How Happy Is the Blameless Vestal’s Lot!

JIM LEHRER: So, the Obama administration shouldn’t accept — or doesn’t deserve any blame for what has happened over the last two years to try to dig this out and for things not to have happened quicker?

TIMOTHY GEITHNER: Think of the way — again, I’m not the right person to ask about politics, Jim, but think about what the dominant debate has been over this country for much of the — at least the first part in ’09, which was that the administration was doing too much for the economy too quickly.

What the president did was absolutely essential. Nothing would have been possible without it. Without the president of the United States and the Federal Reserve acting aggressively to stop an economy in freefall, help put out that financial fire, nothing would have been possible.

Now, you can look back — and people will look back over time — to say, could you have found a way politically to do more? It’s hard to know the answer to that question now. But you can see the president of the United States acted with extraordinary speed and a lot of political courage, because he knew that all the things necessary to start to arrest that crisis, repair the damage, were going to be politically unpopular, difficult to do, and he was willing to take that risk, as he should have been, because that was the responsible thing to do.

VIRGINAL TRANSLATION: No, we don’t deserve any blame, Jim. In fact, we did TOO much, TOO fast, damn our eyes, and probably deserve some sort of sugary, high calorie dessert or a week in Martha’s Vestal Vineyard instead. Maybe a game of Herocles’ Horse with LeBron of Lyceum, but no blame! And trust me, you can take THAT to the Barack Bank.

5 Responses to “How Happy Is the Blameless Vestal’s Lot!”

  1. Gary from Jersey says:

    Here’s how they plan to fix it, via Kiplinger:

    By Joan Pryde
    Senior Tax editor, Kiplinger letters

    On January 1, 2011, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves. Here’s what happens in three waves:

    First Wave:

    Expiration of 2001 and 2003 Tax Relief:

    In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on Jan. 1, 2011.

    Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise.

    Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.

    The full list of marginal rate hikes:

    • The 10% bracket rises to an expanded 15%
    • The 25% bracket rises to 28%
    • The 28% bracket rises to 31%
    • The 33% bracket rises to 36%
    • The 35% bracket rises to 39.6%

    The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

    The return of the Death Tax.

    This year only, there is no death tax. (It’s a quirk!) For those dying on or after Jan. 1 , 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account , could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax.

    Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?

    The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

    Second Wave:

    There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

    The “Medicine Cabinet Tax.” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

    The “Special Needs Kids Tax.” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.

    There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education.

    Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year. Under tax rules, FSA dollars cannot be used to pay for this type of special n eeds education.

    The HSA (Health Savings Account) Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

    Third Wave:

    The Alternative Minimum Tax (AMT) and Employer Tax Hikes. When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise – the AMT won’t be held harmless, and many tax relief provisions will have expired.

    The major items include:

    The AMT will ensnare over 28 million families, up from 4 million last year.

    According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

    Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”

    Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.

    Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.

    Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.

    And worse yet?

    Now, your insurance will be INCOME on your W2’s! One of the surprises we’ll find come next year, is what follows – – a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished!

    Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that’s a private concern or governmental body of some sort.

    If you’re retired? So what… your gross will go up by the amount of insurance you get. You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That’s what you’ll pay next year. (This, supposedly, is NOT TRUE. You won’t be taxed on said amount until 2014. Presently King Obummer is just building a record base for when “one stop med ins” gets put into place. Doesn’t that make you feel better?)

    For many, it also puts you into a new higher bracket so it’s even worse. This is how the government is going to buy insurance for the15% that don’t have insurance and it’s only part of the tax increases.

    Not believing this??? Here is a research of the summaries…..

    On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 “requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”

  2. Shoulda thrown his ass in jail.

  3. tree hugging sister says:

    A BEAUTIFUL sentiment, LC. Especially after Gary’s research bummer.

    Oh, excuse moi ~ Recovery Summer! Lemon AID, anyone?

  4. major dad says:

    I’m screwed.

  5. Gunslinger says:

    Everyone’s screwed (execpt for the robber barons who forced this monstrosity down our throats).

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