Tax Cuts...
The recent tax cut is Bush's short term goal to jump start the economy. And for those who will really benefit from the tax cut (if you happen to make more than 100k a year) then it seems like a nice gift. However every economist who doesn't have his head in the Administration (and isn't employed at FOX News*) realizes that the long term of the tax cuts are not pretty.
We get a cut now...but we pay later.
Consider it a loan.
The Economist writes:
In the 1980s, Ronald Reagan also cut taxes (from far more draconian levels) and failed to cut spending: the result was an entrepreneurial boom, but also huge deficits, which were reduced only when Mr Bush's own father raised taxes. Bush the younger is heading down the Reagan road, with the additional huge problem of those retiring baby-boomers. Unless he changes tack, he could leave a terrible mess behind him.
And what we lose in the meantime are government benefits. Especially for the working poor and children.
The Washington Post writes:
The Senate bill included a low-income child credit provision that would have benefited families with annual incomes from $10,500 to $26,625, at a cost of $3.5 billion. It was dropped to help squeeze the House-passed tax cut down to the size -- $350 billion through 2013 -- that could win final approval in the Senate.
And there's a good article here from The Olympian about the cost of the tax cuts and how this bill would not have passed the Republican led congress 10 years ago under Newt.
How times change.
*( Neal Cavuto who has a business news hour on FOX News says that if we hadn't had Bush's first tax cuts the economy would be much worse. It's such a convenient argument. I'm sure a year from now if the economy is still sputtering he will let us know that had the tax cuts been even bigger the economy would be booming.)


