Two More Tax Points

http://www.futureofcapitalism.com/2010/12/two-more-tax-points

Amid all the talk about the tax deal, including the complaining about it on the left, one point I haven't heard made, but that has some merit, is that if President Obama and the Congressional complainers really felt strongly about raising taxes on the rich and extending the tax cuts for everyone else, they had nearly two years to do that, and they didn't.

It's not like it was some kind of surprise that the tax cuts were going to expire at the end of this year. Everyone knew it. Mr. Obama even campaigned on the issue in 2008. He was elected with a lot of political capital and with Democratic majorities in both the House and Senate. But instead of tackling the tax issue, he chose to do other things — "stimulus," health care, financial reform. President Obama and the Democrat-controlled House and Senate left the tax issue unsolved until just weeks before the tax cuts were due to expire, creating uncertainty for business, investors, and individual taxpayers.

I know, the Democrats didn't have a filibuster-proof majority in the Senate. But they managed to get ObamaCare and Dodd-Frank financial "reform" through with the majority they had. Had the president, Speaker Pelosi, and Senator Reid put their minds to it, they could have gotten a tax deal, too — perhaps one more favorable to the Democrats than the one that has been reached after the election.

You've heard about businesses with a "just-in-time" inventory management policy? Under the Democrats, the country has a "just in time" tax law. And that's assuming the deal passes, which I'll believe if and when it actually happens.

While we're on the tax topic, Caroline Baum has a good column up at Bloomberg on "Why the Left Hates Tax Cuts for the Wealthy":

being allowed to keep money you earned? What is it about tax cuts for the wealthy that so galls the Left?

I can't answer definitely because I don't share the antipathy. My hunch is that folks who abhor tax cuts for the rich see the economic pie as a fixed quantity. Your gain is my loss. A tax cut, exemption, credit or deduction for you means nothing for me. It's a zero sum game, except it isn't.

There's some excellent stuff in the Baum column, too, about income inequality and income mobility; it's worth reading the whole thing.

by Ira Stoll  |  Dec 15, 2010 at 10:31 am Related Topics:  Definition of 'Rich', Income Inequality, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list