We listen so you don't have to.
Listeners to Bob Ehrlich’s radio show this Saturday got a startling lesson in Ehrlich-nomics: According to the former governor/maybe governor Senate governor candidate, low taxes for low and moderate income Marylanders are “a problem,” “not very good for democracy,” and “bad economics,” and should be raised.
Ehrlich’s rather revealing comments were triggered when a caller asked Ehrlich what he thought about “the fact that almost half of working Americans have no obligation to the federal government.” Ehrlich responded, “That’s a problem. Because the more people do not have sort of a piece of the pie, and have something at stake, it’s not very good for a democracy…. It’s not wise and it’s bad economics. We saw – we talked about it last week – the article in the Wall Street Journal last Friday about the missing Maryland millionaires.”
Of course it’s a myth that half of working Americans don’t pay federal taxes – the vast majority of workers pay at least some federal tax, most notably payroll taxes – but it’s true that, due largely to tax cuts contained in President Obama’s stimulus package, a significant portion of middle and lower income Americans do not owe federal income tax for 2009 and hence have a low federal tax burden.
Frankly, we think this is a good thing, especially during a global recession.
We actually thought Ehrlich would support a middle class tax cut, too – until we remembered the $3 billion in tax increases he imposed as governor, and the middle class tax increase he proposed last year.
We don’t know whether Bob Ehrlich wants to soak the middle class just to finance his planned millionaires’ tax break for his special interest cronies, or to finance even more big spending, or both. But we do think he should come clean with his “TEA party” friends. After all, lest Bob forget, “TEA” stands for “Taxed Enough Already.” Or maybe Bob thinks those protesters are all millionaires.
The relevant exchange is transcribed below:
Caller: What do you make, in the broader, socio-political economic sense, the fact that almost half of working Americans have no obligation to the federal government every year now, and soon it will be over 50 percent?
Ehrlich: That’s a problem. Because the more people do not have sort of a piece of the pie, and have something at stake, it’s not very good for a democracy, and – what’s the great Margaret Thatcher quote – ‘Socialism’s great until you run out of other people’s money,’ right?
Caller: Yep. I think someone needs to have the courage, though, to run on the fact that we all need to invest in the government, not just the top half of the economy. Not that it’s not fair; it’s not wise.
Ehrlich: Well it’s not wise and it’s bad economics. We saw – we talked about it last week – the article in the Wall Street Journal last Friday about the missing Maryland millionaires.
House Passes Kratovil’s Small Business Tax Relief Proposal
HIRE Act includes Kratovil-authored language to cut taxes on small businesses
Date: 3-4-10 – For Immediate Release
Contact: Kevin Lawlor, 202 225 5311
Washington, DC – Today, the House of Representatives passed a bipartisan jobs package that includes a small business tax relief proposal authored by Rep. Frank Kratovil. The Kratovil proposal, which he introduced last October as the Small Business Property Reimbursement Act, rewards small business owners who make capital investments in their businesses, doubling the maximum tax write-off for the purchase of new capital equipment made in 2010.
“Our number one priority must be getting Americans back to work,” said Rep. Kratovil. “For small business owners who are looking at ways to expand their businesses and hire more workers, this tax incentive will encourage them to make the investment now instead of waiting for the future. Instead of billion dollar bailouts for big banks, this is a smart, market-based approach to encouraging job creation by focusing on small businesses.”
Kratovil’s proposal extends Section 179 of the tax code, doubling the amount small businesses can immediately write off their taxes for capital investments and purchases of new equipment made in 2010 from $125,000 to $250,000. In addition to the Kratovil tax relief provision, the jobs package passed by the House Thursday includes a tax holiday for businesses that hire unemployed workers and an income tax credit of $1,000 for businesses that retain these employees. Additionally, the bill will provide an extension of the Highway Trust Fund that will allow for tens of billions of dollars in infrastructure investment and provisions that will make it easier for states to borrow funds for projects like school and energy construction.
“Instead of bailing out giant corporations, we ought to focus on strengthening the small businesses that support our local economies and drive economic growth. This bill does exactly that,” said Rep. Kratovil. “This package is more critical now given the current economic environment where small business hiring, capital spending and earnings are at record lows.”
Kratovil noted that the bill is fully paid for and will not increase the deficit; the non-partisan Congressional Budget Office has determined that this bill is fully compliant with recently-passed Pay-As-You-Go (PAYGO) requirements. The bill also provides the U.S. Treasury Department with significant new tools to find and prosecute U.S. individuals that hide assets overseas from the Internal Revenue Service and delaying tax breaks on foreign interest payments that have shipped jobs overseas.
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