Monday, December 06, 2010

I might be unemployed but I’m not getting taxed. Thanks, I think?

Apparently, the Republicans and Democrats are close to a deal for extending Tax Cuts and Unemployment Benefits. A few months ago the debate was strictly about tax cuts so how did we get to this point? And who was involved in this deal? Or was the Obama Administration working backroom deals again?

Republicans don’t want the Bush-era tax cuts to end for all citizens. They especially don’t want them to end for small business owners who would be penalized by higher taxes. If the tax cuts expire, they will increase to higher levels. Republicans feel with higher taxes, business owners would not hire people or create new jobs. But what constitutes as a small business?? Some small businesses have multi-billion dollar revenues. They only classify themselves as small businesses in order to enjoy great tax benefits.

The Democrats want tax cuts permanently extend for all but the highest earners. If they don’t extend, the middle class will have to deal with a tax hike. And the middle class is already dwindling as we speak. Democrats want tax reductions that would benefit everyone making less than $250,000. Most people I know are scratching their heads trying to figure out when did $250,000 become a middle class salary? If $250,000 is a middle class salary, then I should be on welfare and living in the projects.

So what does unemployment benefits have to do with any of this? Apparently at the end of the year, they are set to end as well. And the Republicans were not going to sign off on them. They felt that the benefits were another thing that would increases the deficit. Probably, but aren’t tax cuts going to increase the deficit? So the two issues were somehow combined into one measure and that is how we got to this point.

So how long should tax cut extensions last? A one-year extension would put us right back where we are a year from now. A two-year extension would be revived again during the 2012 campaign. A three-year/four-year/five-year extension would be some other presidents’ problem.

Democratic constituents back home must be confused about what is going on in the District of Columbia. Republican senators and moderate Democrats blocked liberal Democrats from cutting tax rates on high income levels. I keep saying these “Blue Dog” Democrats are going to be the death of the Democratic Party. Even though the Republicans were able to do this, they still don’t have enough votes to extend tax rates permanently. So if it’s a stalemate, does that automatically mean you should compromise? President Obama doesn’t have his back up against the wall (i.e. held up at gunpoint). So why not call the Republicans bluff?? Is it because Obama doesn’t have the confidence that it will work out in his favor? He has proven before that he can be easily punked (please don’t ask me to name an instance because there are too many – but just to throw out some - British Petroleum and Shirley Sherrod)!!!

I didn’t major in finance and I don’t know anything about balancing a budget (À la Congress Charlie Rangel). I can balance my check book and the last time I looked I didn’t see an increase in salary. The problem middle class people have (if we are still being called that) is that everyone else is getting over but us. Many people were previously unemployed because of illegal actions by corporations. Many people are currently unemployed because corporations are trying to get them off their year-end books. Yet the people who run these corporations are about to receive a tax cut while their former employees fight for unemployment benefits!! If we are going to reduce the deficit, we have to make hard decisions. We can’t keep cutting taxes! I even hate saying it myself but fiscally it doesn’t make sense. What does make sense is to do SOMETHING that is going to create job growth. After this debate, the next one better be about how to create jobs. This two party system is getting real old. If the current parties can’t figure out how to decrease the deficit and create jobs, we will need a 3rd party who can.

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