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  • Holiday Treat for the Bush Tax Cuts?

    Maybe it’s the holiday season, but if the reports are true President Obama and congressional Republicans have reached a compromise on extending the Bush tax cuts that gives taxpayers and the economy a wondrous gift.

    While details are sketchy and ever-so-important, President Obama announced he has agreed to extend all the Bush tax cuts for two years, through 2012. The necessity of economic growth trumped the ideology of redistributionism, though the President did take plenty of jabs at the wealthiest Americans. The compromise also includes the unfortunate resurrection of the death tax, but at a less punishing rate of 35 percent combined with a $5 million exemption. Two things to remember as the debate turns over to Congress: keeping current tax policy is not a tax cut, it’s preventing a tax hike, and would let all Americans keep more of their own money. Since this isn’t a tax cut, it doesn’t need to be “paid” for. The unfortunate part of this compromise is that it is not a permanent extension which would have been far better for the economy.

    In exchange, the President got a 13 month extension of Unemployment Insurance benefits — without having to offset the cost – as well as a temporary 2 percentage point reduction in the payroll tax in lieu of an extension of Obama’s ghastly “Make-Work-Pay” tax credit left over from the failed stimulus bill. Other important issues such as the extension of the AMT patch may also be included in the deal, but that is unclear. A few more targeted tax cuts were included such as immediate expensing for business investment – a sound policy that should also be made permanent.

    If the details bear out, this is a compromise worth embracing. It now falls to Senate Majority Leader Harry Reid and Speaker Nancy Pelosi to decide whether they follow their President’s lead or go their own way, leaving taxpayers a tax hike chunk of coal for the new year.

    Enough already of the job killing tax agenda. It’s time to do the right thing for the taxpayers and for the economy. In President’s words: it’s time to speed up the recovery and get people back to work.

    Co-authored by J.D. Foster.

    Posted in Economics [slideshow_deploy]

    17 Responses to Holiday Treat for the Bush Tax Cuts?

    1. a Duoist, UNR says:

      How can any 'conservative' permit the Estate Tax catch their accumulated wealth? Why would any conservative die wealthy, except in cases of unexpected sudden death? The federal government should never be able to count on revenues from an Estate Tax, because the philosophy which guides wealth accumulation–freedom–is also the philosophy which also suggests that unearned inherited wealth is just as pernicious as unearned inherited power.

      The wealthy can hoard their money into their graves, but that is unseemly. Instead, donate it away, perhaps for a favorite worthy cause. And never, but never, give to relatives, or leave it for the Estate Tax.

    2. Eric, Atlanta says:

      I would have to disagree that the "Make Work Pay" tax credit was ghastly – a tax reduction is a tax reduction, regardless of which party creates it. That said, it looks like Obama may have gotten the message from the election and is backing down on his class-warfare rhetoric about not giving tax cuts to the millionaires and billionaires. Let's hope he continues to work with Republicans instead of ramming bills like ObamaCare through Congress in defiance of the majority of Americans' views.

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    4. Pingback: The GOP’s Tax Deal Isn’t a Very Good Deal for Us or the Economy

    5. George Colgrove, VA says:

      OK, so we are being allowed to keep our tax cuts – thank you federal government. I thought that money was mine anyways.

      However, we are going to spend ourselves into oblivion with the unemployment extensions and plunge ourselves deeper into debt.

      Therefore, the conclusion here is, the federal government has only approved the notion we stay at the same high tax rates imposed on us by the Bush admin – which also allows over 40% of the population to continue not paying taxes. We are ignoring the 40+ taxes and fees imposed on us by the Obama administration. Moreover, we are going to go into debt paying people to stay home.

      This was not progress – this smells like business as usual.

      To all true conservatives and tea party members, take a hard look at what republicans are faltering here. We need to keep a list. These republicans (RINO's) are to be the first to go. If Obama is happy with this – it is obviously bad for the country.

    6. Gary says:

      I'm tired of the press going after the "so call rich", don't they understand taking more money from the rich actually hurts the middle class. The following is example that shows what happens when you go after the rich; Carter passed a yacht tax during his administration basically saying lets tax more of the wealthy people's cash for more liberal spending programs. What the carter administration didn't realize was in Florida over 500,000 people made their living building yachts for the rich; once this tax was enacted the rich went overseas to get their yachts made and 500,000 middle class people lost their jobs and businesses. Reagan repealed this tax but very few of the jobs came back. We must start educating Americans no one ever got a job from a poor person, it is the wealthy who create private sector jobs and those jobs produce wealth.

    7. Lo, Florida says:

      I'm glad they extended the unemployment, honestly. I would want the help if I needed it. With that said, it should have been with strings attached. Somehow people who are turning down work because they make more on unemployment need to be weeded out from those who are actually looking and not getting responses. Like, I think that employers who are interviewing should send a letter to applicants that are no longer being considered for a job. In other words, people should have to prove they didn't turn down an honest paying job because they make more sitting on their tush at home.

      As for the tax rate extentions, I loved how Mr. Obama tried to make himself look like Mighty Mouse. As though he was coming in to save the middle class day from a tax hike all the while defending himself to the crazy left wing loons by bashing job creators and top tax payers.

    8. Lloyd Scallan (New O says:

      a Duoist – Whatever a "wealthy" person does with his money, either before or

      after his death, is his decision, not yours nor the governments. If that person want to donate it all to charity or to a relative, or be dumped in the grave with his remains, it's his freedom to do so. That's what freedom is all about..

      As for Obama's "compromise", he is again playing the Republicans like a cheep

      fiddle. He got just what he wanted to boost his chances in 2012. The RINOS will

      never learn. You do not "compromise with someone that has no honor.

    9. David, North Carolin says:

      The Estate Tax will probably never go away. With proper planning there are tools to avoid the unnecessary taxation of such. Many wealthy democrats are fully aware of these tools and live via trust benefits (which are not included in the Estate and therefore not subject to the tax). The Estate tax makes up less than 5% of the total tax revenue. Why is it in place? It is a redistribution of wealth tool imposed in the early 1900's. Yes, the Bush tax cuts temporarily eliminated the estate tax, however, for the first time in history, the individual was limited to the step-up in basis for property transferred to a surviving spouse. This was a provision for 2010 only, set to expire in 2011with the re-introduction of the Estate tax. The step-up limitation will have a much greater impact on taxes in 2010 than the Estate tax would have.

    10. Chris says:

      Just pass the Fair Tax Plan HR-25 and place America as "The Tax Haven Of The World" See fairtax.org for all the details and educate yourselves, because only a flamming foool would argue against keeping all of their own money and their own monatary self preservation!

    11. Bill - Texas says:

      Wondrous? The existing income tax rates are extended for two years–essentially no change–but we have to go through this drill again in two years. There is an increase in inheritance tax on estates over $5 million. Even though we have spent and are spending more than we have, thereby increasing the annual budget deficit, this plan will increase spending and subsidize non-work by extending unemployment benefits. Why not subsidize work — if you want more of it — with tax cuts?

    12. Bennet Cecil Louisvi says:

      I do not like any meetings between the president and the republican leadership. The action should take place on the floor of the congress not behind closed doors. Let each proposal be voted on as a bill there. The Republicans should just let the tax rates go up if they do not get everything that they want. Call them the Clinton-Obama tax rates. Let the economy continue to contract as it must. The new congress can pass a flat tax in the house. The American people should choose between socialism and capitalism. Why should the capitalists bail out the socialists? Let the democrat party shrink to only the socialists as the unemployment rate goes to 12% in 2011. Moderate democrats should become republicans. The conservative republicans should force their leadership to shrink the federal government until it consumes no more than 17-18% of GDP.

    13. Vince De Stigter says:

      We left a perfect opportunity to have Obamacare halted in its tracks. We should have used this also to negociate.

    14. Kevin H, college par says:

      'a temporary 2 percentage point reduction in the payroll tax in lieu of an extension of Obama’s ghastly “Make-Work-Pay” tax credit left over from the failed stimulus bill'

      What a pathetic line. Only someone who supports extending the upper income cuts would call the stimulus a failure. More jobs have been created – and more private sector jobs have been created since the stimulus was enacted – than under the 8 years of President Bush. Do you dispute that fact? You can't – because it's fact.

      Yet somehow, 11 straight months of adding private sector job (when we were losing more than 700,000 a mnth under Bush) – and you call it a failure. Double digit percent increase in consumer spending from last year – double digit increases in automotive purchases from last year – DOW has increased 80% since passage of stimulus – yet this person calls it a failure.

      Yet she wants to extend the least stimulative provision out there (upper income cuts) that adds the most to the deficit? Your thinking and your ecnomics is a failure.

      Only a foxnews style biased author would call a tax cut done by the Dems ghastly.

      Absolutely pathetic.

    15. Leon Lundquist, Dura says:

      The Death Tax is a business killer, it forces businesses to go under when somebody dies. But this thing is Class Warfare, like millionaires are less equal than other Americans. The Obama tax hikes are called "Bush tax cuts" and the gurge is rising in my throat as Obama says Republicans are 'hostage takers!' The only rational thing for Republicans to do is send the Demolition Plutocrats home with nothing at all in the Lame Duck! The President lying constantly on National TV is worthy of Joseph Stalin, perhaps, but I am not amused!

      We the People are the Sovereigns Obama has sworn loyalty to! Even the moratorium on Payroll Tax is defunding Unemployment at the same time you increase enrollment! Where have we seen that before? Wasn't that how they destroyed the solvency of Social Security? This is a criminal Government and the House Of Representatives is about to be an accessory to the greatest crime in History! Don't give Obama anything in the Lame Duck.

      If the New House needs to extend the Bush Tax Cuts? They can do it in January and make it start Jan 1. It is clear to me Obama is going to use his new Unconstitutional Powers in his Shadow Government (The Obama Administration and his Czars) to bring America Down according to plan. Break our Hearts, that's the HEART part. Investigate them!

    16. Pingback: Today in Washington - December 7, 2010 | RedState

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