Give a penny, take a penny? How about give $50 billion, take $50 billion, if not a lot more . . .
Welcome to a Saturday morning chapter of “Uncle Sam Giveth and Taketh.”
While reviewing a number of news outlets, I was struck by the juxtaposition of two reports from The Washington Post:
Standard fare, right?? Let’s not be quite so hasty.
From the former, we learn that:
The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.
The effort would represent a striking shift from the rescue program’s original mandate, since it would direct billions of bailout dollars toward a plan that aims more at saving jobs than at righting the financial system. Some economists estimate that small businesses, defined as firms with fewer than 500 workers, employ most of the country’s workforce.
From the latter, we learn that:
House Democrats agreed yesterday to raise taxes on the wealthy to pay for a sweeping expansion of the nation’s health-care system, proposing a surtax on the highest earners that could send the top federal tax rate toward 45 percent.
Republicans assailed the idea, saying the new tax would fall heavily on small-business owners, who tend to report business income on their personal tax returns.
Don’t think for a second that our political wizards in Washington are capable of precision execution on either of these fronts. Given the size of the respective programs, I think jobs saved (via increased SBA assistance) versus jobs lost (via higher taxes on small business) will be at best a push.
A few questions and comments:
1. How does Uncle Sam, in the name of the Small Business Administration, determine who receives assistance? Can Uncle Sam be influenced in picking winners and losers? Hmmmm . . .
2. Does it even matter anymore that the TARP legislation was not written for purposes of allocating funds to small business? Does the rule of law count for anything in our country?
3. On the tax front, to think the Obama administration is going to increase taxes on upper incomes (both individuals and small businesses) to as high as 45% and not touch tax rates below that is beyond naive. There is NO doubt in my mind the taxman cometh across the board at the federal, state, and local levels.