12/20/10 Stockholm, Sweden – This past Friday, President Obama signed the kind of law that makes everyone happy… an extension of the Bush-era tax cuts. It’s a deal Republicans like because it keeps income, dividend, and capital gains tax rates relatively low for another two years. While Democrats like it for its extension of unemployment benefits, reduction of Social Security payroll taxes, and extension of tax credits for children, college tuition, and a variety of other items.
Perhaps best of all, as you can below, this unique win-win piece of legislation — that’s designed to make absolutely everyone happy — also makes the deficit leap with joy…
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
The Daily Reckoning is your premier source for making sense of the news Washington and Wall Street generate. Each business day, The Daily Reckoning calls on its stable of world-class writers and thinkers to show you how to get ahead.
Start your 100% FREE subscription to The Daily Reckoning today and you’ll get a free research report, “How to Survive the Fall of Social Security.” Simply enter your email address below to get your free report and join over 495,000 worldwide Daily Reckoning subscribers!
We Respect Your Privacy and We will
Never Share or Sell Your Email Address
The typical Third World government grab includes “nationalizing” private pension plans. Social Security was originally “contributory” (not private) but was nationalized into a payroll tax. That “tax” accumulated over two trillion dollars in surplus. Of course, it has already been “nationalized” by its absorbtion into the “consolidated budget”. The last connection to legitimacy is the so-called payroll tax–which is being reduced. Social Security is now becoming a mere welfare “entitlement” like food stamps.
Good article, though I would hardly call the current tax rates “low”. They may be at the “Laffer Peak” (the rate at which the government tax take is highest) or even higher.
Certainly, the current tax rate is not friendly to entrepreneurs (you know, the people whose risk-taking produces innovative new products–and jobs) and capital accumulation (you know, savings, the prerequisite for growing the real economy).