Thursday, August 19, 2010

Slow week

There is a remarkably informative graphic over at The Washington Post that highlights the differences in the 3 ways of dealing with the expiring tax cuts of 2001-2003.

The first tab show what happens to taxes if the tax cuts aren't extended. Clearly taxes will go up for everyone under this plan (which no one seems to be advocating) but the biggest hit will be on those making over $600k and over $2.7 million. One important side note that I don't think anyone has mentioned is that all budgetary forecasts that have been made assume these tax cuts will expire so the forecasts assume that the government is about to get a $3.7 trillion windfall in the coming years. To all of the "Deficit Hawks" out there it's important to note that reducing revenues by $3.7 trillion is going to have a pretty severe impact on that deficit you seem to be so worried about.

The second tab is President Obama's proposal. His proposal hits those making over $600k and over $2.7 million but leaves everyone else relatively unscathed. This soak the rich proposal plays to some of the Democrats base (I think you'd be surprise by the number of people making over $2.7 million/year that are Democrats) but it would cost the US Treasury $3 trillion in lost revenue.

The final tab is the Republican solution which is to leave everything as it is and extend the cuts for all taxpayers. This costs us $3.7 trillion in lost revenue.

So for all of the fighting you will hear coming out of Washington about the tax cuts keep in mind that the two plans are actually very similar. Both plans will cost us over $3 trillion and will not impact the majority of Americans. The only real difference is

* do you think people earning over $600k should pay another $53k in taxes?
* do you think people earning over $2.7 million should pay another $310k in taxes?

This is going to be a political hot potato in the fall, but I think it's important to know that for most Americans neither the Obama plan nor the Republican plan would affect their bottom line but both plans will add a subBoldstantial amount to our national debt over the next 10 years.

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There is clearly a risk that is run when a country strives to cut its spending -- See Greece. Greece has faded from the headlines, but life on the ground seems to be getting much worse for the average citizen.

"Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places."

70% unemployment?!?! Nothing to see here, move along folks....

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Ah, the joys of flying through Philadelphia. This story of how one woman was selected for additional screening by TSA because she was a) carrying a box cutter? b) lighting her shoe or c) had several checks made out to herself in her purse?

I think you know the answer before even clicking the link.

In a related air travel story, American Airlines is now charging a $19-39 fee for sitting in the first few rows of coach. Just file this away in your memory bank when the airlines come begging for another bailout in 2011.

* Triathlon Update - Again 8/29 is the day and the number of participants has swelled to over 100!! Thanks for signing up! Registration is still open for those of you sitting on the fence.

Cheers!

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