the cost to businesses of compliance to government regulations is $1.7 trillion a year.

But let's make businesses comply with U.S. Dept. of Transportation stipulations that radiation signs must be black on a yellow background, while OSHA demands they be purple on yellow. It's all insignificant.

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SuxBeanU 1 year, 10 months ago

just what does filthy rich mean? I think you mean hard working rich : )

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jack 1 year, 10 months ago

While the top tax rate in '52 & '53 was 92%, it was the marginal rate for incomes of $300,000 or more. In reality, the rate was 20% on the first $2000, 21% on the next $2000, and so on. One would have had to have earned in excess of $2.3 million (in 1950's $) to pay the 92% rate. Also, there were deductions available then that are not available now. As tax rates were lowered, the deductions started to disappear as well. Tax revenues in the 50's were 7.6% of GDP as opposed to around 7.5% in the 2000's, while government spending went from 16.4% of GDP then, to 21.3% since 2001.

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Mack711 1 year, 11 months ago

It is time for the Fair Tax to be put in place and remove a lot of 'overhead' , mainly the IRS. That would save billions of dollars.

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Jan 1 year, 11 months ago

Obviously you do not understand the FairTax which has been so misrepresented by Woodall, Bortz, Linder and others. You should read explanations by economist, not politicians and pundits. To put it simply, those making under $100,000 annual income currently pay an average effective tax rate of about 20%. Under the fair tax, that amount will be closer to 30% and it will not even collect as much revenue as the current system, with the Bush tax cuts. Bortz and buddies want it because it drastically reduces their tax. Consider the difficulty in spending over $1 million per year. This being the case, someone making $2 million would reduce their effective tax rate to about 15%, $4 million income would reduce it to about 8%. And so forth. Read up on VATs (value added taxes) and you will learn that one of the intents is to encourage saving but the economy is driven by spending. If people are not buying, companies do not manufacture and people get laid off. Bottom line, The FairTax simply shifts the tax burden mostly onto the backs of the middle class and drives up national debt. If you have read Bortz and Linders explanation, you would understand that the FairTax does not really abolish the IRS, It shifts the duties of the IRS to processing monthly prebates instead of annual tax returns. This extra work load will only expand the IRS, though they may change its name.

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jack 1 year, 10 months ago

The Fair Tax is not a VAT. While in some instances they are similar, the big difference is a VAT is new revenue in addition to Federal income/payroll taxes. The Fair Tax replaces Federal income/payroll taxes.

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Jan 1 year, 10 months ago

You are correct. It is not a VAT. But you are wrong about why. A VAT can be used to replace Federal taxes. The difference is the levels of calculation. In a VAT, every time materials or parts are sold between companies, a tax is added. This makes it practically impossible for the final consumer to know how much tax is included. It does have the effect of lowering tax on fresh produce since it passes through fewer hands to get to the stores. Canned foods would add just one more step while something like a car would have some parts, made up of sub parts and aw materials, go through numerous steps. However, the FairTax is similar to a VAT since it is an inclusive tax to reduce the realization of the full percentage one is paying in taxes. The FairTax of 23% proposed by Linder is the equivalent to a 29.87% sales tax.

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CD 1 year, 10 months ago

The part that I "like" the most about the "Fair Tax" is the assumption that businesses will magically lower prices to offset the "fair rate" because of compliance savings over existing code. Yes, I can see business leaders huddling frantically to determine how they can lower prices of goods and services more quickly than the next guy.

What a world! What fantastic, altruistic folks! Wow...just wow. And through these magical, altruistic savings as well as the prebate, taxes on those in the middle and those to the left will enjoy a magically wonderful tax rate that they surely will be proud of...and can easily afford.

Again, just wow..

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Oliver 1 year, 10 months ago

There's nothing "altruistic" about this "assumption". It's a simple response in a capitalistic economy.

You really have to look no further than your neighborhood to see examples of this "assumption" that you mock. Do you shop at any of the following places? Home Depot, Lowe's, Kroger, Publix, Walmart, Target?? These companies ( substitute "evil corporations" if it makes you more comfortable) compete by price. They don't lower prices to be altruistic, they lower prices to gain a competitive advantage and earn more business.

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CD 1 year, 10 months ago

I have been around a while. In my years, never have we discussed methods to reduce price, reduce revenue, or reduce EPS. In a public company, constant dividend increases are expected (if dividends are paid). In fact, much of the discussion is centered around passing on price increases in one form or another.

I've worked for a range of companies, including one you mention. Lower prices usually are brought to market by lower quality inputs, outsourcing, etc. Seldom is the net margin sacrificed.

As a side note, I ran out of my normal body wash that is purchased at Body Works, so I used a "bar" of Dove. It's about 1/3 smaller than it used to be. It’s obvious Unileaver didn't opt to sacrifice margin. Enjoy your "bag" of potato chips while you imbibe whatever keeps you blinded to reality.

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