Monday, March 2, 2009

All Things Legislative...

I felt it necessary to take down my earlier post with the attached corrections because of my misunderstanding regarding the actual terms. In Obama's own terms, this legislation was designed to affect families making $250,000 or more, with no mention of whether this was net or gross income. So, it appeared to me that our president was talking about including more rather than less folks in the highest tax bracket. Let me say this clearly now; I WAS WRONG. The brackets are actually a return to Clinton-era tax brackets. In my defense, I did try to complete my due diligence...I went to, and, and tried search terms such as "tax bracket" to uncover the promised transparency...When these attempts were unsuccessful, I was forced to rely on media accounts, including WSJ and other prominent source accounts, to make sense of the new plan. I relied on incorrect ifnormation, but my misunderstanding has now been corrected; see this WaPo article for an accurate breakdown. These brackets have criticisms of their own...My strongest criticism is that I believe that in selling his plan, Mr. Obama has misrepresented those who truly makes up the upper class, or upper crust, in this country. By returning to the Clinton era rates, those making around $250K in net taxable income (pardon my earlier confusion) rise from 33% to 36%, plus their charitable contribution and mortgage interest deductions are further limited. Those making more than $378K in taxable income go from 35% to 39.6%. Those are the brackets of taxpayers affected by the increases in the plan. However, in selling his plan, Mr. Obama compares the nation's 400 highest-earning taxpayers to the the United States' middle class. I agree, those 400 taxpayers should pay more, much more. If we are going to honestly criticize trickle-down economics, then we need to specifically target the rich in this country. If we assume that these 400 taxpayers are actually working for their money, as wage earners, we can assume that their respective jobs come with incentives much more desirable than money. Company founders, CEOs, celebrities, professional athletes; these people are not going to quit doing what they do because they may fall into a higher tax rate. These positions include natural incentives; power, fame, fun. If, on the other hand, we assume that these persons do not earn a substantial portion of their income on the job, but instead make money off their investments (largely those with inherited family legacies like the Kennedys and Bushes of this country), this new plan raises their capital gains rates from 15 to 20 this really doing any good for our country? Shouldn't we create a new bracket, even a cap gains bracket, for those top 400, or even top 4000 taxpayers. Shouldn't a taxpayer making $350K be taxed differently than one making $35 million? Why don't we change this? We don't because of the same reason that no politician before President Obama has; their pockets are filled (their campaigns funded) with the riches of these folks....Democrats and Republicans alike are guilty here. President Obama prides himself on his campaign funding, the fact that most donors gave less than $50. I think that is admirable...He just has to start practicing what he preaches.

Now, as the first part of my post, I stand true...I'm posting it again below:

I am going to make an earnest effort here to fit all of my political complaining into one concise package. I'm well aware that not all of my readers and friends share my views. But, if a blog is not a forum to express one's self, than what is? So, on to my criticism of our plan for this nation's economic certainty and what it means for homeowners and taxpayers. First, the president institutes a "bailout" for all those homeowners who cannot meet their mortgage responsibilities because of ARMs that they cannot meet, ARMs that these folks entered into knowing full well that payments would escalate when interest rates increased. I call that a "windfall" for the negligent, but ok, for argument's sake, "bailout". I think my real criticism of this part of the package comes from my time spent in Orange County, ground zero for the collapse of the housing market. You see, out there in the OC, leveraging oneself for purposes of portraying a style of life well beyond one's means is commonplace. Anyhow, that tangent complete, I'll point out why I agree with CNBC's resident lunatic. The government, with tax dollars, is going to help keep homeowners in houses they cannot afford by lowering obligations to no more 37% of take home, paying off any deficit partially with credits to the bank, but more importantly, with taxpayer dollars. Here's what this package comes down to: bailing out, with taxpayer funds, greedy homeowners who bought homes they could not afford...this plan is not tailored for those who are now out of work, and is not tailored for those who've already been foreclosed upon. If your average homeowner, however, wants to take advantage of the favorable interest rates in this market, and lower his or monthly payments (on say, a responsible fixed rate mortgage), that homeowner will have to shell out 2-3% in closing costs, anywhere between $15-20K..which said homeower cannot afford, because his or her dollars are currently tied up in taxes paying off the mortgage down the street, you know, the one "bailed out" with the president's package.

That being said, I do believe that we need to take steps to fix the housing situation of so many that have no alternatives, whether renting or being foreclosed upon. This other WaPo article outlines the housing situation of those truly in need. With an involved administration, and HHS, I believe that there is a responsible plan to help those who are struggling....let's go back to the drawing board and think about this.
I also feel it's necessary to repost the final part of my original post...After all, I still believe in our president, but also in fiscal conservatism.

I don't regret voting for Obama. Our nation needed to take a step forward and to be inspired - Obama offered that hope and we as a nation accepted the challenge of becoming one again. That being said, I am a wee bit frustrated with our president, ringing in what I believe he thinks it the
New New Deal, but what I consider wasteful and irresponsible spending. Alas, my inspiration wears thin and I'm reminded, once again, why I'm a republican.

Now, on to DC voting rights....I kid, I kid....there's plenty of criticism for both parties here, and constitutional questions abound (anywhere from the right to bear arms to the power of self-governance), but I'll leave it to those who can summarize the situation much more eloquently than I. Ok, I'm stepping off my soapbox right this minute, and returning to the food...

Again, I'm stepping off the soapbox, but I felt it necessary to post one more time on this issue. I didn't want to stoke the fire of the media's mis-portrayal of this proposed budget package.

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