Tuesday, December 07, 2010

A “compromise” on taxes

Or how the rich get to stay really rich while the budget deficit gets bigger and bigger and well you get the idea.

I’m not necessarily saying this is a completely bad idea.

I do have to wonder about the Republicans on this. Spending is bad because it increases the deficit. But keeping tax cuts that will add $700 billion to the national debt is somehow all right. Like I said I don’t get this. Ah, I guess it’s the old Republican idea that if every millionaire becomes a billionaire this will somehow help out everyone else. How exactly does that work?

From the Post

The scope of the agreement, announced by the White House late Monday, was far broader than lawmakers in either party had been expecting. The deal would extend a college tuition tax credit and other breaks for middle-class families that were due to expire New Year’s Eve. And it would revive the inheritance tax after a year-long lapse, imposing a 35 percent rate on estates worth more than $5 million for individuals and $10 million for couples.

And this:

The payroll tax holiday, in particular, is striking for its universal application. Unlike most tax breaks, it would be available to taxpayers at every income level, letting consumers keep an extra $120 billion in their pockets next year. For a couple making $70,000 a year, the holiday would provide a tax savings of $1,400.

$120 billion figure sounds like a large amount but it’s over time. In the above scenario the family is receiving less than $30 a week. And that’s a couple making a lot more than the average family. I wonder how many people are really going to notice that. Not that anyone will have problems with the extra money in their pocket.

This had to be done or the Republicans would have seen to it the tax cuts expired and then blame the Democrats. What has yet to be seen is if this is going to make any difference to the economy as a whole. Right now, I thinking it's not so much.

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