There’s much to laud and much to denigrate in the tax “compromise” coming from the bowels of Congress.
It reminds me of Halloween. You hope to high heaven that when you knock on your neighbor’s door, he greets you with Reese’s Peanut Butter Cups. And in fact he does! Your eyes light up. You remain psyched, until, that is, you see that Almond Joys are being offloaded next. Your eyes begin to roll, but hey, chocolate is chocolate, so you take the sweets without becoming irritable. But then you see your patron dumping the worst candy ever created into your goodie bag: Candy Corn. Now you’re pissed. Who the hell buys Candy Corn, let alone eats it. I mean seriously, that stuff tastes like crap. Not that I know what crap tastes like, but if I had to guess, it would be Candy Corn.
Therein captures the mixed bag of “treats” shoved into the tax bill being heralded as a necessary “compromise,” and which is on the verge of becoming law. There’s a lot to like, as there is a lot to hate.
Here’s your crib sheet, and the only opportunity I’ve had thus far to write about my favorite dinner food.
Reese’s Peanut Butter Cups, a k a, party in my mouth.
The positive economic impact of this bill aside, the fight over tax extensions has further exposed that the presidency, to borrow a line from Barack himself, is way above Obama’s “pay grade.” First, the incredible showing that took place at the White House briefing room on Friday. Here we have perhaps the biggest policy debate since health-care “reform” — should we or shouldn’t we maintain the current tax rates — and Obama punts the responsibility of answering tough questions to his predecessor, BJ Bill Clinton.
“Hey, I’m President Obama, remember this guy from the ’90s. He was the president, too. OK, I’m done now. I don’t really know what to say to you reporters. My wife Michelle needs me in the kitchen making eggnog. Peace out!”
As if that weren’t golden enough, Obama and his advisers are arguing that keeping the Bush-era tax cuts in place (you know, the ones they loathe), will actually “grow our economy.” This rhetoric has his kook base infuriated because, in effect, Obama has ceded the intellectual debate of supply-side economics to conservatives.
To put this in perspective, Democrats currently control the House of Representatives, the Senate, and the presidency, and it looks like we’re going to get legislation passed that primarily consists of maintaining a tax structure that they’ve been railing against for years.
Obama sounds as if Milton Friedman has been tormenting his Marxist mind at night. The fact that he’s out pimping the ideas of “trickle-down” economics is the leftist equivalent of drawing the Prophet Muhammad with a bomb in his turban. Blasphemous!
The “compromise” itself is a gentle victory for the American taxpayer. No one’s taxes will go up in the next two years. Each income bracket would be frozen. If you’re a low-income earner, your rate won’t balloon 5 percentage points and, similarly, if you’re a high-income earner, you’re rate won’t jump 4.6 percentage points.
The less money of yours in the hands of bureaucrats, the better. And it’s not just because lawmakers suck — mightily suck — at creating jobs (“rich” people do that!); the less money in lawmakers’ hands mean you have more economic freedom. And that should always be celebrated.
There’s more. The Alternative Minimum Tax — a law originally enacted to ensure that certain income earners don’t avoid paying taxes through a web of loopholes — was also set to expire, subjecting a whopping 21 million households to higher taxes. That burden has been avoided, thanks to the “compromise.”
Taxes on capital gains and dividends are also left at 15 percent, good news for a stock market still recovering from the bloodbath of 2008.
Liberals will never get over their allegiance to burdensome taxation. It’s morbid. Literally. That’s why they’re in the business of taxing … death. Republicans successfully phased out over time the notion that a person’s assets can be taxed once he leaves this world — assets, keep in mind, that were already taxed over a lifetime. The compromise? Rather than have the confiscation rate go from 0 to 55 percent and hit all estates worth more than $1 million, the percentage goes to 35 percent, and the exemption now stands at $5 million.
That’s still high. Way too high. But remember, Democrats are in charge of Congress and the White House.
Almond Joys, a k a, not all chocolate is created equal. But it could be worse (Candy Corn. Shuddering).
The “compromise” maintains as existing law a package of tax extenders, including “tax credits” to certain people groups and sectors of the economy. Some of these credits have been law for years, and others were implemented in the TARP and Stimulus clusterfarks.
It’s important to understand that tax credits are not separate spending programs or earmarks, as some are saying. Tax credits use the tax code as a vehicle to favor particular industries, many of which are leftist fantasy projects. So, yes, voting for the bill leaves intact legislation that favors biodiesel and ethanol production as well as incentivizes manufacturers that develop “energy-efficient” new homes.
It’s an eco-princess’ wet dream!
There are other leftist schemes, including American Samoa economic development, deductions for goods made in Puerto Rico, and expensing for U.S. film and movie production.
The tax code shouldn’t be used by bureaucrats to pick winners and losers in the marketplace, and thus, many of these tax credits shouldn’t exist as law to begin with. But that’s a separate debate, one that we demand Republicans have when they control the House next Congress. For now, conservatives shouldn’t fall for the Left’s rhetoric that these credits—read: cuts—to particular industries amounts to a “cost.” It’s not. It’s letting employers keep more of their money. If the extenders aren’t passed, their taxes go up.
Candy Corn, a k a, the “treat” from Lucifer himself.
The biggest crap sandwich the GOP ate was agreeing to a one-year extension of unemployment benefits to the tune of $56 billion. The dollar amount isn’t the only issue; it’s the fact that this new crop of spending was not offset with cuts elsewhere. Surely, from a budget bursting in the trillions three times over, Democrats and Republicans could at least find cuts somewhere, anywhere to fund the proposed unemployment extensions?
And that’s where the GOP leadership failed in negotiations.
They should’ve demanded, in private and public, that any net spending increases must be met equally with spending cuts. We don’t have another $50-plus billion. We’re running deficits. Large, large deficits.
The only out-and-out spending in the “compromise” tax bill is the unemployment portions. Conservatives look at this capitulation and wonder how the GOP can successfully mount a move to reform entitlements — the real budget busters — if they can’t articulate spending cuts to counterbalance a brand-new spending initiative?
So there is that.
Bottom line: A moratorium on tax hikes, albeit temporary, is great news but not cause for jubilation. Taxes remain too high; regulations are still oppressive and are stunting job growth. And spending is at unseemly levels. The GOP’s “Pledge to America” reduces the burdens of taxes, regulations, and spending. In just a few weeks, they’ll have their chance to act on it.
We’ll be watching, fellas.