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  • Senate Bails Out the Rich Again

    The Washington Post reports:

    The Senate voted Wednesday to renew the government’s $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.

    Heritage fellow Ronald Utt explains why this is terrible public policy:

    Under the expiring law, the housing tax credit is available only to first-time homebuyers with annual household incomes no higher than $150,000 (for a married couple). Although an income of this magnitude puts the household comfortably within the top 20 percent of earners, census data show that the homeownership rate among households with incomes in excess of $100,000 is about 88 percent, meaning that few in this income class would qualify as first-time buyers.

    Senator Isakson’s proposal would make sure that the next government-subsidized rising tide lifts not just the little boats but the sleek yachts too, so he has proposed that the $8,000 housing tax credit be extended until June 2010 and that eligibility be expanded to include (1) households with incomes of up to $300,000 (for a married couple) and (2) those who already own a home.

    To put this in perspective, only 2 percent of American households earn more than $250,000, so this new subsidy would be available to all but a handful of the super wealthy. The Joint Tax Committee estimates that this tax credit extension will cost taxpayers almost $17 billion over the next five years.

    So why is the leftist majority in the Senate joining Isakson in bailing out the rich? Heritage’s Mike Franc explains:

    For the demographic reality is that, in America, the Democratic party is the new “party of the rich”. More and more Democrats represent areas with a high concentration of wealthy households. Using Internal Revenue Service data, the Heritage Foundation identified two categories of taxpayers — single filers with incomes of more than $100,000 and married filers with incomes of more than $200,000 — and combined them to discern where the wealthiest Americans live and who represents them.

    Democrats now control the majority of the nation’s wealthiest congressional jurisdictions. More than half of the wealthiest households are concentrated in the 18 states where Democrats control both Senate seats.

    Posted in Economics [slideshow_deploy]

    18 Responses to Senate Bails Out the Rich Again

    1. Leon, Durango, CO says:

      Economic competition, Obama style. That's where Obama's friends buy up everything with free money, from the government, from the Fed (0% is anti-capitalist and preferential (anti competative)). Oh, yeah. It is all illegal. If the Supreme Court won't hear your Case, that is new perfidy. But anyone who lost a house in the Democrat Party creation, the Community Redevelopment Act, ought to sue the government. You will never ever buy a house again, don't you realize? You should sue ACORN, Barney Franks, Fannie and Freddie, the Regulators, everybody you can think of, the Bank that sold your loan to Country Wide. The Community Redevelopment Act is Unconstitutional, but you victims have to file your case.

      These private payments are still illegal, the Supreme Court hasn't ruled, so the old laws have effect. Private payments of government to individuals are illegal, and result in the destruction of American property as well as liberty. Corruption has crept in, citizens have to get it out, bring the Case and make the Supreme Court listen (and fulfill their Oaths).

    2. Freedom of Speech TX says:

      Those who think there is nothing wrong with these "stimulus" programs should remember that taxpayers will have to pay for this.

      There is no free lunch.

      This is "chain mail" economics.

    3. Typical LibTard says:

      Where is my obama money?

      TL

    4. Leon, Durango, CO says:

      It should still be technically against the law for individual citizens to receive private payments from the government, on the theory (legal) existing untested Law is Unconstitutional (yet to be ruled).

      Get your Obama money from Obama. Sue him, not for his legal operations but his illegal operations. Nothing protects him in ILLEGAL acts, nobody in government is protected from their illegal (unconstitutional) acts.

      Sue Obama for ACORN. Sue him for Communist government takeover of your mortgage, your job, your income, your healthcare, your energy. Since all those things are Unconstitutional, Obama IS NOT PROTECTED. Government officials can be sued by name for their illegal actions.

    5. Roger S., Ma. says:

      "Freedom of Speech", I love your pun: "Chain mail economics".

      Gotta remember that one! Did you intend it?

      Knights coming to raid your property for the "protection-money".

      They scoop your dollar and throw back a dime. What an image!

      They expect you to be grateful, too, or else the club!

      Everyone taxing his neighbor on the right to "help" his neighbor on the left. Now if that ain't Marxism pure, what is?

      Even the top 2pct fit the image: they get to rule. "Nomenclatura", American style!

      Don't worry, though; with this model soon there will be nothing left to take, or give. We'll all be equal, then.

      Except for the "rulers".

      Happy serfdom to all!

      ("Leon, Durango": I'd like to believe you, but I'm afraid none of us will have the money to file suit, or pay the lawyers, or the accountants to "sort the books", they'll be so badly "over-cooked".)

    6. Nicolai Alatzas says:

      Lets put this into perspective:

      The Author states that this is another bailout of the super wealthy-

      Yet this Bailout is a FIRST time Home buyers tax credit.

      They are including the more of a buyer base buy increasing the income requirements.

      Ronald Utt stats that only 2% of American Household incomes exceed $250,000.

      This First time Home buyer tax Credit is being extended to $300,000 household incomes which means a very small % of Americans would be first time home buyers that make between $250,000-$300,000. In other words it would get substantially qualified homebuyers to get a mortgage.

      If your coming out of college and your making that kind of money. I can almost guarantee you have made a size able investment into your education and although you have done well for yourself your probably not rich yet. Why shouldn't all people be able to take advantage of the privileges that the poor in this country can. If your making this kind of money also you are also paying a lot more in taxes.

      We should applaud anyone that succeeds at this game we all know how difficult it is to get a ahead in this world. Instead of knocking their feet out from underneath them support their efforts and extend public policy to include all Americans.

      The Bottom line is we need qualified home buyers. If we can not get the upper middle class to invest in homes we fail to stop the crash in the market. We need good mortgages, We need to put a stop to lost equity in our homes.

      My Mothers home was appraised in 1995 at $140,000 dollars in 2006 she refinanced to do home improvements which increased the value to $450,000. After completion the home was put on the market just as the housing crisis began to unfold. Since then the value of the home has dropped over tremendously each month it is now on the market for $330,000. So over the past 3 years the house has drop about $40,000 annually. She also pays about $3,500 annually in property tax.

      How many more years is this going to happen for? If it continues to fall she will be left hold the bag for virtually 100's of thousands of dollars. My mother does well for herself working some 60 hours a week at a prenatal Nurse. But she won't be able to retire in 10 years if her home doesn't hold any equity. She could of rented a $4,000 a month condo and not lost as much money and not had to do any repairs or pay insurance or taxes on that home. This is not what we want our upper middle class doing we need them in homes!

      We need solutions and from what I can tell the First time home buyer tax credit should be extended to all people that would like to reinvest in America.

      I would love if this conversation could turn from conspiracy to a real think tank of people promoting solutions instead of crying foul.

    7. Lauren, New York says:

      1) It's a program to boost the housing market, not subsidize the poor into buying houses.

      2) 17B in taxes is going to be paid largely by those in the higher tax brackets, so why shouldn't be allowed to participate?

      They were first trying to sop up excess inventory so they were targeting first time buyers, but the issue with having low income caps is that they need to be able to get a mortgage. The other way to keep housing prices more stable is to make the market more liquid (increase turn over) so now they are targeting those who have been in their houses for 5 or more years. (Remember historically home owners move every 6-7 years, so they are simply targeting a historical turnover rate).

      On a side note, by keeping the income caps at 75, but having the house size cap at 800000, they would be hypocritical. Tell me the first time home buyer making 75 (or couple making 150) who has the credit history (cuz remember, they can't have a mortgage) to secure the loan for a 800000$ house.

    8. Lauren, New York says:

      btw, that was me agreeing with Nicholas but not realizing it because I was too lazy to read his entry until afterwards.

    9. Roger S., Ma. says:

      If the "cost of government" is a certain amount, and taxes are raised to cover it, then the giving of tax credits to some, for whatever reason, can only mean that some other(s) will have to make up the difference. That's you and me, you too,

      "Nicolai" and "Lauren"!

      That's why "Freedom of Speech" wrote of "chain mail economics", meaning either chain mail as in chain letter, or chain mail as worn by the medieval knight come to rob his peasant serfs! Either image applies, the one for financial reasons, the other on moral grounds! Don't believe me? Read on!

      With every chain letter, as you might know, only the first few links make out well. (If you actually bothered to do the math, you'd know why! Do it yourself, and be enlightened!)

      The moral argument is equally compelling: If the government wanted to actually improve our lot in life, it would keep the dime (its actual costs were it doing its proper job properly) and leave us the ninety cents, and not the other way around. You see, having earned it by our labor, that dollar was ours by right. In other words, if you want to be nice to your neighbor on the left, spend your own money, and only yours, and not the neighbor's on your right! (BTW, our Constitution tenders our federal government no right to redistribute either income or wealth. It is not among its enumerated powers.)

      That's why I raised the image of the knight scooping all you have (a dollar) while throwing back in your lap the measly pittance (a dime) needed to keep you alive so that you can "work" for him some more. A neat reversal of the "Robber Baron" image, isn't it? Read on, if you're still puzzled!

      In the 19th and early 20th centuries our great captains of industry raised the wealth of America and Americans to once upon a time unimaginable heights, only to be insulted as "Robber Barons". The tax-rates were virtually nil, zip! Then the government took over to bring us the graduated income tax, Fannie, Freddy, the FHA, and 8,000$ first time buyer credits to cover the unsecured loans (except by their neighbors) of people who haven't earned anything yet, and tax-rates approaching in the aggregate, or soon to be outright, the 50pct mark; plus the only true growth industry left, namely Government Bureaucracy. I'll leave you to figure who were/are the real "Robber Barons". (Just "entre nous", I think my posted image of the looting "knight" fits best!)

      Neither I nor our government was, is, or should be responsible for your financial choices and decisions, including buying your first (or any) house. Why should I help you or your mom, or you me? I need my money for my own projects, and frankly, I couldn't care less about yours! If you "overbought" your house hoping that because the government was inflating the housing bubble with "funny money" you could soon "flip it" with little extra effort on your part for a sizable chunk of the unearned, then the risk was yours and the "punishment" for your "irresponsible" act well deserved. Why should I cover it?!

      If you voted for people in government who would enable you to do that, why ask me to agree? Just come to my front door waving your gun and take what you think belongs to you anyway. Don't want to do that? Why not? I'm unarmed. Oh, you mean it wouldn't look good? You need me to agree, don't you? To make it look "legal", right? Less risky, too, right? Well, guess what: that "moral sanction" you need won't be coming from me!

      Not from me, although that's exactly what the government is trying to make me do by subsidizing first buyers in the hopes of re-inflating the bubble. That's exactly what the government did to cause the bubble in the first place via Fannie and Freddy and FHA and the Fed's loose money policy, as well as the ridiculous lending rules which forced reputable bankers to make loans to people whom they would normally have shown the door. I, who acted responsibly by not presuming on my overvalued (in the true sense of the word) property am now being forced to assist you who did. By what right? What have you ever done for me?!

      Not only is this voodoo economics (real things do have intrinsic real value which can't be faked without penalty), it's voodoo morals (ideas also have precise meanings precluding fraud) as well!

      You see, I don't need to "reinvest in America". Having stayed responsible, my "losses" were only "paper". I find no need to contribute to the subsidy of "your" housing market, being perfectly satisfied with the well-earned value of what I own. It took quite some time to earn it, so I never went for the "scams". Those who did, were looking for the unearned, with a little help from their Washington "friends". Why should I cover it? By what right?!

      So, "Nicolai", isn't that final statement of yours, that "(you) would love if this conversation could turn from conspiracy to a real think tank of people promoting solutions instead of crying foul" rather disingenuous, in retrospect, all things considered? Enough "conversation" for one day?

      - Because I can tell you this much: you, and "Lauren" for that matter, are a long distance removed from "think", though maybe not "tank"!

      - Because, you see, in this case the only acceptable solution is the "cry of foul", and then to make that stick!

      - Because, Conn Carroll is right! The exact percentage of "rich" or "poor", and their precise income levels, are irrelevant to this argument. Also irrelevant is the issue whether the whole boat is floated, or just the keel, or the mast, or the oars, or the poop or the forecastle. The violated principle of a proper government, namely to protect its citizens from force or fraud as opposed to itself actively participating in and even promoting both, is the crux of this issue.

      - Because, in sum, "social justice" however defined cannot be created by means of a more equal distribution of injustice! The last few years have been the proof!

    10. Bobbie Jay says:

      Oh… What we need is a government that has the respect to uphold their constitutional duty, without bias or discrimination of the American people.

      Plain and simple.

    11. Pingback: Always-Follow-The-Money… | The LALA Blog

    12. Nicolai Alatzas says:

      Lauren,

      Nicely put you summed up my book into a few lines.

      Thanks

    13. Nicolai Alatzas says:

      Roger,

      Although your analysis could be true for some government handouts it certainly is not the case here. Chain mail economics could be implied to subsidies and government programs that help people that are not returning the favor.

      However you are implying here that a person that mortgages a house with an income for the first time who makes $300,000 dollars will not pay back his own $8,000 dollars in taxes?

      The Math which you also implied I have not done will prove you wrong.

      If you make $300,000 in this country your pay about $99,000 in federal income tax. The $8,000 dollar tax incentive you got doesn't seem so wasteful anymore does it. If you only make $16,700 it will take you 4.79 years to repay your tax debt. And that doesn't include sales tax and property tax which you will also have to pay.

      The break even point for taxable income to paying for your first time home buyers tax credit in the first year is $33,950 for a single filer and $53,500 for married filing.

      2009 & 2008 Federal Income Tax Bracket

      | Married Couples |

      Tax 2009 tax 2008 tax

      Rate

      10% $16,700> $16,050>

      15% $16,700-$67,900 $16,050-$65,100

      25% $67,900-$137,050 $65,100-$131,450

      28% $137,050-$208,850 $131,450-$200,300

      33% $208,850-$372,950 $200,300-$357,700

      35% <$372,950 <$357,700

      | Most SingleFilers |

      2009 tax 2008 tax

      Tax

      Rate

      10% $8,350< $8,025<

      15% $8,350-$33,950 $8,025-$32,550

      25% $33,950-$82,250 $32,550-$78,850

      28% $82,250-$171,550 $78,850-$164,550

      33% $171,550-$372,950 $164,550-$357,700

      35% <$372,950 <$357,700

    14. Nicolai Alatzas says:

      Roger,

      You also seem to imply that I believe in Federal Income tax and that it is legal to tax wage. You couldn't be further from the truth. I would be in support of dropping Federal Income Tax all together.

      However given the current way things are run you either play by the system or get left in the dark. And anything that puts tax payer dollars back in their pocket I am all for.

    15. Roger S., Ma. says:

      Nicolai,

      Oh my, aren't you off the mark. It is apparent you haven't understood a thing from my earlier post(s)! Nor from any other of the comments here.

      The issue here (not only concerning my posts but I suspect at HF in general) is summed up in my opening paragraphs and in my closing sentences:

      "…The violated principle of a proper government, namely to protect its citizens from force or fraud as opposed to itself actively participating in and even promoting both, is the crux of this issue.

      - Because, in sum, “social justice” however defined cannot be created by means of a more equal distribution of injustice! The last few years have been the proof!"

      This is above all a moral issue leading to a legal issue with constitutional provisions concerning the federal government's powers to cause and control the redistribution of wealth and income. Although these do not actually exist, every attempt has been made in the past to ignore, obfuscate, or circumvent that fact! Unfortunately with such success, that we are now facing the greatest crisis since our founding. Conn's article, which we are here commenting, points to one of the top reasons: plain old-fashioned greed. Simple as that. The senators in charge of the public till (mostly Democrats) have apparently determined that except for the very rich who really don't need it, their new upper middle class "friends" should get a little extra "shot in the arm", especially if they're young and just starting out. Presumably those "smart new friends" will "remember" and vote for them, next election. All of which points to the real problem: our elected Reps have now arrived at a stage where they quite unashamedly and openly contrive to "buy" their next election in advance. The "in advance" makes unassailable what would otherwise rate them jail time. It's really rather gross, in case you asked!

      This coincides negatively with the FedGov's perennial interference in every aspect of individual life. Allegedly based upon the General Welfare Clause, the Interstate Commerce Clause, and their egregiously expansive interpretations for the purpose of funding the pet projects of our Reps' pet cronies at all of the voters' expense, it needs to be severely curtailed. It is not even an issue of whether these projects will ultimately be useful or beneficial to a majority of individuals. It is equally a non-issue whether the initial taking from one individual to support another will, within a given time-frame, be fully repaid by the latter. (You assert, I doubt!) Finally, it isn't even an issue whether somebody who is never likely to "pay back" is being subsidized directly.

      The real issue is that these gents are perennially robbing Peter to pay Paul in order to curry favor with Jane while controlling Jill and keeping an eye peeled for Judy. That there are costs even when everybody pays back the direct "largesse" (Peter gets his money back and Jane keeps coy while Jill stays meek and Judy comes and goes unnoticed) gets overlooked in the process. Ditto, that those costs are substantial.

      Worse, we both know that the "repayment" doesn't really ever happen: should it in defiance of all expectations, it is to the public till and not to its original owner. That guy never again sees the return of sums which he might well have spent more profitably than pre-funding some stranger's agenda or life-goals.

      Not to mention the huge Gov. overhead created to administer the whole mess. That part is definitely never returned to either the "borrower" or the "lender". Last, not least, that "overhead's" constant interference in the lives of both is a burden to all. (Unaccounted opportunity cost!) So we may readily appreciate how the argument of "repayment" must seem a poor one to the individual deprived however temporarily (were that it were so!) of his earnings and the resultant real control over his life which they would have afforded him, and which was both their original purpose and his just reward!

      Even were the 8K returned eventually to the original taxpayer, he would still be out the opportunity cost of his foregone consumption plus the cost of his risk incurred of never being repaid. It is customary to call that interest. By what right would that interest be any less than what the recipient would have had to pay his banker?! And if no different, why not petition the banker in the first place, instead of his "neighbor" via the government!?

      Moreover, if the borrower is obtaining an income sufficient to qualify for an "old fashioned" (non-sub-prime, 20-30pct down, 20-30yr adjustable/fixed) mortgage from a reputable banker (not Fannie or Freddy), why does he need "my" help?! On the other hand, if he does not qualify, how will your "tax-credit" funded by me improve things?

      All costs not directly borne by the recipient must be borne by all of us, meaning they will be ultimately funded by higher taxes, inflation, or the long-term public debt which constitutes future higher taxes or inflation. In every case a part of these costs, with interest, will have to be borne by those who did not incur them. This happens even if the borrower does not "default". If he does, say by not "attaining" the needed taxable income because he is very inept or very clever, the rest of us are stuck with all costs! Either way, our taxes (and/or inflation) increase the same as his, though without any benefit to us, or even with actual harm to us!

      For what?! Only to fund this crazy government brainchild whose true motive and purpose is to buy favor while asserting control of our lives!

      What I will now gladly rename your "sneaky little version of an economic perpetuum mobile" (which it isn't except to the very naive) remains just what I called it in the first place: "voodoo economics and voodoo morality".

      So, did you do your math? No, not really. You only "thought" you did by "socializing" individual opportunity costs while individualizing social benefits. As "Freedom of Speech" and I noted: a chain-letter backed by a knight in chain mail wielding a club is all it ever was, regardless of how you dressed it up!

      All you really did was to copy the Gov.'s math, limiting it to the case of the income tax covering the housing tax credit. Granted that this can be so construed. But, as I stated, if the government's proper function is to protect the citizen from force or fraud, and this protection costs a certain amount, then that is or should be the limit of taxation, leaving no room for a housing tax-credit, whether or not it is repaid, whether or not with interest, whether or not all costs properly accounted!

      Clearly, the government "tax-tables" you presented are premised on paying for many more things than these proper functions, among which are apparently the (you imply loans, I state emphatically grants, if only of the incurred administrative and opportunity costs) tax-credits for things which are none of the government's business! Well, isn't that cute! No wonder we do not have balanced budgets, but do have a huge national debt, and even more gigantic unfunded liabilities. With your kind of "thinking" going on for nearly now a century, that was inevitable.

      All of which brings me to your next-to-last comment: "You also seem to imply that I believe in Federal Income tax and that it is legal to tax wage. You couldn’t be further from the truth. I would be in support of dropping Federal Income Tax all together."

      Say again?! Where do I imply that? All I said is that taxes (didn't say which) are raised to cover the cost of government. Which is quite proper. To function properly, a government needs to be adequately funded. That means contributions by its citizens. Call them taxes — sales, excise, vat, income, property — or anything else, it makes no difference. Frankly, I have no idea which type you "believe in" or favor, and couldn't care less. I seem to recall that a Constitutional amendment ratified the Federal Income Tax. (16th A.?) So be it. So what?!

      We have entered an age where it is apparently necessary to have standing armed forces and a federal infrastructure to support them, as well as some other related things which could probably not be funded efficiently or effectively in any other way. Few, if any, citizens would quibble about "federal withholding tax" if it were properly used. It is the abuse of it to do all manner of things which are Constitutionally none of the Fed's business, like granting housing tax credits to individuals, subsidies to special interests, and so on, meanwhile almost to infinity, which ticks off so many people!

      The resulting disruption of private lives and distortion of free-market economics, let alone government corruption, is what tees people off to no end. And, that they are required to pay dearly for such "great favors" nobody really needs or wants. These days, you really never know what the Gov. will think of next to screw up your life's plans, which you will have to pay for without benefit, unless of course you belong to "the chosen few"!

      Not even Utilitarianism/Pragmatism's argument of "the greatest good for the greatest number/whatever seems to work" is acceptable in this context, if any. Had it been acceptable, then the rebels of 1776 would not have had much cause to oppose the Crown, now would they? Certainly King George III and the British Parliament could have brought to bear compelling evidence that the unquestioning obedience of its Colonial subjects was merely for the greater good of the whole Empire, themselves included. No, the issue then was the same as it is now: control and its limits. The founders of our august Republic were as fed up with their government's attempts to micromanage their lives at their expense for any, all, and sundry reasons good or not so good, as today's citizens are becoming.

      Which brings me to your last "point": "However given the current way things are run you either play by the system or get left in the dark. And anything that puts tax payer dollars back in their pocket I am all for."

      – Boy, am I glad you're such a friend of the taxpayer! What would I do without your "generous" advice and consent?!

      – Yes, Nicolai, even your slightly disingenuous "special pleading" will not convince me that you aren't a part of the problem, if not its very essence.

      – One of the reasons, if not the only reason, this country is in such trouble is that for nearly a century an increasing number of people have thought like you, saying in essence, "go with the flow".

      – Don't you understand that that's exactly how statists expect people to act while consolidating their power?! To wit:

      – "Do as I say, or I'll leave you in the dark with the bogey man"! : "Be smart, shut up and take your cut". : "Get back just a little tax now!" : Quit complaining, or we'll give it to your neighbor." : "Don't dump the tea-bags, make tea!" : "Give a little, get a little." : "Do it my way or the highway". Nanny state in action, with the club held behind its back, wouldn't you say?! Well, people are sick of it!

      – Do you realize who would be "vacationing" in the WH today, if the Founding Fathers had embraced the same attitude? No, not Queen Elisabeth; more likely Prince Charles and Camilla, that's who! Double Yuck! On the other hand ….

      Guess what: YOU play by this (crooked) system! The rest of us won't. (I've read enough posts since registering here 6 months ago to be fairly certain of speaking for more than just myself!) We'll be busy fixing it! And believe me or not, we'll manage quite nicely! Oh, BTW, nobody will be left in the dark, except maybe you!

    16. Nicolai Alatzas says:

      Robbing Peter to Pay Paul is not what is happening when someone that pays $90,000 dollars annually in taxes and gets an $8,000 break on their taxes.

      Any taxes paid should be returned to the people in the representable forms not used to fight for foreign control of resources or to politicize foreign Nations. Like the last administration who everyone in the administration had vested interest in almost every contractor used to fight our war on terror.

      If you want to stop the crooks demand that we give the people the ability to audit the Fed Reserve who is consistently robbing Peter to Pay Paul.

    17. Roger S., Ma. says:

      Oh yes, the Federal Reserve, quite right: they shouldn’t be there at all, and before they are “ditched”, they should be audited. But who will do that? Who will believe what that’s going to reveal? Who will fight over it? For how long?

      I think ditching the Fed should be one of the last items in the quest to return to some semblance of Constitutional sanity

      But yes, the Gov. IS robbing Peter to pay Paul. Don’t you understand that precisely THAT is the perversity of the Federal system(s) of “high finance”? (Don’t get me wrong: I don’t for one second begrudge you your tax-break!) Because, that “break” wouldn’t be needed if the Gov. were constitutionally “honest” across the board. Speaking figuratively, you’d only be paying 82K in the first place.

      Now think about this: You’re getting a break for your house. Somebody else one for his new jet. Still somebody else “Cash for his Clunker”. Somebody else again a write-off on, say, life-saving surgery. Yet somebody else for his new church….it never ends! Care to figure, I’m sorry: guess — nobody can figure that stuff any longer — how much of your remaining 82K would still be yours if it didn’t have to cover for parts of these other write-offs? 10K, 20K, 50K?

      Then come the administrative costs. Even if each one of the entities receiving a break today ends up paying it back in the next five years from the increased revenue the object causing his break has allowed him to generate in taxable income, we’re still not even. For five years a horde of tax-technicians at the IRS has had to watch over this, fill out forms, program computers, send notices, read notices, read your returns, check your checks, eat, drink, sleep and be merry.

      Then the interest: If you were paying more than your 8K break to fund others’ multi-K break, the difference is missing from your account. Depending on how much it actually is, you could have bought a new car, a new deck, taken a vacation, saved it, invested it, any number of things. And make no mistake. These sums are likely substantial. Worse, in spite of that, they’re insufficient, so the Gov. goes out and borrows. In the economic aggregate, your missing interest (and principal) gets added to the borrowing and its interest.

      So, is your money now at least helping your government? Oh no, it’s — not even in the government till. Remember, it went for somebody else’ break. That’s where it is now. Let’s say it went into the Cash for Clunkers program. Somebody got 4.500. But we’re not done. Each wrecked clunker actually cost you the taxpayer 24.5K.So neither the principal nor the interest is doing either you or the government any good, but some other “breakee”, and the government employees watching over all of us. Is that what you thought you wrote your check to the IRS for? I hope not.

      It’s as I said: they’re robbing Peter to pay Paul; yes, and when they’re done with that they’ll rob Paul to pay Jane, and her to pay Susan, and Jill and Jack and Jim and Deedee. And each time the money changes hands, someone in government is taking his or her cut, literally or figuratively. Bank on it!

      And all for political ends, like who gets elected next because he got the “right” local projects funded and somebody’s grateful. Who can get a project funded to protect the Pacific Minnow while bankrupting San Fernando valley farmers. (Who cares about them anyway? The Minnow’s more important, and anyway, what have these silly lettuce or grape growers ever done for the great guru of the future environment temporarily residing in the Capital?) That’s the crazy stuff your 90K for the most part funds while somebody else is funding your 8K rebate! Sorry, but I get hopping mad when I consider this madness. It’s actually worse than Peter/Paul. Actually, every body is being robbed to pay every body. The only beneficiaries are those designing and managing the “robberies” and some of their very select buddies.

      No, don’t fall for the Bush-bashing. For all his real mistakes, beginning 2006 he was also hit with a Dem. Congress which really got the fiscal insanity up to speed. In some sense, he was only a symptom. And Obama is far from sainthood, regardless of the pronouncements of a few nutty Norwegians trying to incentivize him into leading America into oblivion. This problem started in earnest under Woodrow Wilson in the teen years of the last century. Don’t be fooled. The BHO administration is as full of people with vested interests in all kinds of crazy schemes as W’s was.

      And, that these would appear to be less martial is no comfort at all. There are some really nasty types out and about in the world since long before Bush, or even Carter, who really mean to do us in should we give them a chance. Nothing wrong to keep them thinking for as long as we can that we’ll gladly cream them for breakfast should they give us so much as a dirty look. Much better in fact than trying to make them think that we only want to be friends with them. That they don’t believe anyway, and never did.

      A strong national defense is one of the few powers the Constitution actually grants to Federal Government. May they learn to use it to our advantage! Before it’s, once again, too late!

    18. Nicolai Alatzas says:

      I concur.

      However under the way things are managed and hands dealt do your best to make a difference.

      Think of yourself as a self Appointed Robin Hood of tax incentives.

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