Tax Cut Extension

I realize my first post should probably be more of the 'Hello World' inaugural post variety.  Perhaps it could outline my goals and motives for creating this blog. Possibly ending with a concise summary of what I hope to achieve. Unfortunately that is not the case.

Given the pace of the current political landscape I wanted a chance to comment on the current tax-cut extension bill before it becomes as irrelevant as The Bed Intruder. Was he ever caught? Who cares, it made for a catchy song!

This bill in my opinion is great example of how the two major political parties can collaborate to create a monumental piece of crap. They've managed to come together and despite what I can only imagine is harsh opposition from lobbyists and at the risk of losing campaign backers approved a tax-cut extension for just about everybody. What courage they have to make such an unpopular decision as to extend tax cuts and maintain the status-quo. Well done!

This summary by CNN spells out the major components of the bill. The argument for extending the tax cuts as I understand it is to stimulate the economy. I have an issue with that especially among the top earners. Are the Ted Turners and Warren Buffets of the world really making business decisions based on tax cuts? I don't think so. In fact, they said they don't. If I'm making that much bank I'm bringing most of it home in capital gains anyway and diversifying worldwide. I can't think of any more likely group to spend money immediately in their local economies than the unemployed and that was only tacked on at the end as a compromise.

The Republican party took the stance that they wouldn't consider any other legislation until this issue was addressed, including the 9/11 health and compensation act. While its hard for me to think of a more unpopular act to hold hostage for political maneuvering I can only recall the famous 1979 Drowning Kitty Rescue Act. Pres. Obama maintained the tax-cuts should be extended for income levels below 250k, then it was modified to under 1mil. perhaps hoping public opinion would side with them, because who doesn't hate millionares? After all of this failed they finally have decided to approve it as is, claiming some type of victory by extending unemployment benefits and a payroll tax cut.

Here's a nice summary of the bill:

It will cost $900 billion over the next two years — larger than the bailout of Wall Street, GM, and Chrysler put together, larger than the stimulus package, larger than anything that’s come out of Washington in years.

It makes a mockery of deficit reduction. Worse, the lion’s share of that $900 billion will go to the very rich. Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500. In addition, the deal just about eviscerates the estate tax — yanking the exemption up to $5 million per person and a maximum rate of 35 percent.

The trend as of late seems to be in debt commissions, talk of reducing the debt, cutting costs etc.  Didn't we just freeze federal wages after all? However this mammoth super-sized behemoth of an expenditure is one of the first actions congress takes? Once again, well done!