Tax Implications Of Bailout And Elections
opinion Essay
1421 words
Tax Consequences of Economic Failures
June 13, 2007 is the day that Richard C. Cook claims in his article, “It’s Official: The Crash of the U.S. Economy Has Begun.” In the past couple of years, months, and weeks, the United States economy and stock market showed significant failures and inefficiencies to the world. Perhaps the greatest evidence signaling the recent economic meltdown is the subprime mortgage problems that started a little over a year ago. The burst of the U.S. housing market bubble was caused by a combination of risky lending and borrowing practices and higher interest rates coupled with dropping housing prices, making refinancing more difficult. To deepen the drama, Wall Street’s excessive debt and unsustainable practices became more and more transparent. There was and still is tremendous turmoil amongst the Wall Street mammoths and the drama is certainly no longer entertaining or cheap.
The tax consequences from these economic failures are difficult to measure. However, Washington Post’s Steven Pearlstein estimates that “falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes… as revenue from capital gains taxes decline.” Furthermore, “the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption.” Congress and the Bush administration passed an economic stimulus package on February 13, 2008 and the U.S. Federal Reserve cut interest rates in hopes to address and mitigate liquidity and credit problems. The stimulus package includes tax rebates to low- and middle- income U.S. taxpayers of $300 per person and $300 per dependent child under the age of 1...
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...ve further research and evaluations are needed to decide on which candidate really has the better tax plan for the United States as a whole.
Works Cited
"Economic Stimulus Act of 2008." Wikipedia, The Free Encyclopedia. 13 Oct 2008, 00:09 UTC. 14 Oct 2008 .
"Emergency Economic Stabilization Act of 2008." Wikipedia, The Free Encyclopedia. 12 Oct 2008, 00:33 UTC. 12 Oct 2008 .
“Liberty Tax Examines the Emergency Economic Stabilization Act of 2008/$700 Billion Bailout.” Liberty Tax Service. 13 Oct 2008. 13 Oct 2008.
“Obama and McCain Tax Proposals.” A.E. Feldman Blog. . 21 Aug 2008. 14 Oct 2008.
In this essay, the author
- Analyzes how the subprime mortgage problems signaled the recent economic meltdown. the burst of the u.s. housing market bubble was caused by risky lending and borrowing practices and higher interest rates.
- Explains that the tax consequences from these economic failures are difficult to measure. falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes.
- Describes the emergency economic stabilization act as a much-needed economic boost to jump-start both confidence by protecting the financial system and getting credit flowing again.
- Explains the extension of mortgage debt forgiveness relief to 2012: cancellation of debt will not be treated as taxable income and no taxies will be levied on discharges of up to $2 million (married filing jointly) and $1 million
- Proposes extending alternative minimum tax relief to 2008: exemption amounts of $69,950 (married filing jointly) and $46,200 (single and head of household).
- Explains that child tax credit refundable up to 15% of taxpayer's earned income in excess of $12,050 but the floor falls to $8,500.
- Limits ceo compensation for banks and financial institutions participating in the bailout programs to a pre-set standard for executive pay; prohibit golden parachute payments from top 5 executives. compensation over $500,000 is not tax deductible.
- Explains that deducting tuition and fees for qualified higher education expenses is extended until 2009. educator expenses are deductible up to $250/year despite itemized or standard deductions.
- Explains that homeowners may deduct real-estate taxes as an additional standard deduction of up to $500.
- Explains that liberty tax extends and modifies energy tax credits until 2016; no longer have $2000 limit on solar electric property.
- Opines that the bailout was and still is necessary in our economy. the government handing over $700 billion dollars worth of cash that, although may be much needed in the economy, does not exist.
- Explains that as senator barack obama and senator john mccain run the race, one of the key issues they must address is taxation.
- Opines that obama should keep four lowest tax brackets, but restore 36% and 39.6% for income over $250,000.
- Compares obama's plans for a 20-28% tax on all profit from home sales and dividends for two highest tax brackets and retain current rates for all other taxpayers.
- Compares obama and mccain's proposals for inflation indexing and raising exemptions until they hit $143,000.
- Opines that senator obama has better plans to implement, but this is biased and hopeful thinking. further research and evaluations are needed to decide which candidate really has the better tax plan for the united states as a whole.
- Explains how the average tax bill could change in 2009 if either john mccain or barack obama's tax proposals were fully in place.
- Explains the "emergency economic stabilization act of 2008" in wikipedia, the free encyclopedia.
Related
- explanatory
- analytical
- argumentative
- U.S. Federal Government and Economic Issuesexplanatory essayPetruno, T., June 18, 2011, U.S. Economy: Federal Reserve: “More Fed Stimulus? - Don’t Count on It!” Copyright 2011, The Los Angeles Times http://www.latimes.com/business/la-fi-petruno-20110618,0,5811817.column
In this essay, the author
- Explains that they will write about the u.s. federal government operations and how government leaders handle macroeconomic issues in our economy.
- Explains that monetary policy is the regulation of money supply and interest rates to stabilize currency and control inflation.
- Explains that the u.s. federal reserve monitors and controls monetary policy, national income, price stability, recession, and inflation. top leaders are working better at applying inside time lags in economic policy.
- Explains that the monetary system conducts ‘trustworthy’ international trades with foreign countries to assure the value of the u.s. dollar.
- Cites anthony, p., ib economics: (section 3. 1-3.2) macroeconomics: national income and introduction to development, and (gdp image), 2011.
- Cites ensinger, d., "bill to repeal nafta stalled in the house," copyright 2007 economy in crisis.
- Explains that heffner, t., “unethical predatory practices,” copyright 2007 economy in crisis.
- Opines that more fed stimulus? - don’t count on it!
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In this essay, the author
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- Explains that the sixteenth amendment gave the federal government the power to collect income taxes on all americans. income tax rates started at 1% for individuals earning over $3,000, and 6% on incomes over $500,000.
- Explains that there is debate in congress as to the effectiveness of the current tax policies, and whether or not they hurt or help economic growth.
- Argues that lower tax rates would put more money back into the pockets of americans, increasing discretionary spending on goods and services.
- Analyzes how the federal government agrees on a yearly budget through senate and house appropriation committees and subcommittees. the divisions in congress are enough to infuriate most americans that pay any attention to the politics in washington.
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- Opines that the current economic situation shows signs of growth and unemployment is slowly creeping down. as americans gain more confidence in the future economic outlook, the economy should pick up even more
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In this essay, the author
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- Explains that the bureau of internal revenue was reorganized to make collecting taxes easier. the irs functions became streamlined to reduce the cost needed to collect income taxes.
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In this essay, the author
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In this essay, the author
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- Explains that the overinflated value of homes made middle-class americans feel richer than ever before in the years leading up to 2008.
- Explains that the buildup to the economic collapse began years before 2008 when the financial industry became increasingly careless and government regulation became lenient.
- Explains that the new era of deregulation began what is today known as the shadow banking system due to the prevalence of many nonbank financial institutions.
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In this essay, the author
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- Explains that the government levied high taxation on corporations to create the necessary funds needed to operate the "stimulus package." however, this took away jobs from the american middle class.
- Explains that mechanical workers are taking over the jobs that the middle class traditionally performed. highly educated and talented individuals perform the upper, middle and lower class jobs.
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- Explains that the middle class is at a disadvantage because they have to go thousands of dollars into debt hoping to find jobs to pay off their massive debt.
- Explains the decline of the middle class in america, which is the backbone of america's work force.
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1355 wordsRead More - How Did 9/11 Changed Americaanalytical essay...vailable for stimulus programs to boost the economy out of the 2008 financial crisis. This caused fewer jobs to be created, which meant less tax revenue and more debt.
In this essay, the author
- Opines that 9/11 was one of the most devastating events in american history. four hijacked passenger airplanes killed almost three thousand people.
- Explains that after 9/11, there was a great increase in security nationwide, including the tsa, dhs, ice, and the us coast guard.
- Explains that the tsa introduced better screeners and stricter in-scanning boarding passes to ensure the correct people get on the plane. checked bags have gone under more scrutiny since the 9/11 attacks.
- Explains that the tsa provided new procedures to make the airport safer, such as more accurate rules in allowing passengers into the gate section, and stricter lists in what is permitted to bring on a plane.
- Explains that the tsa provided an airport with better-groomed and trained staff that has proven to be more skillful than airport security was pre 9/11. officers are constantly tested by the use of tip (threat image projection software).
- Explains that 9/11 proved to airlines that terrorists can slip hazardous materials through airport security. the tsa continues to implement new technology and procedures to this day.
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- Explains that the department of homeland security was created after 9/11 to ensure a safe, secure, and resilient homeland against terrorism and other hazards.
- Explains that dhs requires airlines flying to the united states to provide advance passenger information and passenger name record (pnr) data prior to departure.
- Analyzes the impact of 9/11 on americans' feelings towards certain ethnicities. the majority of post 9/11 racism was directed towards muslims worldwide.
- Analyzes how the us increased immigration and deportation due to a lack of trust among foreigners. the country with the most notable drop in visa issuance after 9/11 was pakistan.
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- Explains that the increase budget made nation debt sky-rocket after the 9/11 attacks. without the "war on terror" it cost the us government approximately 1.5 trillion dollars.
- Opines that 9/11 and events like it are important, as they show us how to better our country.
1424 wordsRead More - The Federal Reserveexplanatory essayThe Budgetary Impact and Subsidy Costs of the Federal Reserve's Actions During the Financial Crisis. (n.d.). Retrieved May 21, 2012, from CBO: http://www.cbo.gov/publication/21491
In this essay, the author
- Explains the purpose and role of the federal reserve system. the act was signed by president woodrow wilson on december 23, 1913.
- Explains that the federal reserve maintains the stability and liquidity of the financial system by working towards low and stable inflation and encouraging growth in output and employment.
- Explains the federal reserve's responsibilities, including controlling inflation, conducting monetary policy, supervising and regulating banking institutions, and providing financial services to depository institutions.
- Explains the link between monetary policy and the economy through the market for balances held at the federal reserve banks.
- Explains that monetary policy has an effect on spending decisions by households and businesses. lower mortgage rates may encourage more home purchases based on affordability and refinancing.
- Explains that the federal reserve pays close attention to monetary policy to determine the operational target (federal funds rate) and the economy.
- Analyzes how the federal reserve reacted to a financial crisis by expanding lending to depository institutions, creating new lending programs for non-depository and other institutions and shifting the composition of liabilities.
- Explains that the deposits were more than expected due to an increase of earned income on securities holdings. the federal reserve system takes risks because it expects to earn more money than the interest paid on the debt.
- Cites amadeo, k., and oliveri, g. (n.d.). the federal reserve system, purposes and functions.
- Explains the federal reserve act of 1913 and its budgetary impact and subsidy costs during the financial crisis.
2066 wordsRead More - Did President Obama Take Necessary Steps to Take the United States out of the Great Recessionargumentative essayDespite the major efforts of the expansionary monetary policy of Federal Reserve program (Quantitative Easing) to prevent the banking system from collapsing (2), the economic crisis took its devastation toll. The monetary policy had done all it could setting in motion the $700 billion bank bailout bill on October of 2008. The bill established the Troubled Assets Recovery Program (TARP) in order to instill confidence in the distressed banks and financial institutions (3). Keynesian economics became the centre of attention and in 2009 president Barack Obama introduced the fiscal stimulus plan of 840 billion dollars called the American Recovery and Reinvestment Act (ARRA) (4), a plan which would rescue the country over the period of 10 years, the majority though would have to be spent in the first three years to increase short-term aggregate demand. The stimulus plan had three main components: tax cuts for families and small businesses with a budget of 290.7 billion dollars; help for the unemployed and those i...
In this essay, the author
- Explains that the president of the united states turned to friedrich a. von hayek and set off hints of austerity in motion.
- Concludes by pointing out where the us is now after the different measures of stimulus and austerity have taken place. the congressional budget office stated that the stimulus program added millions of jobs and boosted the country’s gdp.
- Argues that president barack obama has taken the necessary steps to take the united states out of the "great recession" by combining fiscal stimulus and hints of austerity.
- Explains that the bureau of labor statistics' unemployment rate is available at http://data.bls.gov/cgi-bin/surveymost.
768 wordsRead More