Understatement of the Year Award

From Bloomberg Business Week:

It’s a Great Time to Be Rich

“If the tax cuts become law, the next two years will be the best in living memory for many wealthy Americans to shield their income and fortunes “

A bonanza of new and extended tax benefits could make it as easy as ever for the rich to stay that way.

Under legislation approved by the U.S. Senate on Wednesday, Dec. 15, and now moving on to the House, savvy wealthy Americans would be able to capitalize on an environment in which their tax rates on income and investments remain at historic lows. Also, new rules would make it possible to pass on fortunes to heirs with less fuss and lower taxes than all but a brief period of the past 80 years. It’s a far cry from the 70 percent bite the federal government took out of the largest incomes and estates as recently as 1980.

“The climate we’ll have after this legislation is extremely favorable for wealthy families,” says Jeffrey Cooper, a professor at Quinnipiac University School of Law and a former estate planner who has studied the history of U.S. tax law.

The article goes on to list the incredible list of give aways to people that don’t need it in the Tax Cuts for Billionaires Act.    Here’s one salient point to think about while eating your daily gruel and waiting for the debtor’s prisons and poor houses to re-open so you’ll have some place to go when the banks seize your home illegally .

The good news for the rich starts with income tax rates, which for top income groups would remain 35 percent , a rate enacted by former President George W. Bush in 2003. Except for a period from 1988 to 1992, the top tax rate has never been this low since 1931.

Happy Days are here again if you’re part of the investor class too!  I’m getting nostalgic for Nixon.  That says something, doesn’t it?

For the country’s wealthiest families, income from wages can be far less important than income from investments. According to a Tax Policy Center analysis of 2006 returns, 18.1 percent of all Americans’ cash income comes from business ownership or capital investments, compared with 64.5 percent from labor. For those in the top 1 percent of earners, however, business and capital income make up 53.6 percent of income and labor accounts for 35.3 percent.

Thus, Cooper notes, taxes on capital gains and dividends can be far more important to the rich than income tax rates. The tax compromise extends a 15 percent top tax rate on long-term capital gains and dividends enacted in 2003, which is the lowest rate since 1933. The top capital-gains rate was 77 percent in 1918 and, since 1921, its highest point was 39.9 percent in 1976 and 1977—though certain gains could be excluded from taxation.

No wonder Charles Krauthammer’s red face is all aglow with the spirit of the season!!  It’s just not the prunes and the eggnog!!

How can any one defend this administration and its policies as being anything the worst of Reaganomics?  At a time when we are seeing record long term unemployment, record foreclosures, record numbers of home owner’s with underwater mortgages, this is what we get.  The same folks that benefited from all those bail outs from their failed business decisions and failed investment strategies are being subsidized again.

How can any Democratic congress critter go home and face any of their middle and working class constituents knowing full well they sold their souls to the Obama Company Store.  I’m more convinced than ever that this country is in banana republic territory.  Next step will undoubtedly be removing what little of the safety net was left in place after Reagan hit the country.   After all about one half of U.S. children will most likely be on food stamps at some point in their life. Afterall, they could be out selling matches in the street!!  And It’s Christmas time!  Why not recreate Dickensian poverty? I’m sure we could use a few child work houses too!  After all, it would contribute to the bottom lines of the people that really matter in this country!!

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