Home -> Law Blog Directory -> Taxation & Estate Planning Blogs -> Start Making Sense

Taxation & Estate Planning

: Start Making Sense

Expiring tax cut for millionaires only?

"Millionaire," for this purpose, is defined in terms of annual taxable income.

I agree that it's politically deft, not that this will necessarily matter. And I do look forward to reading the Todd Henderson remake in which someone writes a column or post insisting that, despite his million-dollar income, he is barely scraping by and certainly isn't rich.

Apparently it loses $400 billion over ten years compared to letting the top bracket rate cut expire at $250,000 (bad), but raises $400 billion compared to extending all of the expiring rate cuts (good).

Given the insanity of extending any of the rate cuts more than very temporarily in the face of the fiscal gap (not to mention the insanity of extending any of them on this ground, in lieu of enacting better-directed stimulus), this is really all just about generating a one-day headline that favors the Dems for a change, albeit almost two years before the next election. We are so far outside the realm where intellectually credible policy options are being considered that it's hard to know how one should even try to discuss such things in normal policy terms, apart perhaps from teasing apart degrees of idiocy in the face of a far-reaching compared-to-what problem.

So I suppose there isn't much to say other than why not try it if it's politically effective, and all the more so if it might even pass (as the prior Democratic position clearly will not). But I assume the Republicans will bite the mosquito-sized political bullet and block it, like all of the other alternatives to 100 percent victory on the tax cuts.

Obama's federal wage freeze idea, by contrast, strikes me as both bad policy and bad politics. See one quick take here and another here. His three favorite activities appear to be begging Republicans to like him, endorsing and validating their policy views, and negotiating with himself (as Bush always refused to do).

I'm thinking of Otter in Animal House when he talks up the toga party: "I've got news for you, pal. They're going to nail us, no matter what we do. So we might as well have a good time." Not exactly Obama's attitude, as he continues to plead for Tea Party votes that will not be coming to him.

Full post as published by Start Making Sense on November 29, 2010 (boomark / email).