There has been a lot of discussion from both sides of the political spectrum as to what the new tax plan will cost and whether it is stimulus. First off the total bill, as it stands now, would cost $860Billion, roughly the same as the 2009 Stimulus Package (approximately 30% was in the form of tax cuts). I have heard leftwing commentators call it the $900Billion tax break for the rich…wrong! Conversely, I have heard the right wing commentators call the tax cuts the best way to create new jobs…wrong! Here’s what we know:
1. Two year extension of Bush Tax cuts for those <$250k: $463 Billion
2. Two year extension of Bush Tax cuts for those >$250k: $82Billion
3. Unemployment Benefits: $56 Billion
4. Social Security Tax Break: $112 Billion
5. Individual tax Credits: $8 Billion
6. Business tax Breaks: $69 Billion
7. Estate Tax Breaks: $68 Billion
8. Watching how the Republican caucus deals with its deficit hawk Tea Partiers: Priceless
If the Bush tax cuts, all $545 Billion, are job creators, then why haven’t we created jobs over the last 10 years? The CBO states extending unemployment benefits is the most stimulative based on the 2:1 ‘trickle around’ ratio. So this package is the continuation of the great American giveaway, first Wall Street and now Main Street. Once again we are being told we cannot afford NOT to do this, but just how CAN we afford to do this? Economists warn us to beware the double dip recession. Spend your windfalls America, we’ll worry about the debt later.
That being said, I would have supported items 1 and 3 above at a cost of $519 Billion. The costs would have been offset by letting #1 above expire and returning the Estate Tax to pre 2010 levels. Further cuts in discretionary spending could make up the difference and allow this package to be paid for.
Finally: Republicans campaigned they would eradicate our debt, the Republican symbol is an elephant, elephants never forget, ahhhh what was that about the deficit again?