Rachael Maddow of MSNBC was poignant Tuesday night when she pointed out it takes the Christmas holiday break for Senators to get their act together. Not to pass pressing legislation for Americans. But to get their butts home by Christmas Day.
The Senate voted 81-19 Wednesday a compromised tax bill. What took them so long? It could have been accomplished before the Nov. 2 midterms. But, nooooo.
It does answer the question why Congress approval ratings are so lousy. Their ratings are so low you would think the only ones voting in favor of them were themselves, family, lobbyists and the one remaining friend who places loyalty over poverty.
Of course, if I were a Senator and voted to raise the federal budget deficit another $858 billion on top of the $1.4 trillion already outstanding, I would become the family skunk, or as my mother from Tennessee would say, the family’s black sheep.
The measure now goes to the House where some conservative Republicans and Blue Dog Democrats will pull a Ron Paul and vote against it knowing full well the thing will pass exactly as force fed to them by the procrastinating Senators.
Is this new law going to be good for the average American? The answer to that is as clear as how well the health reform act plays out. Despite your political bias, no one can say with certainty.
I suspect President Obama is betting that in two years the law will help stimulate job growth and that in itself is a political nightmare. The Republicans will take credit for it in that scenario.
My mind is awash in economic data. By extending all Bush tax cuts for two years, there is a suspicion some Obama programs will not offset others in tax relief amounting in a small federal and state income tax increase by the April 15 deadlines in 2011 and 2012 for many low and middle income wage earners.
Another factor no ones talks about is the property tax burden assessed on homeowners at the local level. Areas hard hit by the housing market collapse and ongoing commercial real estate free fall might pay less property taxes if their ownerships were reappraised and the municipalities did not raise the rates of assessment. If, if, if.
I am not a died in the wool redistribution of wealth advocate. I do agree with Warren Buffett who points out he pays a lower tax rate than his secretary. That’s insane. The IRS Code must be overhauled but the elected politicians do not have the will. So, that’s a wash.
In the short term, the 2% decrease in the payroll tax which funds Social Security may free up spending from consumers and the one-year 100% depreciation on business expansion may help.
At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $10 million of a couple’s estate could pass to heirs without taxation. The balance would be subject to a 35% rate.
I have never understood the estate tax. For one thing, those in that position of wealth can afford estate planning and avoid paying the bulk of those taxes. Furthermore, the death tax is a tax on wealth that has been taxed multiple times before mom or pop died. That turnip has been squeezed dry, folks.
We can all snooze for two years and see this 2-year-old extension of the Bush tax cuts play out once again exactly as it did in the lame duck session of the 110th Congress.
The difference is the players will be more Republican and the biggest lame duck of them all could be the President of the United States.
At that point the can will be kicked off the cliff and the less tax and limited government folks will have to put up or shut up.
If I were Nostradamus, I would predict that recipe to recover this recession is subject to too many variables to succeed unless there is a remarkable upsurge in the housing and commercial markets and investors place their earnings on tangible job growth and not on paper derivatives.
(Cartoon by Bennett, Chattanooga Times Free Press courtesy of about.com)