Delay on tax cuts an ominous sign

Waterbury Republican-American ^ | September 29, 2010 | Editorial

[Graybeard58]

In calling for the end of the Bush tax cuts on the wealthiest Americans, President Obama on Monday told a TV interviewer that high-income people such as he "don't need a tax cut" because they have enough money to pay their expenses. If they got a $100,000 "tax cut" — that is, if they were allowed to keep more of their income instead of having the government confiscate it to spread the wealth around — they wouldn't spend it like average consumers would to stimulate the economy, he says.

His argument is specious on two levels. For the sake of discussion, let's say "the rich" get their "tax cut," and let's say Mr. Obama is a typical "rich" American, which he certainly is not if only because his income is a mere $400,000 and taxpayers finance many of his ordinary expenses.

But let's say he gets a $10,000 tax cut. He says he wouldn't spend it, but he certainly would invest it; after all, the rich got rich and stay rich by making their money work for them.

Even if he only put his tax cut in a certificate of deposit, he would generate more economic benefit than simply by spending it. That's because his bank would lend the money for any number of purposes, including home purchases or renovations, business expansions, or car or equipment purchases.

That spending would create economic activity and private-sector jobs.

All the while, however, the bank would earn interest, giving it more money to lend to spur further economic and job growth. Mr. Obama, too, would earn interest that would help him pay his future expenses, such as his children's college education or many of his ordinary expenses after January 2013.

Contrast that with his 2009 "stimulus," which was enthusiastically and unanimously supported by Connecticut's congressional delegation, the handmaidens of House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. To fund that government waste, Mr. Obama and the Democrats sucked $817 billion from the economy, specifically from the credit markets. That squeezed out $817 billion in private-sector economic activity to preserve, among other things, the economically unproductive government jobs held by unionists. As much as the president claims the "stimulus" saved America from a depression, today's deepening economic doldrums speak to a much different, darker reality.

And the reality on the debate over the Bush tax cuts is no one will see his or her taxes decline if the tax cuts are extended, but extending them would prevent a tax increase of more than $3 trillion, the largest in U.S. history. But if Mr. Obama and congressional Democrats get their way, they will raise taxes on America's highest achievers by $700 billion, giving the government plenty of cash to pay for more public-employee-union bailouts and more special favors for the vested interests while draining $700 billion in badly needed capital from the economy at the worst possible time.

Voters have every right to be extremely suspicious of the Demo- crats' refusal to vote before Election Day on extending the Bush tax cuts and of their promise to extend those for the middle class after the election. Remember: These are the same radicals who in 2008 promised you "hope and change."

[rockinqsranch]

From the don’t get it crowd that manage to somehow get in it.

Thanks for the ping Graybeard.