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TODAY'S QUESTION: What do you think of the tax-cut deal?

Monday, December 20, 2010 | 10:48 a.m. CST

President Barack Obama signed an $858 billion tax cut measure into law Friday. The measure, a compromise between Republicans and Democrats, extends the Bush-era tax cuts for all income levels, including the nation's wealthiest Americans. 

The deal also extended unemployment benefits for another 13 months. The same benefits that last f0r 99 weeks will remain in place under this provision. People who have or will use up these benefits don't get more under the deal.

There is also a slew of other tax reductions and credits included in the deal. One Republicans pushed for was a lower estate tax. The final compromise lowered the amount of the estate tax to 35 percent from 55 percent and raised the threshold that must be cleared for it to kick in from $1 million to $5 million.

Another provision were about 40 business tax breaks, which includes an option for businesses to write-off 100 percent of expenses in 2011. Also, included in this are more traditional tax credits, like one for research and development.

Given its large price tag, what do you think of the tax-cut deal?


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Comments

Paul Allaire December 20, 2010 | 11:35 a.m.

I voted no, but I do like the provision to allow businesses to write off investments for a year and for research and development. This appears to me as a direct economic stimulus that will work better than anyone expects. Regarding the renewal of the earnings tax cuts for the top few percent, we have had eight years to see this strategy work and it has returned nothing. What we will gain from this is a larger national debt and, inevitably, a debased currency.
Those who elected to temporarily reduce the amount of money collected for social security now have no grounds to claim that the program is in danger of becoming insolvent.

(Report Comment)
Mark Foecking December 20, 2010 | 11:52 a.m.

Economic growth has been far more influenced by the price of energy, mainly oil, than it has by tax policy. Periods of growth have been correlated much more with low energy prices than by what the top tax rates are.

Tax monies don't just disappear from the economy. A great deal of federal spending is done with private companies, and federal facilities economically stimulate the communities in which they are located.

If your philosophy is that you want the choose how your money is spent, rather than the government, then that's a good reason to to oppose a tax increase. But there's no historical justification for saying that higher taxes slow economic growth.

DK

(Report Comment)
Paul Allaire December 20, 2010 | 12:48 p.m.

I believe anymore that the reason the tax cuts have been failing is that when money is taxed your government, barring military adventures, does a fair job of spending that money inside it's own borders. When corporations and, I suppose, some of the wealthy are allowed less taxes they often invest the money overseas instead. It's obvious now. I don't know why I didn't see that earlier.

(Report Comment)
Michael Williams December 20, 2010 | 4:29 p.m.

One thing I DO know......they are the Obama Tax Cuts now. You can check it out....it's his signature.

The reason money goes overseas is......there is more profit there. You can make the product more cheaply (less overhead,including wages), and then you can sell it back to sucker Americans.

Tell me, folks.....If you had the opportunity to make a dollar, and then give 50% of it away......or make a dollar and give 49% of it away, which would you choose?

Because that's what we are talkin' about.......

(Report Comment)
Paul Allaire December 20, 2010 | 5:12 p.m.

It sounds as if what the economy needs is a subsidy for large wind farms and projects like the Tom Sauk Reservoir (perhaps with a little more oversight) as a way to provide inexpensive stable economic green power indefinitely. If you are missing my point, the reservoir would function like a giant battery, allowing the fluctuating wind power to be stored and drawn exactly dictated by the customers using it. I'm thinking this would be particularly easy in western states.

And yes, it would likely cost fifty cents over forty nine for a good while, but when the price of fossil fuels increases again, then we have an advantage that may exceed that of any cheap labor.

Another way to stimulate the economy is to subsidize the extension of subways further from the center of large cities, effectively lowering the cost of living and improving the quality of life for the people who work there. If you are missing the point, the move would likely translate into lower labor costs and a better workforce in those cities. It may return little for several years, but when the cities become more densely populated or larger and when the cost of fossil fuel rises it will likely make American labor more competitive.

(Report Comment)
Paul Allaire December 20, 2010 | 5:27 p.m.

We Americans like to beat on our chests and say that we are the greatest nation on earth. At one time this country was at least the greatest industrial power. There are many things that gave this country an advantage, but the largest was the abundance of natural resources that industry was allowed to exploit. This can be repeated without the risk that they would be depleted.

Or we could just continue as we have been...

(Report Comment)

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