Posted by Jason | Posted in Government | Posted on 05-11-2009
The Senate, including Republicans, continue to alter incentives by passing tax cuts and tax increases. In other words, favors and punishments. And people whine about lobbyists. Well, of course, big companies are going to send lobbyists to Washington. Don’t you want to get the favors? If you don’t your going to get the punishments.
So let’s see how some of this effects the market. I’m guessing senators passed this without a care in the world about it’s effects.
Senate Alters Taxes for Big Companies
By JOHN D. MCKINNON and LAURA SAUNDERS
WASHINGTON — The Senate on Wednesday passed legislation that would give tax breaks to big companies hit by the recession and expand a credit for homebuyers, while raising other corporate levies, particularly for multinationals.
The Senate has passed a bill extending unemployment benefits and the popular tax credit for homebuyers. It also includes proposed tax increases to offset the costs that may be hard for some businesses to swallow. WSJ’s John McKinnon explains.
The senate passes the tax credit for homebuyers again. We are in the midst of a collapse in housing because of easy money by the Fed, which they are doing again, and because the government’s push for “everyone should own a home” social engineering. So what does the Senate do? Just more of the same. Incentivize people to buy houses. If it is in the homebuyer’s best interest to buy a home, they will do so without the government. Incentivizing them changes the behavior of purchasers and will make people who otherwise wouldn’t have purchased a home purchase one. This is what happened during the housing boom that led to this mess.
“We clearly are going to have tax increases going forward,” said Bruce Josten, executive vice president of the U.S. Chamber of Commerce.
The latest changes to business taxes are contained in a measure that would extend unemployment benefits by as much as 20 weeks from the current 79 weeks. In a bid to aid the property market, the bill would also extend for five months a tax credit for homebuyers, and expand it beyond first-time purchasers. That move is estimated to cost about $10.8 billion over the next decade.
So, we are going to extend unemployment by another 20 weeks. What does this incentivize? You can go without work for almost two years. Does the Senate believe that this doesn’t effect peoples behavior? Surely, many people won’t even attempt to look for a job for over a year and a half if they have two years before they are without money. Also, unemployment insurance is insurance. You pay for unemployment insurance in the event of losing your job. Those people who now are going to have checks rolling in for two years did not pay enough in for the two year pay off. So, who pays for this? That’s right. The productive workers of society have to pay to cover the difference. That’s real motivating for those who are producing and keeping this country afloat.
The Senate on Wednesday approved the measure 98-0. The House was expected to pass the measure quickly and send it to President Barack Obama.
I’m sure glad this was unanimous. Goes to show we don’t have one intelligent politician in the bunch.
House Democrats, led by Ways and Means Committee Chairman Charles Rangel, shown in February, still seek a full corporate-tax overhaul.
Hey, let’s have someone write the tax laws who doesn’t even follow the laws himself. Genius!