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This is like lamenting that the Bush tax cuts became permanent two years ago. The only uncertainty is for liberals who still hope to repeal them. When pigs fly.
Here:
"Absent congressional action, a host of business and personal tax breaks expires on Jan. 1. ...
"Negotiators have all but given up culling the government’s growing list of temporary tax measures, making some permanent and jettisoning the most egregious tax giveaways. Instead, the House will vote Wednesday on a measure to restore almost all the tax breaks that expired last year for one year retroactively. That would allow taxpayers to claim them on their 2014 tax returns while forcing Congress to grapple with the issue again early next year."
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Ahem. There's nothing temporary about a tax break which was allowed to expire many months ago. If you've been counting on getting any expired tax break back, you deserve to be disappointed. If Congress decides to reinstate any of them before the end of the year, you've received a gift.
And while we're at it, the New York Times isn't very helpful about telling you what expired. Here's a list:
Health Coverage Tax Credit
Deduction for Charitable Donations from IRAs
Educator Expense Deduction
Nonbusiness Energy Property Credit
Tuition and Fees Deduction.
But the real whopper of this story is that we're supposed to believe that
"Uncertainty alone raised corporate bond prices, lowered growth by 0.3 percentage points a year and raised unemployment last year by 0.6 percentage points."
Investors in popular corporate bond index funds know the first statement completely misrepresents history. Net asset values of intermediates and shorts fell dramatically in the summer of 2013 after Ben Bernanke's ill-timed remarks. That prices have recovered since then masks the fact that prices today are still almost 3% lower for intermediates than they were when the Bush tax cuts became permanent at the beginning of 2013, and a half percent lower for shorts.
As for lowering growth, how anyone is supposed to believe that is beyond me. Government revenues have SOARED to record heights in fiscal 2013 as a result of permanency in the tax code, allowing a positive contribution to GDP from government consumption expenditures for the first time in four years. The 3Q2014 contribution was 0.76, most of that military spending on the war against ISIS, and the 2014 average to date is 0.31. The average contribution from government spending for 2011, 2012 and 2013? -0.45, a subtraction from growth.
Meanwhile unemployment has been falling, mostly as a result of not counting over 6 million unemployed Americans who have given up on finding a job. Adding them back in would take unemployment up from 5.8% to 9.6%, and the New York Times thinks it can detect a 0.6 point contribution from "uncertainty". We should be so lucky.
