Saturday, December 4, 2010
Obama's Best Laid Plans
Sometimes the best laid plans of mice and men fail. This is one of those times. After having to wait for eight exhaustive years for the Bush Tax cuts to expire, the Democrats are now in the position of having to support them. It should be remembered that the Democrats fought George W. Bush and the Republicans to include the sunset provision in order to prevent the cuts from being made permanent. So from 2001 until now the Democrats have looked forward to reclaiming the $3.7 trillion in tax revenue they were never able to get. The Democrats have always referred to them as the Bush Tax cuts, but the truth is the money was never the governments in the first place. The Bush Tax cuts simply allowed working Americans to keep more of the money they earned and were an attempt to get government to spend less. Now after eight years of anticipation and two years of failed economic policies under Barack Obama the Democrats are being forced to reconsider their position on the tax cuts. They would like to let them to expire and begin collecting them in 2011, but the ailing economy and an uncertain future have them reconsidering. Today they are staging votes to keep them in place for earners making less than $250,000. It will be followed by a vote to preserve them for people earning up to $1,000,000. Most likely both votes will fail and Democrats will be faced with the choice of letting them expire and impose the Obama Tax increase or maintain the cuts for all wage earners. Most experts think the Democrats and Obama will cave on this issue and maintain the status quo, which is probably the right choice. However, it should be noted that maintaining them is the last thing Democrats want to do. As a party the Democrats hate cutting taxes unless they can control how you spend the money they would otherwise take. President Obama wants the cuts to expire because he had planned to use the money to disguise the deficit and increase spending. In the end the Obama tax increases of 2011 may well be avoided, but not before those that do not support them are described as supporters of rich millionaires. It should be noted that $3 trillion of the $3.7 trillion total goes to people earning under $250,000, so in truth the Bush Tax cut was a middle class tax cut.