Do you want a middle-class tax cut?

If you know me (and I don't flatter myself: you probably only read this blog if you know me), then you are middle class, or even "working class" (read: the verbotten words "lower class").

Do you want a tax cut?

See, here's the thing: I would take a tax cut, but I don't need a tax cut. If the nation is in such dire financial straights, I'll give up my tax cut to ease the deficit and still spend money. After all, we have a steady income: I can still shop. And the tax cut wouldn't represent enough money for me to buy a new car or anything. It would amount to - what? - $100 a month? What are we talking about here?

The tax cut aspect of the Obama Administration's proposed economic stimulus package is pretty fuzzy - as all tax cut plans seem to be - and is steeped in politics from both sides of the aisle. Personally, I'm more interested in seeing significant infrastructure spending. I've been bitching about that forever. But Professor Krugman makes a good arguement in yesterday's Times:

...there’s a problem with a public-investment-only stimulus plan, namely timing. We need stimulus fast, and there’s a limited supply of “shovel-ready” projects that can be started soon enough to deliver an economic boost any time soon. You can bulk up stimulus through other forms of spending, mainly aid to Americans in distress — unemployment benefits, food stamps, etc.. And you can also provide aid to state and local governments so that they don’t have to cut spending — avoiding anti-stimulus is a fast way to achieve net stimulus. But everything I’ve heard says that even with all these things it’s hard to come up with enough spending to provide all the aid the economy needs in 2009.

What this says is that there’s a reasonable economic case for including a significant amount of tax cuts in the package, mainly in year one.

I don't know about that. Because we need as much economic stimulus as we can get, you think a middle class tax cut that will not be spent, but saved, is something we HAVE to do? I'm not convinced.

By the way, you are still OBLIGED to read Krugman as long as this financial crisis persists. If you haven't, DO IT.

Bush Admin's bait and switch

See this big shiny thing here?! Over here! The humongous $700 billion "bailout bill" that is going to scare the crap out of you?? Pay close attention to it! Very close!

... And don't notice this $140 billion bank giveaway that we're going to do while you aren't looking.

This gem from yesterday's Washington Post made me so angry I had to wait until today to even write anything about it. Here are some key details about what the Administration took from our Federal coffers and gave away to our shambles of a banking system:

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

..."It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

...No one in the Treasury informed the tax-writing committees of Congress about this move, which could reduce revenue by tens of billions of dollars. Legislators learned about the notice only days later.

DeSouza, the Treasury spokesman, said Congress is not normally [my emphasis] consulted about administrative guidance.

Because, you know, the circumstances we're now in are just, you know, normal.

McCain the Socialist/Communist

So who said the following: Barack Obama or John McCain?  

I believe that when you really look at the tax code today, the very wealthy, because they can afford tax lawyers and all kinds of loopholes, really don't pay nearly as much as you think they do when you just look at the percentages. And I think middle-income Americans, working Americans, when the account and payroll taxes, sales taxes, mortgage pay -- all of the taxes that working Americans pay, I think they -- you would think that they also deserve significant relief, in my view...

If you said John McCain you would be CORRECT.  That's the John McCain of 2000 - remember him? - answering a citizen's question on Hardball.

I know.  I know.  Isn't that that pesky "spreading the wealth" that McCain and Palin are up in arms over?  Well, sure!  But this is an election year, and apparently that means McCain's job is to demonize others for things he actually believes in.  

Think that's taken out of context?  To hear McCain say specifically that this is NOT socialism, read the full transcript here.