[The Wizard]

complete and total drivel, BUT the case for making the cuts permanent.....

[patriciaruth]

First, a $330 billion tax cut sounds massive. But that's measured over ten years,

I thought it was all front loaded, and going to sunset in two or three years, which is why it is smaller.

[libertylover]

I don't remember the Clinton '95 tax cut.

[whipitgood]

"1.6%, a mere deck chair off the Queen Mary."
Not sure how much the Queen Mary weighs, but that would have to be one hell of a big deck chair!

[alloysteel]

The tax cuts work. This is the message within the text. Just not the way they have been described and advertised as working.

The author rails on about the "temporary" nature of certain tax cuts. The taxing authority is being used as a fiscal policy, on a more personal level than the spending authority Congress grants to the President. The policy of putting more spending power in the hands of consumers, in essense giving the taxpayer a pay raise by reducing immediate tax liability, is intended to take the sting of deflation out of the economy, considered to be a basically much more severe problem for the economy than a mild inflation. More dollars will, on the short term, be chasing the same number of goods, causing a short-term increase in prices. This in turn stimulates the production of a greater number of goods, limiting the rate at which prices may increase, and tending to stablize prices. At least this is what I gleaned from college economics class. The continuing cycle of rising prices stimulating greater production may continue only up to a point, which is where the modulating factor of taxation steps in, withdrawing additional money from circulation. This is the reason why there is a "sunset" provision in certain of the tax rates. But because of the exigencies of politics, and the uncertainty of economics, the selection of these "sunset" dates is almost purely arbitrary. The hypothesis is, that if the conditions at the time justify maintaining or reducing the tax rate, that Congress in its wisdom will act accordingly. On the other hand, if inflation is a threat, letting the tax rates revert to the old higher rates is virtually automatic. A Democratic Congress, by its very nature, would opt for the lapse in the rate reduction legislation, and not act to extend the lower tax rates. This is the implicit danger of electing Democrats to majority control of Congress. Economic malaise will ensue, markets will be in chaos, and uncertainty will stalk the land.

'Tis a bold and clever plan on the part of the Republican majority in the House, who were the initiators of this legislation. But it was written in the White House.

[chasio649]

btt

[Drango]

The TAX cuts are a good start. Now congress has to work on the spending side of the equation...

[jmaroneps37]

First the tired and worn out fox stopped jumping; stopped trying to grab the grapes. Then as he walked away dejected and beaten, he looked over his shoulder and said "Ah they were sour anyway." These "conserveTer then Thou" guys kill me. They could never get themselves or any one they approved of elected so; they sit on the sidelines and carp with the rats. "W's doing this wrong. W's doing that wrong" This guy sounds a lot like lil billy crystol to me.

[jwalsh07]

The reason the last three tax cuts worked is because they were permanent

Taxes, by their very nature, are fliud not static. Any change in the politcal structure of Congress will affect the permanancy of any tax legislation.

However, a political advantage is gained by forcing the marxists to not only raise taxes but repeal existing tax cuts as well.

And finally, any tax cut is a good tax cut.

[beckett]

The guy is not a serious analyst. His way too facile and cutesy argument overlooks many more things than I am in the mood to go into, but which some of our far more astute economic experts here at FR will surely bring to his attention.

[YoungKentuckyConservative]

I'm so overtaxed I'm in favor of ANYTHING that goes back to ANY people. I'm probably getting nothing from this tax cut (single, making too much, no children), and I'm still 100% in support and enthusiastic about the cut. I just want the government to control my life and OUR lives as little as possible.

I gave myself a tax cut this year and refused to pay for my car tags. =) I started counting all the ways the state gets me to pay for their highways, and I just didn't think it was fair. So by a narrow vote of 1-0, it passed in my Senate and House. Look at how much we spend on GASOLINE tax, for goodness sakes. We should have gold-plated highways.

[q_an_a]

The premise that CONSUMERS will hold off on something because of future perdictions is like thinking the rules of graviety might change. American consumers spend NOW because it gives them pleasure. Period. Point two, as has been said many times in the past week try to increase the sunset taxes or end them and your are telling people you are FOR TAX INCREASES. Not likely to happen. The rest of your ideas are interesting but rely on these two false assumptions.

[freekitty]

Tax cuts do work. Remember Rome. One of the reasons they fell was they taxed their people to death.

[RightOnTheLeftCoast]

What the writer ignores is the political aspect of the sunset provisions. As Dick Morris has pointed out, these force the Democrats to essentially campaign on a platform of tax hikes next year!

http://www.nypost.com/postopinion/opedcolumnists/76936.htm

If Morris is correct, then this is a doubly beautiful thing. Unlike the 2001 cuts, which were unwisely shoved off until years out.

[XBob]

bttt

[TomAdkinsCC]

RESPONSE TO QUESTIONS

FIRST- let me assure everyone that the economy will grow about 3-4% in the second quarter. Revenue will follow. That will have nothing to do with tax cuts, however, which won't have taken effect yet. (we conservatives will claim it does, however. And we should, just to screw the Democrats)
But the tax cuts will have nothing to do with that growth.

SECOND- let me also assure everyone that permanent tax cuts always work. Incidentally, Clinton's '95 capital gains tax cut, from 28% to 20%, was that famous "tax cut for the rich", which sparked the economic boom of the late 90s, and actually saw the rich (and everyone else who invested) pay more taxes on our new wealth. Again, no complaints. That's how it's SUPPOSED to work- the economy grows, and a lower rate on higher growth should yield more revenue AND more growth.

THIRD- The temporary effect will not be subtle. Businesses, particularly, will not spend long-term without assurance of permanance. That is a fact. Any CEO who goes into debt, then loses the tax break will cost his company millions. He will lose his job, if not his company.

LESSON FOR EVERYONE- Remember the S&L crisis? Reagan conceeded the change in the depreciation schedule to Democrats, as a compromise to get our desperately needed lower tax rates. But when depreciation dropped from 30% to 3%, commercial real estate lost up to 80% of its value, leaving owners stuck with worthless real estate, and banks stuck with worthless loans. If a someone had purchased a mall or an apartment complex ten years earlier, how could they have seen such a devastating move?
Sure, some incidences were cause by fraud and such, but the vast majority of failures were from innocents who could have never known they would lose their depreciation, and thus an immense value of their real estate business holdings disappeared. NOBODY saw that comning, but it led to the greatest bank crisis since the Depression.
The same will apply here. Businesses WILL NOT make long term purchases until they KNOW the cuts are permanant. Thus, any purchases that will work in 2-4 years will be made. But anything that takes 5-10 years to recoup will NOT be made. And businesses DO NOT trust congress. If your job was to control your company's multi-million dollar investments...would you?

Anyone who does not see this aspect automatically excudes himself from being qualified to disagree. The point is that obvious. Especially to those of us in the business world, who do this for a living.

Yes, let's happily take our tax cuts, and push the Congress to make them permanant. And I think Rove's political move was brilliant. But at the same time, remember it is ALWAYS great to fool your enemy...but ALWAYS stupid to fool yourself.

Your favorite millonaire businessman...

Tom Adkins
Publisher- CommonConservative.com

[discostu]

There's no such thing as a permanent tax cut. The tax picture gets jiggied every year in the budget, if anything these "sunseted" tax cuts are more permanent because there's a window when they're not allowed to mess with that part.

[Enduring Freedom]

Giving moronic Liberals ammunition to use against cutting exorbitant taxes.

Conservatives like this are worse than useless.

By self-destructing in his navel-gazing analysis, he proves that Hitler was the greatest leader.

What a maroon.

[Mr. K]

YES YES!! ONLY TAX INCREASES HAVE EVER WORKED !! EAH YEAH THAT's THE TICKET