Wednesday, September 22, 2010

Doing Both - 1st, Tax Cuts for All

In order to reel in the budget, we can still support and encourage tax cuts for 100% of American's, but still allow the top bracket to return to its old level. All wage earners would still receive the extension of cuts up to the top bracket cut off of $250,000.

Now the Tea Party Republicans, and their 'in the pocket' media drones have tried to tell Americans that only 97% of wage earners would receive cuts. But that simply isn't true. EVERYONE will benefit from the extension all the way up to the upper teir break point. That is tax cuts for 100%. Former tax hawk and Federal Reserve chair Greenspan, disagrees:
"I don't think we have time to wait," Greenspan said. "Our choice is not between good and bad, it's between terrible and worse."

Greenspan said he feels so strongly about the issue that he is now in favor of raising taxes -- a position he could hardly have imagined earlier in the decade, when he famously came out in favor of former President George W. Bush's 2001 and 2003 plans to cut taxes.

Greenspan said all the Bush tax cuts should be allowed to lapse -- a position that conflicts with Republicans' desire to extend the cuts and the Obama administration's efforts to let them stand for those making less than $250,000 annually. He said he still believes taxes should be cut, as a general principle, but not at a time when the government is digging a deeper and deeper fiscal hole.
Greenspan is in that small group of people of the 'smarter than me' set, but in this case I believe he is simply wrong. The fragile economy would struggle with an across the board tax hike. But allowing the upper Tier to lapse would begin the stream of much needed revenue. And seriously, would someone making $500,000/yr really notice a $600 tax bump (ed - To be clear, $600 is the average tax bump for wager earners making between 250,001 and $500,000. The additional tax on a $250.001 is 3 pennies, the actually tax burden on a $500,000 is about $7,000, still a pittance at that level of income). They certainly wouldn't change any business decision based on that pittance.

But we can't do it with revenues alone, cuts need to be made. Unlike the State, who has a revenue problem, the federal Government has a spending problem. Tough choices need to be made. And since I'm not running for anything, yet, there are no sacred cows in my budget. We'll get back to that.


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