Congressional Republicans stuck to their guns this week and managed to work a deal that kept the Bush tax cuts in place and even cut taxes a little bit more. That's good news for a lot of people. However, the deal wasn't without its problems. Jimmie Bise covers them rather well. Let's look at a couple of those points for a minute, starting with the extension to unemployment insurance. (Links removed)
Second, unemployment benefits will extend from 99 weeks to 112. That means that a person out of work can collect benefits for 2 years and 2 months. If you don’t think that matters, take a gander at the work done by Pro Publica. According to their research, 26 states are currently borrowing money to make unemployment insurance benefit payments because their trust funds are out of cash. Right now, states are borrowing more to pay people out of work than they have ever borrowed in the history of the country. As a result, states have had to slammed businesses with increased unemployment insurance premium rate hikes to either keep their trust funds solvent or to keep from borrowing even more money. Over the past two years, rates have gone up in Massachusetts, Colorado, Utah, Maine, Montana, Washington, Indiana, Tennessee, and Hawaii. That’s money that won’t go toward hiring new employees. How much worse will the situation get with an extra 13 weeks of benefits? Plenty worse. And if the crisis hasn’t hit your state, you had better bet that it will. There’s no way it won’t. Not now.
Colorado is already facing a billion dollar hole in the budget. The extended payments for UI isn't helping. Throw in potential tuition subsidies through one of the many flavors of DREAM acts in the Senate and Washington, DC is effectively killing Colorado's budget. They're talking of slashing education funding in the state because of the budget deficit but much of that spending is caused by changes to Federal programs that Colorado has to pay for.
I think it's time for Colorado to pull out of every Federal program that is not fully funded by the Federal government. If the Feds want any of those programs that badly, they can pay for them themselves.
There is a fourth problem I have with the deal, which involves the estate tax. Under this agreement, estates over $5 million will have to pay a rate of 35 percent. Now, this seems like a big win considering the Democrats wanted that rate to be 55 percent, but it’s not such a big win when you consider that the rate for 2010 was zero percent. The estate tax is a direct attack on your ability to pass along the fruits of your labor to whomever you choose when you die. It is a second tax, where the greedy trough-feeders in Washington get another chance to stick their snouts into what you have produced with your own sweat and blood long after you are dead. I do realize that $5 million is a fairly high thresh hold, but the wealthy do not lose their right to their property when they reach a certain level of wealth, no matter what the progressives say. Unfortunately, the GOP leadership believes otherwise.
It's kind of funny listening to liberals whine that Walmart kills mom and pop stores in small towns and then cheer a crushing tax that prevents mom and pop from passing their store on to their kids when they die. It's typical Leftist thinking. Businesses closing because of free markets is bad but businesses closing because of government is just fine.
I don't entirely agree with Jimmie when he says this isn't good for the economy. Are there problems with it? Yes, but I think letting the taxes go up would have been even worse. I'm gonna chalk this one up as a win. Not a decisive one, to be sure, but I'll take it and hope for better in the next session.
I do no know where you got information that unemployed beneftis will increase from 99 weeks to 113 weeks. That is false.
ReplyDeleteThere are approximately 150,000 who are currently collecting unemployment compensation at this time. As you can see, the President's plan will only help one-half of all unemployed workers in the long run; it won't help the long-term unemployed at all.
The UI extensions included in the President's compromise would cost $56b; that is 6.2% of the total price tag. That is what President Obama and the Republicans are willing to spend to help those who have suffered the most in this recession. Like many 99ers, I am absolutely stunned with President Obama's unwillingness to help 8 million unemployed, middle-class professionals who were once thriving and successfuly participating in this country's economy and the so-called 'American Dream'.
The provisions related to the estate tax in the President's 'compromise' are outlandish and provide NO economic return.
Conversely, according to the government's own economists, giving 8 million unemployed workers money which they will spend immediately, provides the absolute best ROI - return on investment; a fundamental theory of finance. Giving money to 8 million unemployed workers will create demand for goods and services; a fundamental theory of economic growth.
Put another way: rich dead people get more out of this deal than the long-term unemployed are getting. The long-term unemployed are getting nothing out of this deal.
Denver Unemployment Examiner
http://www.examiner.com/unemployment-in-denver/open-letter-to-my-congressional-representatives-senator-reid-and-speaker-pelosi
You are correct about the time. That came from the post I linked to.
ReplyDeletePerhaps Obama's unwillingness to support it comes from the fact that forcing business to pay for extended unemployment insurance rather than hiring hurts economic growth. A growing economy needs jobs, not welfare. That doesn't happen if you continue to pull money out of the economy.
You are absolutely wrong about who benefits from repealing the estate tax. The benefit is for the family of the deceased. Think of those family businesses and farms. Dad owns the business and dies. The family now has to pay a 55% on the business he left behind. At that point, they have to sell the business destroying all the work Dad did to build it up and they lose all the income that came from that business. You've now put them out on the street. And what happens to those employed by that small business. If they're lucky, they might still have a job. Or, perhaps, you would rather they live on the dole for 99 weeks.
Remember that wealth doesn't just appear out of nowhere. It was earned through hard work. In most cases, the one who earned it hoped to leave his children better off than he was. Apparently, that's now a punishable offense.