The current tax rates are still set to expire at the end of the year. If nothing is done, the rates will rise. It had looked like Obama and some of the Republicans had a deal, but now the House Democrats are shooting down the plan.
There are a lot of reasons for unemployment being so high. One big reason is the Austrian Business Cycle Theory. The prior Fed inflation caused an unsustainable boom that went bust. Now, resources are trying to realign themselves to more sustainable things. Other reasons for high unemployment include the minimum wage, other labor laws, and taxes.
There is another factor in the unemployment situation. In 22 days, the current tax rates will rise if nothing is done. How are businesses or individuals supposed to plan in this kind of environment? There is enough uncertainty with the current economy and the unstable dollar (QE2). That is bad enough. But we don't even know what our tax rates will be in 22 days. This is really truly unbelievable if you think about it and you can blame both major parties in DC.
The Republicans never made the tax cuts permanent. Instead, they only passed tax cuts through 2010. Then the Democrats had almost 2 years, along with Obama, and nothing has been done yet. On top of it all, this deal that was supposed to happen between Obama and some Republicans wasn't really a good deal for us citizens. There were a couple of good things like maintaining the current income tax rates and possibly reducing the payroll tax for a year. But then there were all kinds of welfare included in the bill, including extending unemployment and funding Obamacare. So yes, the Republicans have already caved on Obamacare. To top it off, the death tax would come back at a rate of 35% with an exemption on the first $5 million. So I guess it would only be the really rich people committing suicide on December 31.
DC is so far gone, it really is hopeless. We just have to make sure that when the house of cards falls down, that we have done a good job of educating people on the benefits of liberty. Until then, we should hope for reduced taxes. The government will continue to spend and inflate, regardless of what the tax rates are. We might as well try to get our benefit now and convert some of our money into hard assets while they are still relatively cheap. In the meantime, sit back and enjoy the show and let's see if Congress can get the tax rates figured out in the next 3 weeks.