I really would like to see two rules implemented in the Administration's Homeowner Stability Initiative procedures, in addition to payments lowered to 31% of income.
First, no tax deductions for interest on bailed out mortgages. That would make the rest of us cover the sin twice.
Second, if and when a bailed out property gets sold for more than the mortgage principal, the "profit" gets taxed at 100%, until the incentives are paid back. Those incentives, of a thousand dollars here and there, are our tax dollars! They need to be paid back to the Treasury, not end up as "somebody's slick move".
The implementation rules must contain assurances that the $75 billion gets paid back by those who got bailed out, not by our children.
Mr. Geithner has several months for developing the implementation rules. The money comes out of TARP, which means he can do pretty much whatever he wants. Such rules should not be a problem for him, and it would be very reassuring, and FAIR, for those of us with the "responsible gene".
I'm a bit disappointed in President Obama's attempts to woo the GOP, who promptly trompled all over him in the second bailout vote by voting no to a man. I fear the concessions made will cost Americans dearly because the taxes breaks seem to be structured such that the money will not be used to create jobs. We've thrown another 23.8 B dollars in corporate tax breaks away.
Jason Furman has investigated that the tax breaks are not funneled back into the economy for jobs. Beneficiaries include some of the same people who got us into this mess.
Why do we have to give more money to these guys! We've already given so much. These concessions are not proving politically helpful. Stop it already. Break out the stick.
I'm also posting a link to The Young Turks video.
http://vids.myspace.com/index.cfm?fuseaction=vids.individual&videoid=51250178
I have links to an article on HuffPo by Thomas Edsall
http://www.huffingtonpost.com/2009/01/27/stimulus-features-tax-cut_n_161170.html
Offering more thoughts on the stimulus package... one area of great need is to shore up the real estate markets. While I'm not sure how best to help those who are caught up in the sub-prime loans and foreclosures, I do have some thoughts on slowing the further decline of real estate values caused by too many properties on the market... Offer or reinstate the deduction for ALL REAL ESTATE interest on residential properties and if near future circumstances dictate (which in all likelihood they will) on commercial properties too. A couple of decades or so ago, the tax deduction of interest paid on real estate was eliminated except for primary residences and other special properties such as rehabilitations and low income housing. If the tax deduction for interest paid on other types of real estate was reinstated, it would stimulate the purchase of second homes, rental properties, etc., and help spur demand in the real estate industry. This could slow the further decline in real estate values over time and prevent people who have already lost so much in the financial debacle and stock market decline from losing further money in the equity of their homes. Providing this tax break would encourage purchases in an otherwise buyerless situation.
I typically don't support tax breaks or rebates, but in these circumstances, I believe that some well placed tax breaks or reinstatement of past tax deductions would be helpful.
Another potential tax incentive would be to encourage foreign manufacturers with sites in the US to begin manufacturing their US products in the US. Many companies are already considering this as a way to cut their manufacturing costs, but they need just a little push to make the final commitment. This would bring additional jobs into the US. Incentives could include set up grants... to cover the costs of setting up the manufacturing facilities, etc. I don't believe long term tax breaks should be used as a "federal" enticement. Many states try to offer these to compete for the business. However, I believe that federal grants to establish manufacturing in the US might be the push some of these companies need to make the final decision.
Comments to Market Places “Obama's stimulus plan seeks tax cuts” (http://marketplace.publicradio.org/display/web/2009/01/05/pm_obama_stimulus/)Apparently, Instead of creating newer jobs, Green and Infrastructure, we’re now talking about giving huge Tax reductions on paycheck withholdings. i.e. giving letting you keep more money from your paycheck. This is great. But I have some problems with this.First off, is this a reduction from total paid over there year, or will I have to make it up in April?Secondly we're going to give "Working Class" people more money back on their Paycheck. So about $1 more per hour, 40 hours, $40 bucks. Great, so instead of buying the dirty ass cigarettes and the cheap ass beer (or whatever ails them), they can buy what they want. If they're not smart enough to hold onto that 40 bucks to provide some cushioning from their zeroed out bank account; while hoping that they don't get the pink slip next week. This “stimulus” isn’t really going to help the people struggling. They need better opportunities.Provide Jobs, Jobs equal Money, Money equals spending, Spending equals better economy. Obamanomics 101, why are we straying and toting party lines. If we wanted tax cuts and Same-Old solutions, we would have voted for the other guy. We voted Bold, now make it so!
Hey Everyone,
Ok, I am a hard working Middle Class man with a Salary of just $69,000 per year. Well, even that is much higher than your average hard working middle class man.
I wanted to write this post because I hear the McCain campaign trying to bash Mr. Obama raising taxes on a $250,000 Net income of a small business to help our country. Well, in my eyes the way I see it is if I were to receive a tax increase of say 4 - 7% I would have no problem with that at all knowing that my contribution is going to help our economy..
The way it is, if the economy continues my $69,000 salary may become a $0 salary, then not only could I not help this Country but wouldn't be able to help my family or myself either!
So, if it means anything, I am way below the higher tax bracket but if a slight increase in my taxes would save not only the economy but my JOB as well, than heck yeah, take a little from me now and then give me back a little when we are in a position to do so...
I understand the the average American doesn't understand the in's and out's of high finance and the way that it basically helps businesses to avoid or minimize taxes. I've worked for a wealth growing institution for years and do understand those particulars. Our clients are Fortune 500 companies, local corporations - big and small- and individuals whose networth is more than $1 million. When an individual like Joe the Plumber opens his own business, he is wide open to tax minimization like you and I could only dream of. First off, he incorporatios or forms an LLC (Limited Liability Corporation). His tax advisor or bank, if it offers such services, can incorporate him in a state, island or other vicinity that is tax friendly and still have his businees licence in the state where he will actually be doing business. They then create a shell company in a tax friendly jurisdiction that makes it appear that a good deal of his business is being done in the state in which the shell company exists. Major tax breaks there! By the time things are said and done, he will probably be paying less taxes than he is now and he will be able to write off things like a trip to Mexico (for business purposes, of course!). He could bring along another couple under the pretense that he wants to get that person's plumbing business. That's just a very, very quick overview. We haven't touched on Delaware Business Trusts, Cayman Island Business Trusts, etc.
I don't understand why the Obama campain hasn't gently fired back regarding the perks of owing your own business! It is not Joe the Plumber that I would be more concerned with, it would be Joe's employee or two that I would be most concerned with!! They would be hurting more than The Plumber would ever be hurting.
We need to get this info out there! It has the potential to help Obama and also let "Joe the Plumber" know what's really availble to him besides a vote for John MCCain!!!
Sherry
Delaware
In yesterday's Albuquerque Journal headlines, John McCain and his sudden new revelation on changes for America took up half the front page. I was incredulous. Obama has been talking about the needed changes in this country for how long now? And suddenly McCain is taking on the theme as his own. He's so used to the same old politics, the same old living off the have-nots that McCain can't even come up with his own direction for the United States of America. That is just appalling.
I am very happy to hear Obama nipping McCain and his cohorts' dishonesty right in the bud. McCain is spending millions of dollars on ads claiming that Obama is going to raise our taxes, bla bla bla. Yet for those of us who care to check out the truth, Obama's goal is giving 95% - NINETY-FIVE PERCENT - of the American people tax breaks.
Because McCain's ad ticked me off so much, I wrote to a number of newspaper editors to list the lie that McCain is telling about Obama's tax plan and then listing all of the tax breaks Obama plans for this country's citizens. At least one of the newspapers is going to publish my letter. I challenge each of you to write a letter to the editor whether it's local, national, or all the above - any time you see another McCain lie on television, radio, or other media, write the editor so that more of the public can understand that McCain is lying and then list what is Obama's truth.
We need to educate as many people as we can these next few weeks. McCain's working overtime on manipulating his way into office. We need to stop that conniving behavior, and get Obama elected!
I enjoyed the YouTube video on this blog of Obama's talk with Indiana folks today, September 6th: http://my.barackobama.com/page/community/post/obamaroadblog/gG5c3W.
As we know, gas prices are soaring and families across Michigan are struggling to buy enough gas to get them to work everyday. In the midst of this, Exxon-Mobil yesterday announced that they made a record setting 12 billion dollar profit this quarter. Exxon Mobil made more this month than any other American company in our history. To put this in perspective the company made nearly $900,000 a minute. From April to June, while Exxon’s was reaping these profits, a typical Michigan family paid $522 more for gas than they paid in the same three months of 2001, when President Bush took office. And what is more, John McCain’s tax plan would give the 5 largest oil companies 4 billion in tax breaks (Center for American Progress 3/27/08). These 5 companies made a combined $43 billion over the last 3 months. In contrast, Michigan families have seen their incomes decline by $4,639 in inflation-adjusted dollars, since Bush took office.
We need to elect a president who has the best interests of Michigan’s working families in mind rather than those of billion dollar corporations. Senator Obama has a plan that provides middle class families with tax relief, a plan that is designed to give relief to working families across Michigan and America.
Below you can find what Senator Obama had to say in response to Exxon Mobil’s record profits.
“Perhaps the only thing more outrageous than Exxon Mobil making record profits while Americans are paying record prices at the pump is the fact that Senator McCain has proposed giving them an additional $1.2 billion tax break. While Senator McCain’s plan has succeeded in helping his campaign raise over $1 million from oil and gas company executives and employees just last month, it won’t lower gas prices or end our dangerous dependence on foreign oil. Instead of an energy policy that reads like an oil-company wish list, it’s time to create a new American energy economy by investing in alternative energy, creating millions of new jobs, increasing fuel efficiency standards, and ending the tyranny of oil once and for all,”
I am a realist. My thought process has always allowed me to evaluate a policy from both sides and be able to protect the bottom line. The country is near a recession and we are heavily in debt and with the increasing cost of the war there is no end in sight to our economic woes. For many individuals one has to work for 8 hours just to fill up their tank. I know that the minimum wage must be increased because families cannot possibly afford to support their families on the existing wage but an immediate increase to 7.25 is a pie in the sky vision without tax cuts to small businesses. Small businesses have been heavily impacted with the increase of health care insurance and basic operating expenses. In major corporations the maximum raise is 3% of the gross income. Unions are being broken and wages and benefits are being decreased. I have a friend that has worked for a company as a journeyman for 30 years. In 2009 his contract is not being renewed. After he turned 40 the company no longer covered health insurance so he pays out of pocket. He will be 52 years old looking for a job. This is just one scenario that is happening to workers. A major telecommunications company in their effort to break the union of a company they took over is hiring workers on temporary bases that will not receive benefits until the contract has expired. The more I listen to the stories of Americans the more concerned I become about the state of this country. If companies are already stabbing loyal employees in the back how much more brutal will they become when they have to pay more for employees. Employers will cut back on employees. They will relegate workers to part-time status. Employees will do twice the work for their pay because of the increase. The increase must be inline with the cost of living increase and the overall raise given to corporate America. We know that business is not going to do the right thing by its workers so it is the job of politicians to protect the interest of its citizens but let’s do it responsibly. The Republicans have overdone tax breaks for the wealthy but Democrats must be willing to give tax breaks to small businesses in order to help the working poor. If no compromise is found we the American people suffer. I wish our elected politicians would remember that their job is to serve and protect the entire country not just their constituents. I ask that you remember your oath and learn to compromise. I agree this country needs a change. This would be a great start.
The details and expert analysis on Obama's plan for middle-class tax relief.
