Friday, December 17, 2010

Bush Tax Cuts - Part VIII

Well the deed is done.  Here are the highlights:

Highlights of the $858 billion tax-cut package

Income taxes: Extends Bush-era tax rates at all income levels. Cost: $186.8 billion
Alternative Minimum Tax: 20 million middle-income households spared AMT. $136.7 billion
Itemized deductions: More generous for high-income households. $20.7 billion
Standard deduction: Higher for married couples. $18 billion
Extension of sales-tax deductions: Washington residents take note. $5.5 billion
Payroll tax: Lowers Social Security tax from 6.2 percent to 4.2 percent in 2011. $112 billion
Estate tax: 35 percent tax, over $5 million/individuals, $10 million/couples. $68.1 billion
Child tax credit: Expands who can claim $1,000 credit. $71.7 billion
Jobless benefits: Up to 99 weeks, through 2011. $56.5 billion
Source: Joint Committee on Taxation
(from The Seattle Times)

Rob Natelson wrote at Freedom's Front Line:

So Congress is now about to give us a deal that raises spending and adds to the deficit.  How can this happen?  It can happen because the Supreme Court has so expanded Congress’s spending power as to change the U.S. Constitution from a good constitution to a bad one.
Constitutions are rules for the political game.  Good rules translate the normal political process into generally good results.  Bad rules translate them into bad results.
If the courts were still enforcing the original Constitution’s limits on federal spending, this deal would have come out differently: Instead of Republicans winning tax cuts and Democrats getting spending increases (resulting in a higher deficit), the principal dealing would have been over whether to cut more or less spending, resulting in a lower deficit.
Maybe we need a constitutional amendment requiring a balanced budget?  From my understanding, the constitution requires a balanced budget over the long term.  Lately, all the government's deficit spending are emergency spending (as in the case of war.)  At any rate the next session of congress will be looking for cutting government spending.  Hmm, I wonder whether it will be military cutbacks or social programs on the chopping block...