Friday, July 30, 2010

Bush Tax Cuts: Orrin's "Analysis"

Orrin Hatch thinks you're stupid, and if retweets are any indicator, many Utah conservatives are proving him right, buying his over-the-top double speak hook, line, and tea bag.

Orrin on July 22nd:

Introduced a Balanced Budget Amendment today, because our country cannot afford the spending binge Congress is on! #utpol
Orrin today:
Letting Bush Tax Cuts Die Would Kill Recovery: Analysts http://bit.ly/9oIFJ0 #utpol via @CNBC
Forgetting, for the sake of argument, that this is most likely some inattentive, poorly paid staffer (perhaps Utah GOP Chair Dave Hansen himself?), and ignoring that Orrin's analysts are the executives of a the large Deutsche Bank (the article may be better titled: Letting Tax Cuts Expire Would Kill Recovery... of Deutsche Bank!), let's take a look at what Orrin's "analysts" are actually saying.
The nascent US economic recovery would be halted in 2011 if Congress fails to extend the Bush tax cuts for the wealthiest Americans, analysts at Deutsche Bank said.

The cuts were enacted in 2001 and 2003 under President George W. Bush and in part covered those earning more than $250,000, but they are set to expire at the end of this year. Tax decreases for lower-earning people likely will be continued, but the ones for the top end of the income scale are in danger of going away.
Oh Noes!  Sure, the tax cuts for the middle class will stay in place, but what about the rich?!  Won't someone think of the wealthy bankers of the world?  Forget that this "analysis" runs contrary to all the "non-big-bank" analysis out there.  The rich are suffering, people!  Why is the middle class being so selfish?  Come to think of it, What About Our Stockholders' Profits?! is a more accurate headline for this piece.  The Douche Deutsche analysts continue:
The impact would be worse, the analysts said, if Congress fails to fix the Alternative Minimum Tax, which was enacted in 1969 to make sure rich people pay taxes but was never indexed for inflation, and thus is now hitting middle-income workers.
"In a worst-case scenario, allowing the Bush tax cuts to expire and failing to fix the AMT could result in (1.5 percent) of fiscal drag in 2011 on top of the 1 percent fiscal drag we expect to occur as the Obama fiscal stimulus package unwinds," Deutsche said in a note to clients. "If the recovery remains soft/tentative through early next year, this additional drag could be enough to push the economy to a stalling point."
Catch that?  If the upper end of these tax cuts expire, we're all going to die... but if we don't adjust the AMT to make sure the rich pay their fair share... we're all going to die.  Wow, this is confusing.  Which is it?  Either the rich need to catch a (continued) break, or they need to start paying their fair share.  Can it be both at once?  (Hint: No.)  

So what Orrin has served up here is an article by bank "analysts" pretending to be concerned about the economy by arguing both for an extension of tax breaks for the wealthy, and an inflation based adjustment of the AMT so that the wealthy will be paying more taxes, and so that you'll be fooled into thinking it's you they had in mind when they penned this piece.  And Orrin serves up this blustery support for the tax cuts that will add $3 trillion dollars to the national debt  a week after sponsoring a balanced budget amendment because he can't sleep at night worrying about the national debt.

AMT was designed as a extra tax on high earners, but the the income level above which someone is subject to AMT isn't designed to change with inflation so it requires an act of congress to change it.  Without adjustments, each year people who didn't have to pay AMT last year and aren't the tax's intended target will have to pay AMT (usually a grand or two at the bottom of the range, going up from there).   An adjustment for inflation -- especially an automatic adjustment so we don't have to do this every year -- is a great idea.  But Orrin has stumbled on that nugget of smart by sheer accident as he trudges through a self induced marsh of contradictory, hypocritical, hyperbolic stupid.  He's not linking to this article for the insight, he's linking to the article because some bankers are really really really concerned that tax cuts for the rich may expire, and they are apparently his constituency.  That and they used the word "Kill," which is always scary.

Letting the upper end of the Bush Tax Cuts expire will reset the revenue sets to those of the Clinton years, which if you'll remember were pretty super years, economically.

As I began: Orrin Hatch thinks you're stupid.








 

1 comment:

  1. Senator Hatch is perfectly consistent in his philosophy. Republicans can do as much deficit spending as they want and double the National Debt in eight years (President Reagan tripled it). But if the Democratic Party gets control of Congress and the White House, the party is over!

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