Editor’s note: This op-ed by Don Keelan, a CPA from Arlington, first appeared in the Bennington Banner.
Based upon recent comments from Vermont’s congressional delegation, one begins to think the delegation would be more welcoming to America’s arch enemies than to America’s most wealthy.
Their constant vilification of the so-called rich is relentless—they do it individually and in consort. The current debate in Washington to revamp parts of the expiring tax code sections has raised the vitriolic sentiments that Senators Leahy and Sanders along with Congressman Welch towards those Americans who happened to be wealthy. I thought I resided in Vermont, not 1917 Russia!
Senator Leahy’s statement on President Obama tax compromise, as reported in a recent Banner article was,
“I am first and foremost a Vermonter and I will express my Vermont values. This deal is wrong for most Vermonters and it is wrong for our country.”
With all due respect to our 40 plus-year career senator, he is wrong on two counts.
I had been under the distinct impression that we were Americans’ first and foremost—or is it because I’m a transplant to Vermont that I had missed the point when I had taken the Freeman’s Oath, some 20 plus years ago?
With respect to the 2nd count, “this deal is wrong for Vermonters”, that is not so when you look at the specific provisions that President Obama has put forth:
1) Lower the payroll tax on social security, from 6.2% to 4.2%, for 1 year (capped at $106,000).
2) Maintain the 15% tax on dividends for 2 years.
3) Maintain the 15% tax on long-term capital gains for 2 years.
4) Extend the $1,000 child credit and expand the earned income tax credit for larger families.
5) Keep in place the higher-education tax credit.
6) Extend the unemployment insurance benefits for 13 months.
7) Keep 21 million taxpayers from being blind-sided by the Alternative Minimum Tax (AMT).
8) Bring sanity, clarity, and resolution to estate taxation by taxing estates over $5 million at 35% and provide a full exemption to estates below that amount.
9) Allow businesses to write off new equipment acquisitions, 100% the 1st year and 50% the second year.
10) Keep in place for two years the existing tax rates, capped at 35%.
One does not need to be an economist or a CPA to realize that the above tax provision changes will go a long way to help not only Vermonters but most Americans. Nevertheless, if one pays attention to the rhetoric from our Washington delegation it is only the “millionaires and billionaires” who will reap any benefit.
Our congressional delegation does us a disservice and is disingenuous. Vermont workers and its large community of retirees along with our concentration of out of work citizens will be the beneficiaries of the president’s proposal. And let’s not ignore the large number of small businesses and farms that will gain relief from not having to sell their property to satisfy an estate tax that would go into effect on Jan. 1, 2011, for estates valued in excess of $1 million.
There are however two flaws in the president’s proposal:
1) Its term is not long enough; two years does not provide consistency for businesses to know if they should invest in capital improvements.
2) The cost of the proposal should have been offset by cutting federal expenditures thereby not adding to the Federal deficit. This by the way will be an issue for many states where the tax laws are linked to the Federal Tax Code.
Congress had nine years to work on revising what has been referred to as the “Bush Era Tax Cuts”—and they didn’t. And since January 2007, the Democrats have been in control of Congress—so why now, with two weeks to go? Congress and the Obama administration are in a panic and will be rushing to pass a major piece of Legislation that will surely have significant flaws.
Senators Sanders, Leahy and Congressman Welch, you are supposed to be leading our country—collectively, with 60 plus years in Washington, one would have expected more—is it any wonder that the American’s approval rating for Congress can’t get above 20%?
