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Things to know about the tax cut bill

Tuesday, December 14, 2010

I heard a commentator talking on the radio about "pork" in the bill that extends the Bush tax cuts. I thought, that's funny, because I've never heard things like the child tax credit, the alternative minimum tax (AMT) fix, the ethanol tax credit, and a lot of other tax breaks referred to as "pork."

Tax items included in the bill are existing tax breaks that have expired or will soon expire, not new ones. To let any of them expire would be harmful to the economy and to millions of middle income taxpayers who have built household budgets around these tax cuts.

For instance, if the Bush income tax cuts were not extended it would mean that more than 840,000 Nebraskans who earn less than $200,000 a year would see smaller paychecks next year. That's 98 percent of all Nebraska taxpayers.

Ethanol

The bill extends the ethanol tax credit. Were the tax credit to expire it would create financial difficulties for Nebraska's 25 plants resulting in the loss of nearly 13,700 jobs in our state while increasing our dependency on foreign oil.

The bill also renews the tax credit for biodiesel, which expired at the end of 2009. In 2009, the biodiesel industry supported 23,000 jobs. In 2010, the industry supported 14,560 jobs, a loss of 8,440 jobs that can be directly attributed to the lapse of the biodiesel tax incentive.

Wind

The bill extends the 1603 tax investment credit for renewable energy. This program saved 55,000 jobs in wind energy during the economic downturn. Extending 1603 will ensure the continuing development of renewable energy projects.

Tax Cuts for Moms and Dads

Think about the impact on more than 161,000 families in Nebraska if the child tax credit were to expire. That's how many Nebraska families claimed the credit in 2008 realizing an average tax cut of $1,370 per family. This bill extends the child tax credit, making sure these families can continue to make ends meet.

Estate Tax and Other Tax Relief Provisions

The bill extends dozens of other existing tax relief provisions, including lower capital gains and dividends rates and it sets the estate tax rate at 45% with a $5 million exemption, so small businesses and families are protected in 2011 and 2012.

The bill extends marriage penalty relief, adjusts the AMT, and extends the earned income tax credit, claimed by nearly 123,000 Nebraska families. It also extends unemployment insurance for 13 months, a lifesaver for many people who've been out of work due to the economy.

The tax cut bill consists of many tax relief provisions that benefit workers and businesses. For businesses, tax incentives that encourage investment, expansion and charitable giving are extended and for workers, there is a 2 percent cut in the payroll tax.

Bipartisan Bill

This bipartisan bill will prevent tax hikes from impacting hundreds of thousands of Nebraskans on January first. It may not be the best possible solution but it is the best solution possible.


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Dear Senator Nelson,

Wasn't the tax breaks of 2001 & 2003 originally sold as being the best possible solution to stimulate the economy and create jobs? If it can be shown that other options could possibly outperform the tax cut option shouldn't we a least consider them? I think doing otherwise would be going against the concept for which the tax cuts were originally granted.

The very frequently referred to concept of "Trickle Down Economics" came by its name honestly, in fact a lot of folks are still waiting for it to kick in. Even if it does Trickle Down are there assurances it's going to Trickle Down here in our economy? Folks falling into the upper income brackets guide their investments by where they get the best return on that investment. Job growth and economic considerations are not always a priority in their decisions. We are trying to create jobs here in the U.S., not somewhere else. If our country has to borrow money to offset the loss of tax revenue, then shouldn't we at least have some assurances the preponderance of tax savings created by extending those tax cuts will be utilized right here at home and have the desired outcome?

The extension of the 2003 tax cuts for the wealthy is misdirected by the fact that it actually transfers more of the tax burden onto small business concerns and the general public. The continuous uses of Offshore Tax Havens by individuals and Corporations have resulted in a loss of tax revenue estimated by the Treasury Department in 2009 to be between $43 and $123 billion per year. Do we really need to provide these people with more tax breaks which will allow them to further increase their Offshore Holdings and put additional tax demands on our Small Business community?

Offshore tax havens have enabled Wall Street to evade taxes, freeing more money for speculation and enabling them to take more extreme risks without counting them on their balance sheets. Not only does this promote a culture of risky gambling and facilitate fraud, it encourages firms to structure shadowy, complex deals to peddle toxic assets globally, and build up leverage and risk more widely across the global financial system -- leading to much more widespread, severe economic crises. For example:

In 2007, Citigroup had 427 tax haven subsidiaries, Morgan Stanley had 273, Bank of America had 115, the collapsed Lehman Brothers had 57, JP Morgan Chase had 50, Goldman Sachs had 29 and AIG had 18.

http://businessagainsttaxhavens.org/wp-c...

http://www.gao.gov/new.items/d09157.pdf

People are getting tired of waiting for the results from Trickle Down Economics to stimulate the economy and create jobs -- seven years and still waiting. A farmer friend of mine has a good way of explaining it -- he says it's like always being the last one on an irrigation ditch to receive water. The ones closest to the source of diversion benefit the most -- the ones at the far end suffer all the consequences of mishandling of the resource along with the loss due to absorption, evaporation, etc. in the delivery system.

One of the best Federal Programs to ever be implemented in my opinion was the creation of the Community Block Grant Program. This program has been utilized by nearly every community in our country to make vital improvements to public infrastructure systems, buildings, etc. Without these matching Federal Funds to offset lack of local revenue some of these projects would never have gotten off the ground. This is an example of tax revenue having the desired outcome. It is widespread across our country, it creates jobs, and the people can see for themselves where the money is being spent.

Why couldn't we lessen the matching amount by communities to the point that many would see it as an opportunity to good to pass up? Everyone would benefit -- top to bottom.

Thank you for consideration of my concerns,

Best Regards to you and your family

-- Posted by Geezer on Wed, Dec 15, 2010, at 4:31 PM


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