With all the talk and rhetoric floating around about the tax credit extension bill I can’t as an accountant not say something about this issue. For this bill has become a political football that is being kicked around for no other reason than to gain some political goal or objective without any regarded for what is really involved. It’s a case of trying to make someone or some group look bad and thus garner a supposed political advantage in the next election.
This needs to stop while we really look at what is happening in our economy and what the passage or failure of this bill means. To do that requires that we forgo the ideology for a moment. The question of is it a good idea to have tax cuts when we have record debt? Or are the rich entitled to share in tax cuts given to the average American? And are tax cuts in general just another form of social welfare system? Are all important questions and need to be understood and worked out.
But not right now!
For at this unique economic time in American’s history I can only say that to not pass some kind of tax cut extension bill will be terrible for the economy and for either party to play politics with this is inexcusable. This issue isn't about Obama nor the Republicans or the Democrats. It’s not even about income taxes or if our country is becoming a Socialist State.
It's about if the average family in America right now can stand an additional 2 to 3 thousand dollar increase in tax liability. This is especially true for those who have recently lost jobs and would be paying such an increase for their 2010 taxes from the unemployment they will be receiving in 2011 when it's due.
As an accountant and a tax preparer I would caution those of you who are rooting for this bill to fail to check and see just what it will probability cost you. Your feeling about this issue may well change when you realize that a family with three children that has been receiving the child tax credit on those children and had a refund in 2010 (for their 2009s return) of 2 thousand dollars will with no other factors figured in will owe around 1 thousand dollars in additional taxes come April 15th 2011 due to the loss of just this one credit.
I can't see how that can be good for the tax payer or our economy right now to be reducing income many need just to survive. And for those who have lost jobs and will be paying this out of unemployment it will be a disaster. With foreclosures rising, housing prices falling, and unemployment at record highs not to continue these tax cuts until the economy recovers much more that it has now would be a reckless experiment in economics.
So let's understand the full result of this measure failing. Americans, many unemployed and expected to stay that way for some time to come, would face an additional cut in disposable income at a time they need that income more than any time I can remember.
Can anyone in good conscience watch as our friends, neighbors, and relatives suffer further economic hardships all because they want some person, party, or ideology to be made to look bad. I would hope not but that is just what may happen as the good of America and Americans seems to be taking a back seat to partisan politics of unimagined cruelty for those already in economic distress.