Posted on 06/04/2008 5:26:22 PM PDT by Kaslin
Fiscal Policy: The Senate's new $3 trillion budget for 2009 is big, but it fails to do something vital to the U.S. economy: extend President Bush's tax cuts. If this isn't fixed, we'll soon face the largest tax hike in our history.
Democrats sounded almost giddy. The budget "will strengthen the economy and create jobs," said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat. "It will provide tax cuts for the middle class, and it will restore fiscal responsibility by balancing the books by 2012 and maintaining balance in 2013."
Fine-sounding sentiments all. But parse those words for a moment. Virtually everything Conrad says is false, and in no small way.
If Bush's tax cuts expire in 2010, the middle class will in fact be hit with a massive tax increase. This in turn will weaken the economy and kill job growth. As for the deficit, slower growth also means lower revenues — and a bigger deficit.
Make no mistake: This tax hike is gargantuan. Simply by not making Bush's cuts permanent, taxes will rise by a minimum of $2.8 trillion between now and 2018.
On average, 116 million taxpayers will see a jump of $1,800 in their annual tax bill. Some 48 million married couples — the heart of the middle class that Democrats say they want to help — will be slapped with an average increase of $3,007. Even the elderly will take a hit — $2,181 on average.
(Excerpt) Read more at ibdeditorials.com ...
Oh, fear not, the socialist libs will kill the tax cuts. Just what our economy needs. Socialists in America will take socialism to its extreme, totally f*&^ up the economy, then try and blame some conservative because socialism did not work, does not work, and NEVER has worked.
Yet the stupid-ass, selfish, “something-for-nothing” voters will support and free handout like Osama Obama is promising — EVERYTHING IS FREE -— yeah, right.
Yes, likely a full decade before you see anything resembling the mid nineties economy. Not going to be pretty thats for sure
"Democrats sounded almost giddy... ...If Bush's tax cuts expire in 2010, the middle class will in fact be hit with a massive tax increase." "...The pretense of a "fiscally responsible" budget, by the way, is just that — a pretense.... ...this budget will not be balanced, and anyone who believes that is delusional. Remember this the next time you hear someone criticize Bush on spending...." "...This is supply-side economics in reverse..."
Well, it looks like this discussion has already died out but I'll add a few thoughts now that I have a chance. First of all, I think that calling the expiration of the Bush tax cuts the "largest tax hike in our history" is a bit disingenuous. I suspect that they are measuring this in current dollars or, at the very least, are not measuring it as a percentage of GDP. Why not just call it what it is, expiration of the Bush tax cuts and return of the tax code to where it was in 2000?
Of course, I doubt that the full tax cut will ever be allowed to expire by either party. I've long thought that Bush's tax cuts would likely end up morphing into a tax cut for middle and lower-income workers. They likely would have gotten by without the tax cut. But now that it is in effect, I doubt that there will be any call to let the increased child tax credit, the "marriage-penalty fix", or the new 10 percent tax bracket expire. If there is any call for increased taxes, it will likely come from letting the upper-income tax cuts expire. That's the problem with passing unsustainable tax cuts. The first ones that are likely to go will be those for upper-income workers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.