Monday, December 6, 2010

First Thoughts on Tax Deal

I really liked the President's tie. Nice use of the blue and grey for us Georgetown guys. That is the good news.

Beyond that;

The extension of the 35% tax rate for upper income for two years is just bad policy. It continues exploding the deficit which continues the pressure to cut Social Security and Medicare benefits for working class retirees. We get to have the discussion again in a year to two years during the height of the presidential campaign.

The two percent payroll tax reduction is nice for working class Americans but still offers more money for the upper income group on their first $106,800. It will be somewhat stimulative, but not as much as a jobs program.

The inheritance tax "compromise" is outrageous. It is a two year fix, then we need to do that all over again.

The continuation of other tax cuts for working familiies such as the EITC, child care tax credit and the American Opportunity Tax Credit (education expenses) are helpful.

Finally, extended Unemployment Insurance benefits will continue for another 13 months. As some have pointed out...why 13 months for UI but two years for the upper income rates and inheritance tax?

More tomorrow once details are released.

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