DOLLARS TO THE MOON

The average distance from the earth to the moon is 238,856 miles. The projected cost of the economic bailout programs is as much as 8,000,000,000,000 dollars. If 4,000,000,000,000 dollar bills were piled on top of each other they would reach the moon. The projected cost of the bailout programs would provide enough dollar bills, piled on top of each other, to reach the moon, with enough left over to cover the states of Massachusetts and Connecticut.

The money for the bailout program is going to come from you and me in two different ways. We are going to contribute through taxes (income taxes, estate taxes, and other taxes) and through the diminution in value of our currency if the government elects to print money.

Taxation is an interesting process. Someone once said that taxation was like plucking a goose - the objective is to collect as many feathers as possible with the least amount of hissing.

At least tax collectors today have it better than in historical times. The Bible reports that tax collectors "were stoned, they were sawn asunder, were tempted, were slain with the sword: they wandered about in sheepskins and goatskins; being destitute, afflicted, tormented."

The "Laffer Curve" was made popular by Arthur Laffer in the 1980s and is the basis for supply-side economics. At some point on the curve between 0% and 100% lies the tax rate that will produce the maximum revenue, and the theory says that lowering taxes may actually increase revenue. This argument is one that will be looked at over the next several years as the government sets economic policy.

Policy is what we decide to do tomorrow after we have discovered that what we did today is not working very well. What happens in the future will seriously impact your income tax planning and your estate tax planning.

We will be watching, and reporting to you through future Articles and our website - Haddletonlaw.com - as the government establishes and implements tax policy to deal with the revenue needs arising from the bailout. We invite you to check out our website from time to time, where we will be discussing estate, tax, and Medicaid matters in much more detail than is possible in Articles