Posted by Joseph Y. Calhoun, III

Republicans and Democrats differ on many issues but when it comes to economics the parties are equally ignorant (via WSJ):

The latest changes to business taxes are contained in a measure that would extend unemployment benefits by as much as 20 weeks from the current 79 weeks. In a bid to aid the property market, the bill would also extend for five months a tax credit for homebuyers, and expand it beyond first-time purchasers. That move is estimated to cost about $10.8 billion over the next decade.

The change in business taxes allows companies to get refunds of taxes paid in previous years:

The new tax break for businesses, estimated to cost about $10.4 billion over the next decade, would give large companies bigger refunds to make up for recent losses. Specifically, it would let large firms claim cash refunds on taxes they paid going back nearly five years, to offset current losses. Previously, the carry-back period for large firms was two years. Similar carry-back rules already apply to small businesses.

The tax increases would also apply mostly to large corporations, particularly multinationals. The main one would involve postponing the implementation of a tax break for multinationals that Congress created in 2004 in an effort to help U.S. companies compete more effectively against overseas rivals, and that has yet to take effect. In all, the tax increases would raise more than $20 billion over the next decade.

Okay, let’s add up the stupid economics. The first time home buyers tax credit cost roughly $45,000 per extra house sold. The new credits apply to any buyer for homes up to $800,000 and the buyer can have income up to $250,000. So not only will I be forced to subsidize homebuying, I’ll be forced to subsidize buyers who make more money than I do. I’m sorry but I can’t get behind that. The unemployment extension is humanitarian but is also proven to do exactly what the name implies, extend unemployment. The tax loss carrybacks will benefit companies, such as homebuilders, that were mismanaged during the downturn. Companies who are reporting profits right now - in other words, well managed companies - will get nothing. And multinationals, some of our most competitive companies, will get a tax increase. There is nothing in this bill worthy of passage and the Senate approved it unanimously.