It seems as if the reality check that is our economy and the nature of economics itself has caused Obama to go back on his promise to repeal the Bush tax cuts. In all likelihood, he will allow them to expire in 2011 as originally designed by the Bush administration.
From myway via Patterico, here is a quote from a top Obama aid:
Obama's plans, outlined by his transition team on television talk shows, could put aside his campaign pledge to repeal a Bush tax cut for the wealthy. With the downturn in the economy, those tax cuts may remain in place until they are scheduled to die in 2011, said William M. Daley, an economic adviser. "That looks more likely than not," he said.
Okay, so even if they are still pushing the "tax cuts for the rich" angle (and I must be rich, because I remember my tax cut rolling in courtesy of "W"), this still proves that down deep, Obama is a "supply-sider" after all!
Seriously, I am encouraged that Obama isn't blindly keeping keeping all of his rhetorical promises, the reprieve will be nice. This also means, at least for the next couple years, Obama will borrow and spend instead of tax and spend. But we are used to that by now.
Come 2011, I shall batten down the hatches.
6 comments:
Bush wanted his tax cuts made PERMENANT as did McCain...he did not want them to expire.
Obama is actually attempting to stimulate DEMAND through further tax cuts to the middle class and the creation of massive government spending programs to create jobs...
That is NOT supply side economics....its classic Keynesian economics.
This is good news. And it means there's a potential (especially since he picked up Clinton's old cabinet) that Obama's first term may be, to borrow from campaign talking points, Clinton's third term rather than Carter's second. It means we have a chance not to go full-bore socialist.
Tao: Did you even read the post? If he's leaving in the "tax cuts for the rich," that's a silent acknowledgment of the effect that across the board tax cuts (a staple of supply-side economics) do work, despite his middle class tax cut bs line (which was a promise Clinton promptly dropped, too).
But we'll see how far he goes in expanding government with a mess of an economy.
Patrick,
The issue is not tax policy nor economic growth...its about finding a bottom to this financial free fall we are in.
We have to land, and who cares if it is a soft landing or a hard landing...we have to find a bottom.
Home values are still dropping, foreclosures are increasing, job losses grow, and banks are beginning to see their next fear; credit card defaults.
With all the money the government is giving away it is obvious that revenue is the least of their worries....
Right now Obama could make 2009 a tax holiday and declare that no taxes would be collected from anyone and guess what...it wouldn't make a difference.
In the first year and a half of my ecommerce site we had a total of 17 credit card declines....17 in a year and a half. Yesterday, in one day we had 22.
The way this thing is going we are going to end up finding our financial system, when it does eventually land and bottom out, someplace in the 19 century.
This is an interesting thread. We have just had eight years of a pres. who once he makes a decision, he sticks with it.
And that, by many in the GOP and the right, has been called evidence of his leadership and resoluteness.
Now along comes another approach, one that seems to respond to a situation in real time, as events unfold.
The response by the more conservative bloggers I have read seems to be what a good thing it is that Obama listens to people, and when necessary, changes his mind and/or course.
Fascinating.
Dave: What I find interesting, is the consistent condescension coming from Obama supporters, who are simultaneously talking about tolerance and uniting behind Barack to heal the country.
Allow me to answer you "intersting fascination" about my apparent relief that Obama is not going to repeal the tax cuts. It is because the principle (if it can be called that) by which he made the decision to repeal the tax cuts was wrong in the first place.
Bush acknowledged what every financial expert knows when he put the tax cuts in place: strong businesses create jobs and affordable products and services for all. As I believe that is good principle, I supported his persistence in getting the legislation through.
Once Obama started getting the real intel about what has been going on in our country and the world, he was forced to change course, or risk doing more damage by not taking a more moderate stance.
You are exactly right Bullfrog. Once someone gets information that contradicts their preconceived ideas, they have a choice.
To continue as if it did not matter, or change course.
However using an example with GW, it was like pulling teeth to get him to support the surge in Iraq, even in the face of mounting evidence, and intel, that it was necessary.
Any politician must have the ability to change course as the need arises and the situation dictates.
I hope, and believe, that Obama will be this type of president. More of a pragmatist as opposed to an idealist.
This is the Kissinger model of realpolitik that enabled the Nixon Admin to open up China.
Even "tax cutter extraordinaire" Reagan understood that there are times when you need to raise taxes, as he did in California, at the time supporting the largest tax increase in state history.
He was able to set his ideology aside for pragmatic reasons.
The true believers, on both sides, and I am pretty sure you can see I am not, have hamstrung the middle for many years.
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