Obama's Trillion Dollar Deficits and Taxes
Before Republicans sign on to Obama's stimulus plan and its $300 billion in faux-tax cuts, they might want to think about how those "as far as the eye can see," trillion-dollar deficits will affect the odds of reducting tax rates in the future, whether on incomes, capital or payrolls. The lesson of the past quarter century is that big deficits make it more likely that taxes will raised, as in 1982, 1990 and 1993. Just like Team Obama has promised, this stimulus package will have long-term effects on the economy. Of course, those high tax rates, both at the federal and state level, may trigger another tax revolution years from now -- but at what cost to the economy in the meantime?
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Reader Comments
There is only one way out and this isn't it
...tax rates that rise and fall as the political pendulum swings right and left. This contributes to the extreme swings we suffer in the business cycle. How is anyone supposed to run a business with this nonsense. Here's a law I'd like to see:
No Administration / congress can raise any tax more than 1% in any year. If you want higher taxes you gotta vote on them every single year. No tax cuts with susnset provisions either. Get the focus off the tax rates and back to the ridiculous levels of spending. Sure, Bush blew his opportunity to claim fiscal restraint for Republicans but Democrats are not any better in that regard. Obama is not the anti-Bush, slashing spending left and right. The majority of our problems are entitlements and were set in stone decades ago and made worse over time. Both parties and 99% of all political hacks are to blame. Tom Coburn is the only Senator I know of who has the guts to face these problems head on.
Our gutless politicians better be building bomb shelters with all their ill-gotten gains because when the stuff hits the fan the public is going to want to lynch all of them.
Slight correction in article's assumption
Mr. Obama is inheriting a trillion dollar deficit from Mr. Bush and the Republicans in charge of congress for 12 of the last 14 years.
Mr. Obama promises to incur his own less than another trillion dollar deficit, but by creating yet another bureau in the form of a "Chief Performance Officer", he hopes to trim enough fat out of the country's largest employer--the U.S. government--to partially offset his own deficit spending over the course of as yet unknown a period of time.
We all hope it works somehow and recognize that he has already started creating his 3 million new jobs with the establishment of that new office with no announcement of how large of staff that officer will be allowed.
Slight correction in article's assumption
Mr. Obama is inheriting a trillion dollar deficit from Mr. Bush and the Republicans in charge of congress for 12 of the last 14 years.
Mr. Obama promises to incur his own less than another trillion dollar deficit, but by creating yet another bureau in the form of a "Chief Performance Officer", he hopes to trim enough fat out of the country's largest employer--the U.S. government--to partially offset his own deficit spending over the course of as yet unknown a period of time.
We all hope it works somehow and recognize that he has already started creating his 3 million new jobs with the establishment of that new office with no announcement of how large of staff that officer will be allowed.
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