Not Serious

In a side bar to an article in the Financial Times that discusses the President’s inability to convince his own party to increase taxes on the “rich,” Edward Luce provides a sidebar that identifies the “cost” associated with maintaining the Bush Tax Cuts – actually a set of income tax rates that have been in place for the past 10 years.

• It would cost about $3,300bn to make all of the Bush-era tax cuts permanent.


• It would cost $700bn less over 10 years to extend all of those tax cuts except for families making more than $250,000 a year.


• A permanent extension of all the Bush tax cuts could boost US economic growth by 0.5 to 1.4 per cent in 2011.


• Extending all the Bush tax cuts except to the wealthy would boost US growth by 0.4 to 1.1 per cent in 2011.


• People in the upper income brackets – earning more than $200,000 as individuals or $250,000 as families – make up 2-3 per cent of the US population.

It’s actually fascinating to watch proponents of class warfare—the President included—discuss the continuation of an existing, ten-year old tax rate structure as a “cost.” In actuality, discontinuing the current rate structure costs nothing. If implemented, it would simply take additional money out of our of the economy, give it to Washington and then allow the federal government to spend (waste?) it on any number of government programs.

The President questions the seriousness of those who oppose increasing taxes by suggesting that they can’t be serious about deficit reduction. To coin a phrase, "those who live in glass houses … etc., etc."

It has taken the Obama administration only two years to increase the national debt to historic levels—and Barack Obama questions the seriousness of others?

Maybe it's time for the President to show some leadership—not by raising taxes, but by making a serious and all-encompassing effort at reducing discretionary spending and entitlement costs. I suspect he’d get more than a little support from those who he suggests aren’t serious.