David Maymudes: ‘I think people are letting W. off too easily by letting him talk so much about the tax reduction you get if you have two kids and exactly the right income level. If you make $30,000 instead of $40,000, with two kids you already basically pay no income taxes, so you get nothing. More importantly, why let him ignore the 7.65% Social Security and Medicare tax? That $40,000 couple is paying $3060 in Social Security taxes. So, yes, they’re getting a tax cut from $4000 to $3000, but it doesn’t sound as impressive that way. (And the $30,000 couple is still paying $2300 with no cut.) Dick Cheney’s $327,000 annual tax savings still sounds pretty impressive, though.’
Jeremy Bronson: ‘I agree with your position on the tax cut, but I wonder whether you’re guilty of the same type of misleading rhetoric as the President when you say the $500B deficit this year will result in $5,000 of additional debt per household. In all candor, don’t the same people who enjoy the benefits of the tax cuts – and who (including their progeny via the estate tax cuts) are gaining an even greater share of the nation’s wealth through the GOP’s policies – end up with the vast majority of the associated long-term tax burden?’
☞ Yes and no. Say I’m childless (well, I am) and that I save $327,000 each of the next three years (well, I wish), and then I die and leave my money to charity (well, I might). OK. Neither I nor my kids bear any of the burden of the extra $500 billion a year in debt – everyone else’s kids and grandkids do.
Yes, rich people will pay more to service it . . . but the poor will pay by virtue of its squeezing out the investment we could otherwise have made in health care and education. No?
And if the huge deficits weaken the dollar, as they will, driving up the price of imports, who is worst hurt by that?
And if it raises interest rates on car loans and mortgage loans, who is worst hurt by that? Rich people don’t borrow, if they don’t want to – they lend.
So I think borrowing hundreds of billions of dollars to lower the tax burden on the wealthy is pretty much what it appears: saddling all of us with debt, while showering most of the rewards on just a very privileged few who least need the largesse.
It is a HUGE economic and social mistake, but the President either doesn’t realize that or doesn’t care.
Quote of the Day
Market economics as currently practiced often ... includes only what's countable, not what counts.~Rocky Mountain Institute
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