On Obama’s ‘Tax Cuts,’ Read the Fine Print
Only Pro-Growth Tax Cuts Deserve Republican Support
There seems to be a surprisingly enthusiastic reception among Republicans and in the media to Barack Obama’s effort to broaden support for his stimulus plan:
President-elect Barack Obama arrived on Capitol Hill yesterday and immediately set to work reassuring skeptical Republicans about his massive economic stimulus package — part of a campaign that earned him praise for seeking their input but questions from those averse to hundreds of billions of dollars in new spending.
Pitching a plan that is expected to include $300 billion in tax cuts, Obama pledged to consult Republican leaders, who until yesterday had been left out of negotiations between the president-elect’s advisers and congressional Democratic staff.
“The monopoly on good ideas does not belong to a single party. If it’s a good idea, we will consider it,” Obama told House and Senate leaders at an hour-long closed-door meeting, according to one attendee.
Obama, making his pitch two weeks before taking office, won generally favorable reviews from GOP leaders, particularly because of his decision to increase the tax-cut ratio to 40 percent of the overall package.
Flip Pidot provides a wise admonition: while it’s encouraging to hear a Democrat talk about tax cuts, Barack Obama is still a long way from a package that conservatives should support:
Barack Obama’s ostensible $300 billion tax cut is anything but. It’s being used as a lure, in order to – well, lure Republicans to the farcically irresponsible and inevitably feckless trillion-dollar Keynesian stimulus plan, but with tax cuts like these, who needs socialism?
How can the federal government best stimulate economic growth? How about making the Bush tax cuts permanent, accelerating depreciation, and reducing the corporate profits tax? How about reducing payroll taxes? How about a package that includes a reduction in capital gains taxes?
Instead, Obama is focused on a package that is ‘ideologically neutral:’
Obama officials said they tried to keep the package ideologically neutral, rejecting an option supported by many progressives to make people who are not working eligible for a “refundable” tax credit. And they passed up conservative provisions such as estate tax relief and capital gains tax cuts that disproportionately benefit wealthier individuals.
Obama’s growth package cannot succeed if he rejects out of hand those proposals favored by pro-growth conservatives. Their support should be a reason to include those ideas, not reject them.