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Barry's boondoggle to include $310 billion in tax cuts
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The economic bailout being planned by Obama and congressional Democrats will include as much as $310 billion in tax cuts to individuals and businesses> The tax cuts are designed to gain Republican support for Obama's boondoggle which is expected to cost nearly $800 billion:
The largest piece of the overall tax relief would involve cuts for people who pay income taxes or who claim the earned-income credit. It would serve as a down payment on the "Making Work Pay" proposal Mr. Obama outlined during his election campaign, providing a credit to offset Social Security and Medicare payroll taxes of $500 per individual or $1,000 per family.
On the campaign trail, Mr. Obama said he would phase out a similar tax-credit proposal at around $200,000 per household, but aides said they haven't settled on an income cap for the latest proposal. This part of the plan is similar to a bipartisan initiative launched in early 2008, which sent out checks worth $131 billion.
As for the business tax package, a key provision would allow companies to write off huge losses incurred last year, as well as any losses from 2009, to retroactively reduce tax bills dating back five years. In effect, this would entitle companies to receive cash from the government that they otherwise couldn't have claimed.
A second provision would entice firms to plow that money back into new investment. The investment write-offs would be retroactive to expenditures made as of Jan. 1, 2009, to ensure that companies don't sit on their money until after Congress passes the measure.
A separate element would offer a one-year tax credit for companies that make new hires or reverse layoffs, which could be worth $40 billion to $50 billion. And the Obama plan also would allow small businesses to write off a broad range expenditures worth up to $250 million in 2009 and 2010. Currently, the limit is $175 million.
While tax cuts are preferable to increased spending, inclusion of tax cuts in this boondoggle does not justify giving Obama a huge blank check. As Senate Minority Leader Mitch McConnell said, "every dollar needs to be spent wisely and not wasted in the rush to get it spent":
Citing Obama's promise to eliminate waste by scrutinizing the federal budget "line by line," McConnell said Republicans want to do the same thing to the stimulus bill, "page by page, line by line - eliminating those programs we don't need, and insisting that those we do operate in a sensible cost-effective way."
McConnell's House counterpart, Representative John Boehner of Ohio, said it is "essential that this legislation be debated in a fair, open, and honest way." Congress, he said in a statement, should have public hearings, post any bill online, and must eliminate "special-interest earmarks."
We have thrown away enough money in Washington's panicked attempts to control this economic downturn. Too bad our "leaders" didn't learn the lesson of the collapse of communism -- governments don't do a good job when trying to control economic activity.
