Investors – IBD Editorials
Fiscal Policy: Many voters are looking forward to 2011, hoping a new Congress will put the country back on the right track. But unless something’s done soon, the new year will also come with a raft of tax hikes — including a return of the death tax — that will be real killers.
Through the end of this year, the federal estate tax rate is zero — thanks to the package of broad-based tax cuts that President Bush pushed through to get the economy going earlier in the decade.
But as of midnight Dec. 31, the death tax returns — at a rate of 55% on estates of $1 million or more. The effect this will have on hospital life-support systems is already a matter of conjecture.
Resurrection of the death tax, however, isn’t the only tax problem that will be ushered in Jan. 1. Many other cuts from the Bush administration are set to disappear and a new set of taxes will materialize. And it’s not just the rich who will pay.
The lowest bracket for the personal income tax, for instance, moves up 50% — to 15% from 10%. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%. At the higher end, the 33% bracket is pushed to 36% and the 35% bracket becomes 39.6%.
But the damage doesn’t stop there.
The marriage penalty also makes a comeback, and the capital gains tax will jump 33% — to 20% from 15%. The tax on dividends will go all the way from 15% to 39.6% — a 164% increase.
Both the cap-gains and dividend taxes will go up further in 2013 as the health care reform adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000. Other tax hikes include: halving the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.
Letting the Bush cuts expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.
But even more tax headaches lie ahead. This “second wave” of hikes, as Americans for Tax Reform puts it, are designed to pay for ObamaCare and include…
The White House
Office of the Press Secretary
THE PRESIDENT: Good morning, everybody. Right now, across this country, many Americans are sitting at the kitchen table, they’re scanning the classifieds, they’re updating their resumes or sending out another job application, hoping that this time they’ll hear back from a potential employer. And they’re filled with a sense of uncertainty about where their next paycheck will come from. And I know the only thing that will entirely free them of those worries –- the only thing that will fully lift that sense of uncertainty –- is the security of a new job.
To that end, we all have to continue our efforts to do everything in our power to spur growth and hiring. And I hope the Senate acts this week on a package of tax cuts and expanded lending for small businesses, where most of America’s jobs are created.
So we’ve got a lot of work to do to make sure that we are digging ourselves out of this tough economic hole that we’ve been in. But even as we work to jumpstart job growth in the private sector, even as we work to get businesses hiring again, we also have another responsibility: to offer emergency assistance to people who desperately need it — to Americans who’ve been laid off in this recession. We’ve got a responsibility to help them make ends meet and support their families even as they’re looking for another job.
That’s why it’s so essential to pass the unemployment insurance extension that comes up for a vote tomorrow. We need to pass it for men like Jim Chukalas, who’s with me here today. Jim worked as a parts manager at a Honda dealership until about two years ago. He’s posted resumes everywhere. He’s gone door-to-door looking for jobs. But he hasn’t gotten a single interview. He’s trying to be strong for his two young kids, but now that he’s exhausted his unemployment benefits, that’s getting harder to do.
We need to pass it for women like Leslie Macko, who lost her job at a fitness center last year and has been looking for work ever since. Because she’s eligible for only a few more weeks of unemployment, she’s doing what she never thought she’d have to do — not at this point, anyway. She’s turning to her father for financial support.
And we need to pass it for Americans like Denise Gibson, who was laid off from a real estate agency earlier this year. Denise has been interviewing for jobs -– but so far nothing has turned up. Meanwhile, she’s fallen further and further behind on her rent. And with her unemployment benefits set to expire, she’s worried about what the future holds.
We need to pass it for all the Americans who haven’t been able to find work in an economy where there are five applicants for every opening; who need emergency relief to help them pay the rent and cover their utilities and put food on the table while they’re looking for another job.
And for a long time, there’s been a tradition –- under both Democratic and Republican Presidents –- to offer relief to the unemployed. That was certainly the case under my predecessor, when Republican senators voted several times to extend emergency unemployment benefits. But right now, these benefits –- benefits that are often the person’s sole source of income while they’re looking for work -– are in jeopardy.
And I have to say, after years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle-class Americans like Jim or Leslie or Denise, who really need help.
Over the past few weeks, a majority of senators have tried -– not once, not twice, but three times –- to extend emergency relief on a temporary basis. Each time, a partisan minority in the Senate has used parliamentary maneuvers to block a vote, denying millions of people who are out of work much-needed relief. These leaders in the Senate who are advancing a misguided notion that emergency relief somehow discourages people from looking for a job should talk to these folks.
That attitude I think reflects a lack of faith in the American people, because the Americans I hear from in letters and meet in town hall meetings –- Americans like Leslie and Jim and Denise — they’re not looking for a handout. They desperately want to work. Just right now they can’t find a job. These are honest, decent, hardworking folks who’ve fallen on hard times through no fault of their own, and who have nowhere else to turn except unemployment benefits and who need emergency relief to help them weather this economic storm.
Now, tomorrow we will have another chance to offer them that relief, to do right by not just Jim and Leslie and Denise, but all the Americans who need a helping hand right now — and I hope we seize it. It’s time to stop holding workers laid off in this recession hostage to Washington politics. It’s time to do what’s right — not for the next election but for the middle class. We’ve got to stop blocking emergency relief for Americans who are out of work. We’ve got to extend unemployment insurance. We need to pass those tax cuts for small businesses and the lending for small businesses.
Times are hard right now. We are moving in the right direction. I know it’s getting close to an election, but there are times where you put elections aside. This is one of those times. And that’s what I hope members of Congress on both sides of the aisle will do tomorrow.
Thanks very much.
Catholic group’s initiative will see the slogan ‘Pope Benedict Ordain Women Now’ appear on 10 buses throughout September
Guardian – By Riazat Butt
In a move designed to coincide with the pope’s visit to Britain in September, London buses are to carry posters calling for the ordination of women.
The initiative, from the UK group Catholic Women’s Ordination (CWO), will see buses carrying the slogan “Pope Benedict Ordain Women Now”.
According to the weekly Catholic magazine the Tablet, CWO has paid about £10,000 for the posters to appear on 10 buses for a month from August 30.
The pope will be in the UK from September 16, spending two days in the capital, and the posters will appear on routes that go past Westminster Cathedral and Westminster Hall. Both venues feature on the papal itinerary.
Last Thursday the Vatican issued sweeping changes to its laws on sexual abuse, extending the period in which charges can be filed against priests in church courts and broadening the use of fast-track procedures to defrock them. But while the document dealt mostly with paedophilia, it also stated that the “attempted ordination of a woman” to the priesthood was one of the most serious crimes in church law.
The mention of both issues in the same breath caused anger within some groups, especially those in favour of women priests, and prompted a Vatican official to clarify its position, saying the crimes were of a different nature and gravity.
The outcry boosted interest in the movement for female Catholic priests, with CWO receiving donations and dozens of membership inquiries.
One member, Pat Brown, said a press conference would be held during the papal visit at which the group would make its case for ordaining women.
“We love the church and don’t want to be disruptive. We are trying to get support and would love to have five minutes with the pope. We are very concerned about what is going on in the church at the moment.”
Buses have become the preferred vehicle for believers and nonbelievers to promote their cause to the wider public. The trend started in January 2009, when a group of atheists arranged for an “upbeat and positive” message to counter slogans of hellfire and damnation from some churches.
Organisers exceeded their modest £5,500 fundraising target, receiving more than £150,000, and their success encouraged atheist and humanist groups around the world to carry out similar campaigns.
The advert, the idea of writer Ariane Sherine, bore the words “There’s probably no God. Now stop worrying and enjoy your life”. It was one of the top 10 most complained about adverts of that year.
A parody advert soon followed from the Christian Party, which claimed: “There definitely is a God. So join the Christian Party and enjoy your life”.
It drew 1,045 objections, making it the fourth most complained about advert since records at the Advertising Standards Authority began.
WSJ – By JULIAN E. BARNES
WASHINGTON—Gen. David Petraeus plans to ramp up the U.S. military’s troop-intensive strategy in Afghanistan, according to some senior military officials, who have concluded that setbacks in the war effort this year weren’t the result of the strategy, but of flaws in how it has been implemented.
The officials said Gen. Petraeus, who took over as allied commander in Afghanistan this month and is conducting a review of the war, intends to draw on many of the same tactics he implemented to turn around the war in Iraq—and which his predecessor, Gen. Stanley McChrystal, introduced in Afghanistan.
But the officials said Gen. McChrystal put too much attention on hunting down Taliban leaders, at the expense of the U.S. counterinsurgency strategy, which focuses on protecting civilians and bolstering popular support for the government. Supporters of Gen. McChrystal dispute that assessment, dismissing any notion there were flaws in how he fought the war.
Gen. Petraeus’s determination to intensify a strategy focused on driving a wedge between the Taliban and the Afghan people could be tricky to pull off, given the mounting political pressure in the U.S. to show results in the nearly nine-year war, and to begin drawing down troops next year…
Some in the White House advocate a pared-down approach that requires fewer troops and greater emphasis on drone attacks on insurgent leaders. These officials would like to see an accelerated withdrawal of U.S. troops. During the Iraq surge, Gen. Petraeus proved adept at parrying suggestions for a rapid withdrawal and won time to show his strategy could work.
He is again under pressure to show quick progress. When the Obama administration committed earlier this year to a 30,000-troop surge to underpin the counterinsurgency strategy, it said it would review the effort in December—a tight timeline that included a July 2011 date for the beginning of troop withdrawals.
Gen. Petraeus may have less time. Officials say he is under pressure to demonstrate results ahead of a North Atlantic Treaty Organization conference in Portugal in November. Gen. Petraeus declined to comment…
Under Gen. McChrystal, much of the public attention this year was on the operation in Marjah, the first major offensive of the surge, where officials promised they would deliver a “government-in-a-box.” But months after American forces retook the center of Marjah, the U.S. has struggled to help the Afghan government deliver services because of problems with security and with the government’s effectiveness.
Some government officials and military analysts view the emphasis placed on Marjah as a strategic mistake. Rather than demonstrating the reach of the Afghan government, it showed the limits, they say. “Marjah is not critical terrain, it is not a key population center,” said Jeffrey Dressler, an analyst at the Institute for the Study of War. “You had to clear Marjah out, but it was not the place to implement a district governance plan.”..]
General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the automaker to expand loans to customers with poor credit and offer more leases, key areas where GM must grow to accelerate its car sales.
But the acquisition of the independent auto financing company also means that GM, which is 61 percent owned by the U.S. government, is getting back into the business of making risky loans. GM said it advised the U.S. Treasury Department of the acquisition, although government approval was not required.
GM executives have said for months that they were missing sales opportunities due to lack of credit for lease deals and financing for subprime buyers, those with credit scores below 620 on a 300-to-850-point scale. About 40 percent of U.S. customers have below prime credit scores, said Chris Liddell, GM’s chief financial officer.
“Clearly there’s an opportunity to bring more people into our showrooms and help them with finance,” he said after the deal was announced on Thursday.
Customers should now expect more lease deals from GM, which gets just 7 percent of its sales from leases, compared with 21 percent for the industry, he said. Only 4 percent of GM’s sales come from subprime buyers, which the company hopes to expand with the acquisition. Liddell said even a modest increase in subprime buyers from 4 percent to 5 percent would be significant. GM sold just over 1 million vehicles in the U.S. during the first half of the year.
Mike Jackson, CEO of AutoNation Inc., the largest auto dealership chain in the U.S., said he was thrilled with the acquisition because it will help his dealers increase sales.
“This is a big, strategic deal for General Motors. They absolutely needed to add this segment of the market to meet the needs of the customers coming into our dealerships,” he said.
Related (AP): GM to pay $3.5B for auto financing company