I’ve posted on several occasions about the ethical issues surrounding Democratic Representative Charles Rangel, the former head of the House Ways and Means Committee — see here, here, and here. The House Ethics Committee has now announced that Rangel will be tried on ethics charges before the Committee. The bipartisan nature of the finding of “substantial reason to believe” that Rangel has violated ethics rules suggests that he has reason to be concerned.
I am glad to see that the Ethics Committee is showing that the ethics rules have some teeth. Let’s hope the trial actually goes forward and sheds some light on the unseemly practices that seem to be all-too-common in Congress.
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Posted in America, Politics, The Economy, tagged America, Ben Bernanke, Bush Tax Cuts, Democrats, economy, income taxes, Politics, President Bush, President Obama, Republicans, taxes, Treasury Secretary Timothy Geithner on July 23, 2010 |
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Beginning on January 1, 2011, the tax cuts enacted under President Bush will expire and significant tax increases — affecting Americans of different income brackets and many American businesses, and involving income taxes, estate taxes, capital gains taxes, and other forms of federal taxes — will automatically take effect as a result. The Springfield News-Sun has published a helpful chart showing the changes in income tax rates that will occur if the Bush tax cuts are not extended.
Now Republicans and some Democrats are raising questions about whether raising taxes in the midst of a recession makes much sense. The Obama Administration, through Treasury Secretary Timothy Geithner, says the tax cuts on the highest-income Americans should be allowed to expire, and they should pay an even larger portion of their income to the federal government. As the Springfield News-Sun chart indicates, higher earning Americans already pay a significantly higher percentage in income taxes to the federal government.
Treasury Secretary Geithner refers to the higher-income earners as “the most fortunate” — as if the income they earn was the result of dumb luck, rather than hard work, opening their own businesses, developing a successful new product, intelligent investment risk-taking, or other activities that are rewarded in a capitalist economy. That sort of bureaucratic attitude is infuriating, but typical. If you’ve never held a job in the private sector where your hard work is rewarded, you tend to think that being successful in business is the result of happenstance as opposed to thoughtful effort. That same attitude underlies the notion that, if the tax cuts expire, the highest-earning Americans will heedlessly continue to act as they have before and just pay more in taxes — as opposed to modifying their behavior in recognition of the fact that their hard work will put less money in their pocket.
In reality, of course, individuals and businesses do modify their behavior in response to tax rates. That is why so many Members of Congress, and Fed Chairman Ben Bernanke, think that extending the Bush tax cuts would be helpful for our struggling economy, and that ending those tax cuts could potentially shove the economy into a deeper recession. Americans will have less to spend, and therefore the consumer spending that is one of the foundations of our economy will be weaker. Businesses, too, may stay their hand on hiring or other activities because the tax burden is too great.
The battle over how to deal with the expiring tax cuts will be interesting, because it will play directly into the standard themes of the parties, with the Democrats saying that the Republican Party is interested only in business and the wealthiest Americans and Republicans saying that the Democratic Party is interested only in economic redistribution. In the meantime, Americans will again be caught in the middle, wondering whether they should expect a significantly higher tax bill come January — and how they should plan their affairs given the continuing uncertainty.
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Posted in America, Politics, The Economy, tagged America, Congress, Democrats, economy, Extended unemployment compensation, Politics, President Obama, Republicans, Unemployment compensation on July 23, 2010 |
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CBS News has an interesting take on the issue of who is playing politics on the extension of unemployment benefits for out of work Americans. It turns out that President Obama, in signing a prior extension bill, specifically noted that it was fully paid for and therefore fiscally responsible — which is all that Republicans were asking to be done in connection with this latest bill.
Every voter understands that there is a galling hypocrisy in political leaders of both parties. But does the games-playing have to be so flagrant and duplicitous? Given this kind of phony about-face, are the President’s advisors really scratching their heads about why his approval ratings are plummeting?
The new extension bill, by the way, adds $34 billion to the federal deficit.
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