One of the arguments President Obama and Paul Krugman make against extending the Bush tax cuts for higher-income individuals is that they would save the money rather than spend it. Here is President Obama: "what I've got is the Republicans holding middle-class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire, which would cost over the course of 10 years, $700 billion, and that economists say is probably the worst way to stimulate the economy." Here is Paul Krugman: "Isn't keeping taxes for the affluent low also a form of stimulus? Not so you'd notice. When we save a schoolteacher's job, that unambiguously aids employment; when we give millionaires more money instead, there's a good chance that most of that money will just sit idle."
That's the context for the following, from a Bloomberg News article about a BMW factory in Spartanburg, South Carolina, which makes cars that are exported to 120 countries, including Germany (Who knew?): "President Barack Obama is pushing to let tax cuts for high-earners expire at the end of the year, which could dampen luxury-car demand....'The tax situation would hit BMW's clientele directly,' said Rebecca Lindland, an analyst with IHS Automotive in Lexington, Massachusetts."
And here we thought the money from tax cuts was just going to "sit idle"! It turns out that some of it goes to buy cars that are made by auto workers in South Carolina. Maybe the president and Professor Krugman only support jobs for the auto workers at U.S. government-owned car companies?
