Bush Tax Cut Extension: DOA?

After watching the total pandemonium and maelstrom of lies out of Europe today, some may have forgotten that our own rulers are among some of the most incompetent, corrupt, and stupid people on earth. Luckily, here is Dick Durbin to remind us that nothing compares quite to the chaos emanating from D.C. - it appears the extension of the Bush tax cuts which until early this week was taken for granted, until yesterday when Moody's implied a permanent extension of such cuts would lead to a rating cut, may have been all but killed after preliminary discussions between Senate Majority Leader Harry Reid, and Mitch McConnell, the chamber’s top Republican, “did not go well.” Bloomberg reports that not only is the Senate's #2 Democrat "not very optimistic" about the option of extensions, but nobody even has a clue what is going on: "I don’t even know what the options are at this moment,” said Washington Senator Maria Cantwell, a Democrat who serves on the tax-writing Finance Committee." Tangentially, the question of how this economy continues to chug along courtesy of central planning by an administration and a monetary institution, both of which are beyond clueless, will some day be the topic of extended Ph.D. papers (of course, by then having a Ph.D. will be perceived as the vilest form of socio-educational stigmata).

More on the total confusion in D.C., and why all those betting on a 2% pick in 2011 GDP due to continuation of this last stimulus, may have to reevaluate:

President Barack Obama has invited congressional leaders to the White House on Nov. 18 to discuss alternatives. Obama and most Democrats want to extend lower tax rates on only the first $200,000 of income for individuals and $250,000 for married couples filing jointly. Congressional Republicans say they want tax cuts to be extended for all Americans, including those with higher incomes.

Senate Finance Committee Chairman Max Baucus, a Democrat, said he’s “optimistic” that Congress will resolve its differences “because it is the right thing to do.”

‘Kajillion Ideas’

Baucus said he didn’t know exactly how an agreement would be reached. “There are a kajillion ideas floating around,” he said.

Michigan Representative David Camp told a meeting of business tax lobbyists today that members of his party would fight efforts to extend tax breaks for middle-income households for a longer period than for richer Americans.

Such a proposal, advanced by some Democrats, “is a terrible idea and a total non-starter,” Camp, who is in line to chair the House Ways and Means Committee next year, told the Tax Council.

Unless Congress acts, marginal income tax rates will rise across the board, tax credits that benefit families will be slashed, and rates on capital gains and dividends will increase. A federal tax on estates worth more than $1 million also will be resurrected after expiring for 2010.

Not to mention capital gains tax associated selling. Don't forget the selling...