Tax Bill: Obama to Sign Tax Legislation

tax bill

Moving at almost the speed of light in terms of Washington time, Congress has passed and sent tax legislation to President Barack Obama for his signature.

The $801-billion package includes $57 billion to extend unemployment benefits and also extends tax cuts for wealthy and middle class Americans. The bill also includes a break on payroll taxes for most Americans that legislators hope will spur growth in the economy.

The House passed the bill by a vote of 277 to 148 after Liberal Democrats tried and failed to remove the tax breaks for the wealthiest Americans.

"It's a huge giveaway to the super-rich in tough economic times," said Representative Jim McDermott, Democrat of Washington.

President Obama may have gotten the best out of a bad deal. Without the legislation, taxes would have increased for everyone at the end of the year, and millions of Americans who can't find work because of our sluggish economy, will at least have some money over the next year.

In addition, the White House says the legislation will be beneficial to African-American families. For example, 2.2-million black families and 4.7 million children will benefit from an extension of the earned income tax credit and child tax credit. Approximately 1.1-million African Americans will benefit from the extension of unemployment benefits for 13 months. The unemployment rate for African Americans stands at 16 percent.

The bill, however, exposes all that is wrong with the economic policies coming out of Washington.

The legislation that Obama signs still functions under the belief that Americans can spend their way out of the economic slump. We keep putting money back in the pockets of Americans to spend to boost the economy, and while that may work when it comes to people buying basic goods like food and making home repairs, it's clear that Americans have not learned the most important lesson from the economic bust of 2008: living beyond your means is a risky proposition.

It also operates under the belief that trickle down economics actually works. In other words, the false belief that tax cuts to the wealthy will actually create jobs and spark the economy is a myth still being pushed at the highest levels by Republicans.

"I don't see how the Republicans win that argument," Obama said. "I don't know how they're going to be able to argue that extending permanently these high-end tax cuts is going to be good for our economy when, to offset them, we'd end up having to cut vital services for our kids, for our veterans, for our seniors."

This country is also in denial about the deficit. It's clear that bad fiscal policies by the Bush Administration helped reinstate our deficit. While Republicans keep pushing the need to eliminate the deficit, they don't want to take simple steps, such as eliminating tax breaks for people who already have plenty of money, that will help reduce our deficit in the long-run.

Obama deserves credit for not playing politics with the lives of Americans. Agreeing to this bill had some real political risk for the president; however, this bill only delays the long-term decisions Americans need to make to improve our economy. Now would be a good time to commence the debate, but I'm not holding my breath.