February 6, 2008 by Tom Armstrong.

Economic czar wanna be, Hillary Clinton, has touted her plan to save deadbeat borrowers from those malicious, overpaid and repugnant fat cats–most of us more rational, non-vote-seeking individuals prefer to call them bankers. (Full disclosure: I used to be one of those “fat cats.” Now I’m just a public school teacher. Yes, by the way, I get the irony of being a public servant and also being a Rand-like libertarian.) Of course, she’s proposing to bail them out with everyone else’s money (yet she’s taking credit for the gifts; like most politicians, she likes playing the role of Santa). Mankiw links to this article criticizing the Hillary plan, and it’s a pretty good analysis.

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February 6, 2008 by Tom Armstrong.

Unless Congress acts, the following tax increases* will automatically occur for the following tax-years:  

2008:

• The exemption for the Alternative Minimum Tax (AMT) will decrease from $44,350 to $33,750 for single filers and from $66,250 to $45,000 for married couples filing jointly.

• Taxpayers will not be allowed to deduct their state and local general sales taxes from their federal income tax. 
  
• Taxpayers will not be able to adjust their income for qualified tuition and related expenses.
• Businesses will not be able to claim a tax credit for research, experimentation, and development activities.
• First-time homebuyers in the nation’s capital will no longer be able to claim a tax credit.

2009:

• Taxpayers will no longer be able to claim a tax credit for certain residential energy efficient property, a tax credit for the construction of new energy efficient homes, or a tax deduction for energy efficient commercial building property.

2010:

• The Section 179 business expensing cap will decrease from $128,000 (plus inflation after 2008) to $25,000, and the starting point for the phase-out of this deduction will decrease from $510,000 (plus inflation after 2008) to $100,000.

2011:

• The marginal income tax rates will increase as follows:
  •  
    • –35% bracket will increase to 39.6%
    • –33% bracket will increase to 36%
    • –28% bracket will increase to 31%
    • –25% bracket will increase to 28%
    • –10% and 15% brackets will condense to 15
• The capital gains rates for individuals will increase from 15% and 0% to 20% and 10%.
• Dividends will no longer be taxed at the capital gains rates for individuals, thereby increasing the double taxation of dividends by as much as 62%.
• The standard deduction for couples as a percentage of the standard deduction for singles will decrease from 200% to 167%–restoring the marriage penalty.
• The top end of the 15% marginal income tax bracket for couples as a percentage of the top end for singles will decrease from 200% to 167%–restoring the marriage penalty.
• The child tax credit will decrease from $1,000 to $500.
• The “death” tax using the “stepped up” basis will return with a 55% maximum rate (including surtax) and a $1 million exemption, after years of decreasing “death” tax rates, increasing exemptions, and one year using the “carryover” basis to calculate the tax due.

HT: Club for Growth

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February 6, 2008 by Tom Armstrong.

This study of income mobility in America is often cited, and it’s certainly worth reading.

HT: Mark Perry, who says:

It’s truly remarkable and extraordinary that more than 2 out 3 Americans born a generation ago have already surpassed their parents’ income, and more than 4 of every 5 Americans born to parents in the bottom fifth during the late 1960s and early 1970s are better off than their parents. Do you think that was ever the case at any other time in history like the 5th Century, 10th Century or 15th Century? Not likely. It’s probably true that just being alive in the 21st Century, especially being alive in the U.S., you’ve “won first prize in the lottery of life.”

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February 6, 2008 by Tom Armstrong.

A state-by-state list of last night’s winners and losers.

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