Friday, January 09, 2009

Obama Budget Proposal - the “Middle Class” Tax Cut Under Fire from Democrats

The Associated Press is reporting that there is some dissension amongst the rank and file Democrats (and some fiscally horrified Republicans) over the President-Elects proposed stimulus plan. Of interest are the proposed tax cuts –

About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.
One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making checks about $10 to $20 larger each week.
Democrats emerging from a closed-door meeting of the Senate Finance Committee had little positive to say about the tax cut proposals. Conrad was critical of the proposed break for workers and their families.
"Twenty bucks a week. How much of a lift is that going to give?" he said.
Nor did he sound positive about a proposed tax break for businesses to create jobs — a $3,000 tax credit for companies that hire or retrain workers.
"If I'm a business person, it's unlikely if you give me a several thousand dollar credit that I'm going to hire people if I can't sell the products they're producing," Conrad said.

Although an extra $20 per week appears to be a drop in the bucket, Conrad (D-ND) is following Liberal form in decrying tax cuts; while the President Elect’s path to the Oval Office was paved with promises of “Middle Class Relief”, bought hook, line and sinker by most “independent minded” voters, that $20 bucks could speak volumes in 2010. What will continue to be on the minds of those who cast their vote for $20, will be the big-business bailouts that were shoved down the throats of the Taxpayer, initially proposed to salvage the government run mortgage giants, Fannie Mae and Freddie Mac, the list of those lining up for a piece of the taxpayer funded pie include, not only any industry associated with a mortgage or credit designation – but those industries who made bad business decisions, as well as those who are suffering as a result of loss of consumer confidence.

Newspapers in Connecticut are asking for relief. (Although some insist it selective tax relief, rather than a true “bailout”, newspapers failed to understand that editorializing the news and alienating 50% of their audience, in an age where that 50% can go elsewhere to find news that is not “biased”, resulted in a drop in subscriptions. (Note: not all newspapers are experiencing steep declines, The Wall Street Journal, for instance.) Although the press has consistently blamed the decline on the “Internet”, a new source for decline in subscriptions appears to be literacy! (Possible cause of new scapegoat: Online advertising revenues not as expected.

The latest industry to line up at the “bailout trough” is the Porn industry. Given the make-up of the current legislature, it would not surprise most conservatives should Larry Flint receive more than a $20 check in the mail. Conrad, who was one of the earliest proponents of the subprime bailouts (some self-interest may have applied) , should look long and hard at those proposed tax cuts and consider those colleagues who might want to stay competitive in 2010.

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