Don't Forget About Our Tax Cuts

With all the talk about social security reform these days, I hope that everyone in Congress takes John Kyl’s (R-AZ) lead and starts talking about extending our current tax cuts as a top priority. If Congress does nothing in the next few years, then tax rates will automatically revert to the levels they were before Bush’s tax cuts in 2001. As Kyl points out, when Bush passed the tax cuts in 2001 and 2003, Senate Democrats used the threat of a filibuster to prevent those cuts from being permanently written into law, so the cuts had to be limited to the lifespan of the President's original budget -10 years.

The effect will be the largest tax hike in American history, including a return to the 60% death tax. In addition to being a major drag on our economy by reducing the after-tax income of virtually every American taxpayer, this has major repercussions for our elderly who are trying to act responsibly about estate planning. Without being too insensitive, if an elderly person wishes to leave an estate to his heirs, he will not pay any taxes if he dies in 2010 but will pay a 60% rate if he dies in 2011! Does anyone believe this is fair (besides Democrats)?

Likewise, if nothing is done, capital gains taxes and dividend taxes will also rise. The government typically says that it is important for individuals to save and properly plan for their retirements, but when the government itself hasn’t decided how much of your money they are going to be taking, how can we properly plan? Does anyone else think this is fair (besides Democrats)?