I find myself with oddly divided feelings about this whole tax deal making its way through congress. On the one hand, while extending the tax cuts which we're already experiencing seems prudent, especially in a recession, piling additional tax cuts on top of those (especially the across the board 2% reduction in social security withholding) seems seriously unwise when our deficit is already the size that it is.
On the other hand, I could certainly use the extra $150+ per month in take-home income. As I look at moving bills and such, I keep thinking, "Well, if this passes my paychecks will go up soon."
We routinely scorn politicians for being easily bought, but I'm feeling rather hungry for my pot of lentils myself about now.
FROM THE ILLUSTRATED EDITION.
18 hours ago
3 comments:
I completely relate. I detest large portions of our tax policy, but find myself on the receiving end of it. Should I refuse the tax refund (which is actually flat out welfare) out of principle? I don't.
I do not *need* the money, but I really like it. And I do not like that I like it.
Fiscal policy should be countercyclical. During economic booms the gov't should raise taxes and cut spending and run surpluses (like Clinton did); during recessions the gov't should cut taxes and raise spending and run deficits (like Obama is doing). In theory the budget should balance over the long-term, but in practice this isn't working because too many presidents insist on running deficits during boom times (Reagan, Bush Jr.).
I'm totally comfortable with the size of this years' deficit, which is appropriate under the circumstances, though I agree that we need a realistic medium-term plan to not only balance the budget but bring it into surplus after the economy improves.
Joel
Did you read Daniel Henniger's column in the WSJ on Thursday? I thought he made some excellent points about what exactly are taxes for? To fund the gov't? To pay off deficits?
As for us, I'm happy that the deal was pushed through. We have a Subchapter S corp and have been hoarding cash because we are worried about losing our LOC with the bank. All that gets added to our personal income tax at the end of the year. It would have been better if they lowered the payroll tax on the employer side as well. That alone would spur employment.
JMB
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