deficit http://www.wisebread.com/taxonomy/term/6507/all en-US The Expiring Bush Tax Cuts: What’s the Fuss? http://www.wisebread.com/the-expiring-bush-tax-cuts-what-s-the-fuss <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-expiring-bush-tax-cuts-what-s-the-fuss" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4840957826_4e9168ae22.jpg" alt="Bush tax cuts" title="Bush tax cuts" class="imagecache imagecache-250w" width="250" height="186" /></a> </div> </div> </div> <p>Back in the good 'ole days of budget surpluses (i.e., 2001 and 2003), the Bush administration was concerned that if surpluses grew too large, they would stifle the economy's growth. In an effort to reduce the surpluses, Congress enacted significant tax cuts for all tax brackets that would be effective until the end of 2010.</p> <p>Given the continually fragile state of the economy and enormous budget deficits, should the tax cuts be extended or should they be permitted to expire? The answer to that question is very complicated and requires a little background information.</p> <h2>Stimulating the Economy</h2> <p>From the most simplistic point of view, most economists advocate that in order to restart the economy, we need to stimulate consumption, which should cause employers to hire additional workers, which should reduce unemployment, which should further stimulate consumption, and so on and so forth. Because of this generally accepted premise, the issue at the heart of the debate surrounding the Bush tax cuts is whether the cuts will efficiently stimulate consumption and aid the economic recovery.</p> <h2>Budget Deficit Concerns</h2> <p>Even if the tax cuts do effectively add to the economic recovery, they will very likely continue to add to the budget deficit over the next 10 years to the tune of $3.7 trillion, according to the nonpartisan Tax Policy Center. Although Republicans may argue that the costs of the tax cuts will be netted out by increases in taxable earnings, there is little evidence to suggest that this will occur, at least in the short-term.</p> <h2>Proposals</h2> <p>Surprisingly, many Democrats and Republicans agree that the tax cuts should be extended, at least temporarily, for 97% of Americans, i.e., all but the top two tax brackets. In terms of income, this means the cuts will be extended for those individuals that make less than $200,000 per year and those families that make less than $250,000.</p> <p>Republicans argue that the cuts should be extended to all tax brackets because of the tenuous economic recovery and because of a possible &quot;double dip,&quot; &mdash; a worsening of the economy caused by too little consumption. They argue that increasing the tax rates on the wealthy will discourage business owners from hiring new employees or reinvesting profits in their businesses. A relatively small group of Democrats also support this premise.</p> <p>Democrats contend that the taxpayers in the top two tax brackets will not allow increases in their tax liabilities to affect personal spending, business spending, or hiring new personnel. They claim that business owners will hire additional employees if it is a good idea, regardless. Democrats also claim that the wealthy are much more likely to simply save their money than spend it, but that those lower-income taxpayers are much more likely to spend the money and increase consumption immediately.</p> <p>According to the Tax Policy Center, if the tax cuts are allowed to lapse for the top two tax brackets, it will shave $700 billion off the budget deficits over the next 10 years. However, if all the cuts are extended, the majority of that $700 billion will go to the wealthiest 1/10 of 1% of Americans, who earn more than $7 million per year, on average, and will result in an average tax savings of $3 million over a 10-year period for those taxpayers.</p> <p>Although many Democrats and Republicans do think the tax cuts should be at least partially extended, there are those that think the cuts should be allowed to lapse completely, including former Federal Reserve Chairman Alan Greenspan. During an Interview on NBC's Meet the Press, Greenspan said: &quot;[t]he problem we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous.&quot;</p> <h2>How This Will Affect You</h2> <p>Because this is an election year, members of Congress are loathe to increase taxes on constituents and may not act until after the November elections, at the earliest, and possibly not until next year. If the tax cuts are allowed to expire, taxpayers in most tax brackets will see a 3% to 5% increase in their tax liabilities. The marriage penalty will return, meaning the standard deduction for married couples will be less than the standard deduction for two unmarried people. The child tax credit will be reduced from $1,000 to $500. The long-term capital gains tax will increase from a maximum of 15% to 20%. Qualified dividend plans, which are now taxed at 15%, will be taxed at the same marginal rate as the taxpayer.</p> <p><em>What do you think? Do you support allowing the cuts to expire? Why or why not?</em></p> <div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>This is a guest post by Steve Cook. Steve is an associate with a Phoenix, AZ-area law firm that specializes in taxation. He is also a bit of an economics, web design, and software engineering nerd. Read more articles from Steve's firm:</p> <ul> <li><a href="http://cookazlaw.com/blog/5-arizona-estate-planning-and-gift-strategies">5 Arizona Estate Planning and Gift Strategies</a></li> <li><a href="http://cookazlaw.com/blog/arizona-probate-and-living-trust-myths">Arizona Probate and Living Trust Myths</a></li> <li><a href="http://cookazlaw.com/blog/arizona-llc-operating-agreements">Arizona LLC Operating Agreements</a></li> </ul> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/steve-cook">Steve Cook</a> of <a href="http://www.wisebread.com/the-expiring-bush-tax-cuts-what-s-the-fuss">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-george-w-bush-write-for-wisebread">Should George W. 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Bush Wed, 29 Sep 2010 12:00:13 +0000 Steve Cook 250247 at http://www.wisebread.com Bad, bad China: a round-up http://www.wisebread.com/bad-bad-china-a-round-up <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/bad-bad-china-a-round-up" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/toothpaste.jpg" alt="messy toothpaste cap" title="messy toothpaste cap" class="imagecache imagecache-250w" width="250" height="187" /></a> </div> </div> </div> <p>Well, I&#39;ve pretty much come to the conclusion that I need to stop buying Chinese goods. This is a tough one for me, mostly because so much of the cheap stuff that I love to buy comes from China, and as my readers know, I really like China and would like to see the country succeed. </p> <p>However, one headline after another is screaming to me that I need to seriously consider the source of what I am buying before I buy it. At the very least, you too should consider keeping an eye out for the following:</p> <h4>Poison poissons? From <a href="http://news.bbc.co.uk/2/hi/business/6251678.stm">BBC</a>.</h4> <p>&quot;The FDA is not allowing the import of these Chinese farmed seafood products until the importers can prove that the seafood is free from harmful contaminants,&quot; Dr. David Acheson, the U.S. Food and Drug Administration&#39;s assistant commissioner for food protection, said during an afternoon teleconference.</p> <p>He identified the banned fish as catfish, basa (similar to catfish), shrimp, dace (similar to carp) and eel, which he said may contain chemicals that are potentially carcinogenic.</p> <h4>Want shiny teeth? Try anti-freeze. From <a href="http://www.cbsnews.com/stories/2007/06/28/health/main2992320.shtml">CBS.com</a>.</h4> <p>The New York Times reported today that approximately 900,000 tubes of tainted Chinese toothpaste has shown up in prisons, juvenile detention centers and hospitals in North and South Carolina, Georgia and Florida, including some serving the general population. </p> <h4>It&#39;s been going on for a lot longer than you think! From <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/17/MNGM9QGQ761.DTL&amp;type=health">SF Gate</a>.</h4> <p>&quot;The U.S. imports a lot of Chinese glycerin, and it is used in ingested products such as toothpaste,&quot; Mary Pendergast, then deputy commissioner for the Food and Drug Administration, <strong>wrote on Oct. 27, 1997</strong>. Learning how diethylene glycol, a syrupy poison used in some antifreeze, ended up in Haitian fever medicine might &quot;prevent this tragedy from happening again,&quot; she wrote. </p> <p>[emphasis mine]</p> <h4>China responds. From <a href="http://www.cnn.com/2007/WORLD/asiapcf/06/27/china.tainted.food.ap/index.html?section=cnn_latest">CNN.com</a> via <a href="http://itchmo.com/read/china-closes-180-food-factories-for-using-illegal-chemicals_20070627">Itchmo</a>.</h4> <p>Formaldehyde, illegal dyes, and industrial wax were found being used to make candy, pickles, crackers and seafood, it said, citing Han Yi, an official with the General Administration of Quality Supervision, Inspection and Quarantine, which is responsible for food safety.</p> <p>&quot;These are not isolated cases,&quot; Han, director of the administration&#39;s quality control and inspection department, was quoted as saying.</p> <h4>Getting <em>tired</em> of all the bad news from China? Ha! From <a href="http://www.newsinferno.com/archives/1595">Newsinferno</a>.</h4> <p>Defective tires have been added to an ever-growing list of dangerous Chinese imports. The National Highway Traffic Safety Administration (NHTSA) ordered 450,000 tires recalled after Foreign Tire Sales, the New Jersey company that imported the tires, disclosed that they had been manufactured without a gum strip meant to keep the tread from separating. The tires, manufactured by Hangzhou Zhongce Rubber, have been blamed for at least two accidents, one of which was fatal.</p> <h4>Poison toys. Good times. From <a href="http://abcnews.go.com/US/story?id=3275264">ABC News</a>.</h4> <p>China by far leads the list of countries making products that are recalled in the United States, accounting for 65 percent of all the recalled products in this country this year, according to CPSC. In 2006, China accounted for 233 product recalls -- nearly double the rate from the previous year, with lead a recurring cause among the recalls.</p> <h4>It&#39;s the attack of the killer tomato paste! In Italy! From <a href="http://www.winenews.it/index.php?c=detail&amp;dc=96&amp;id=10708">WineNews.com</a>.</h4> <p>And, Coldiretti emphasized, among the arrivals from the Asian giant it is significant that tomato concentrate, which represents almost one third of imports (31%), has registered a record import increase of 150%. This is a particularly worrisome situation for Italy because it was unable to obtain a norm for the mandatory printing of the origins of a product on labels, thus the risk that non Italian goods will be sold as Italian made.</p> <p>Ok, well, that last one isn&#39;t so bad. Yet.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-karim">Andrea Karim</a> of <a href="http://www.wisebread.com/bad-bad-china-a-round-up">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/decked-out-in-dog-more-reasons-to-boycott-chinese-goods">Decked out in... dog? More reasons to boycott Chinese goods</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/chinese-money-habits-how-my-culture-influences-my-attitudes-toward-money">Chinese Money Habits - How My Culture Influences My Attitudes Toward Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-shanghai-supposition-better-choices-more-choices-better-experiences">The Shanghai Supposition: Better Choices=More Choices=Better Experiences</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-sell-your-kids-stuff-at-a-consignment-sale">How to Sell Your Kid&#039;s Stuff at a Consignment Sale</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-year-s-hot-toy-is-next-year-s-trash">This Year’s Hot Toy is Next Year’s Trash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle buy China deficit goods imports poison purchase seafood toys Fri, 29 Jun 2007 01:12:54 +0000 Andrea Karim 785 at http://www.wisebread.com