Patrick's Rants



1/26/2008

Hurry Up and Die

Filed under: Politics,Sensible Tax Reform — site admin @ 1:02 pm

According to recent reports, Bush wants to send checks to people who are barely scraping by so that they can buy another tank of gas and continue supporting Cheney’s retirement plan (more on the cuts). He wants his tax cuts to become “permanent” even though his own Fed Chairman said that it would do nothing to curb the current problems. Tax cuts set to expire in 2010 will do nothing to help the economy today. In other words changing how something is to be taxed two years from now won’t help you make next month’s mortgage payment if your rate got “pimped”


A temporary moratorium on foreclosures such as what Hillary is suggesting, or a rate freeze on the subprime loans for oh, let’s say ten years would probably help things out. You know when you rape and pillage like the mortgage lenders did you end up with more oversight so a government intervention is very likely. Keeping people in their homes will do a lot towards keeping the economy from completely tanking. Being distracted by losing your home and having to move tends to have negative effects on your job too. And when the house next to you is all boarded up and owned by the bank you are less likely to keep up your home and are even less able to sell your home.

The title of this post is “Hurry up and die” because in 2010 the gift and estate tax expires but in 2011 it’s reinstated at the 2000 level. This is the cup game that Bush played when passing these tax cuts. He doesn’t have to face the wrath of voters because he’s going to be gone; and he didn’t have to list the true “cost” of his tax cuts, since he only had to count the tax cuts through 2010.

Here’s a tax cut idea. It’s simple. Keep the estate tax, raise the tax free portion to somewhere around $5 million or so, adjusted for inflation. Get rid of the idea that small farms should have a different exemption; instead let them set up Crummy trusts (which they already have or know about) and quit whining that they are being picked on. Adjust the rate that you pay on the estate to match whatever you pay for dividends and capital gains – something like 20% max. But then, treat people who plan their own retirement with IRAs and other tax deferred investments the same as dividends. When Warren Buffet pays less on his straight income (tax rate wise) than you do on your retirement plan something is wrong, and that’s the way Bush wants to keep it.

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