More Government Incompetence On Parade And Tax Follies

Remember that promise of a 'tax cut' of $250 from earlier in the year?  Yeah, um, they botched it:

The AP reports today that one of the centerpieces of Barack Obama's middle-class tax cut will wind up looking like a tax increase next April 15th.  A $250 rebate did not get structured properly, and up to 15 million recipients — mainly seniors — will end up owing more money because of a double-dip that went unaccounted:

More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit. …

Most workers started receiving the credit through small increases in their paychecks in April. The tax credit was made available through new withholding tables issued by the Internal Revenue Service.

The withholding tables, however do not take into account taxpayers with multiple jobs or married couples in which both people work. They also don't take into account Social Security recipients with jobs that provided taxable income.

The bottom line is that the federal government once again displayed its complete and total lack of competence, distributing this tax 'cut' -- in reality, it was simply a tiny bailout or buyoff of senior citizens -- twice to millions of people.  I wonder how many of them are going to have to eat dog food because they'll have to pay that money back...

I'm also curious as to how people who believe the government should run health care think they will do that better than simple programs like this.

Anyway, Hot Air finishes with this:

The AP tries to soft-pedal the impact:

For many, the new tax tables will simply mean smaller-than-expected tax refunds next year. The average tax refund this year was about $2,800.

Uh, sure — and for many, it will mean paying more out of pocket, too.  This follows on the revelation that the Cash for Clunkers subsidy will be considered taxable in several states, which will come as a shock to some of those 700,000 who decided to take advantage of the program.  When it comes time to do taxes next year, millions of middle-class people will get a couple of gentle reminders of this administration's incompetence.

Yep, that should be shortly before the primary season really ramps up.  Cool.

Look, the sooner people realize that no Democrat in the past forty years has actually cut taxes on a significant and national level, the sooner they'll realize the reality of who does a better job of putting money back in your pocket.  Sure, the Republicans have had plenty of failures in that same time period, too.  But which would you rather deal with, elected reps who have increased your taxes half of the time and cut your taxes the other half of the time, or elected reps who have increased your taxes 100% of the time?

Speaking of which, did you know that the ObamaKennedyDeathCare bill that passed the House contains a 69% increase in the capital gains tax?  The last time such an increase occurred was in 1986, and here's how that worked out:

The 1986 experience was not a happy one. Tax revenues from capital gains surged before the increase took effect in 1987, as investors moved to cash in at the lower rate. Revenues then plummeted. Total realized capital gains didn't again reach their 1985 level of $172 billion until 1996. By 1992, the federal government was barely getting more in revenue ($29 billion) at the 28% rate than it did in 1985 ($26.5 billion) at the 20% rate.

Rate reductions, as in 2003 when Republicans cut the rate to 15% from 20%, have typically had the opposite effect. Treasury receipts from capital gains climbed to an estimated $117.8 billion in 2006 from $49 billion in 2002.

But, with Democrats in charge, there is literally no practical reason to think tax rates like the capital gains rate will go anywhere but up.

On another tax-related note, the Democrats are talking loudly about creating jobs right now (even though they're doing nothing remotely resembling actual job creation).  There's a tax that could easily be eliminated very soon that would provide 1.5 million jobs: the Death Tax.  Will they do it?  Well, how does the Democrat track record of lowering taxes and creating jobs look?

[crickets]

The sooner these radical Leftist Democrats get thrown out of power, the sooner this country can get back to prosperity.  Until then, it's just not going to happen.

There's my two cents.