By DENNIS SEID / NEMS Daily Journal
Don’t get me wrong – I like paying less in
But assuming that the deal that was struck between the Obama administration and Republicans passes, we’ll see the deficit grow by another $900 billion because of the extension of the Bush tax cuts through 2012.
So for those worried about higher taxes and higher deficits, you’ve got one less thing to worry about.
In the elections last month, voters showed that they were tired of the “out-of-control” spending and rising deficits that “our grandchildren and great-grandchildren will have to pay for,” as the arguments went.
The deal hammered out last week includes more than tax cut extensions. A temporary reduction in the payroll tax was included. The deal also extends unemployment benefits for another 13 months.
Many economists think those moves will help the economy grow faster than earlier projections.
Businesses aren’t going to hire people if they’re not sure of their tax burden. Consumers aren’t going to start spending more until their confidence improves, and it does that when more of them have jobs – and lower taxes.
Oh, but the “wealthy” are getting undeserved breaks, critics say. Yes, some are. But some of the people making $250,000 or more are small businesses who report their income under personal income.
It’s true that only about 3 percent of small business earn more than $250,000 a year – but they account for half of about $1 trillion in net business income reported on all individual returns.
So getting more money back in to the hands of people will help the economy. And that’s a good thing.
So the tax-cut extension and other moves provide a little short-term boost, otherwise known as – brace yourself – a stimulus. Shhhhh! Yeah, it’s a dirty word these days. But call a spade a spade.
Now back to that deficit thing.
If we’re that concerned about the deficit and “runaway spending,” then we let the tax cuts expire and we don’t extend unemployment benefits. We don’t cut the payroll tax either, temporarily or not.
We also cut spending to the bone at every level of government. We eliminate waste and fraud.
Meanwhile we also try to figure out how to educate everybody, protect everybody, fix our crumbling infrastructure and help our friends, allies and even a few enemies across the globe with a few dollars.
And fight two wars.
Suddenly, the answers don’t seem quite as easy and simple as we thought.
If times are tough, as they are, sacrifices just be made by everyone. We suffered through the Great Recession, not the Great Depression, so maybe we aren’t as ready as we think we are.
We have to decide if we sacrifice short-term gains for long-term gains or vice-versa.
Let’s hope the latest move results in the latter.
Contact Dennis Seid at (662) 678-1578