You have to wonder how many times do we have to repeat mistakes like increasing government spending to “stimulate” the economy when every time it has occurred it has been an abject failure. Now the failed Congress and the President, whose policies were soundly rejected on November 2, are trying once again to deceive the American people in preparation for 2012 when it comes to extending the Bush tax cuts.
They believe that by selling the line that they are for the “little guy” that they will stave off more political losses in 2012. They continue to clearly demonstrate that they don’t get it. I’ve been in DC the past couple of days. It’s obvious that within the Beltway, the powers-that-be think that November 2 was an aberration and you aren’t really paying attention!
Here is an economic fact: When you raise taxes on high earners who are job creators, they will in turn stop creating new jobs and likely will reduce those they already have in place. We see that happening now with increased taxes from Obamacare and expanding costly regulations by bureaucracies like EPA. Job creation is being stymied by not only the known tax increases so far but by the unknown in Washington.
What is known about Washington is that they have no idea how to stimulate the economy. They don’t create jobs, except for federal jobs that cost the taxpayers and the economy money. They do wreck job creation by over regulating, over taxing and by being clueless about the real world of job creation in the private sector. Government hurts job creation far more than it helps!
The usual class warfare is at work in the debate. As you probably have heard, the debate is whether the tax cuts should be extended to those making $200,000 single/$250,000 married or less, to those making less than $1 million, or to everyone.
As we know, Congress and the President have a difficult time fighting their way out of a wet paper sack. Our friends at the Heritage Foundation are working on a “menu” for the failed Congress and President to select from when considering their tax hikes.
Let’s be clear. Extending the tax cuts to all will not result in sudden job creation. The economic policies of this Congress and President have made sure that they will continue to spend, which is the real problem. However, not extending the tax cuts will result in 1.4 million jobs lost over the next four years.
But wait, you say. They are trying to “compromise” and that’s what we need. Sounds good, and that is what Washington wants you to focus on, the “sound and feel-good” aspect of any “compromise.” Unfortunately, there are consequences to those compromises.
Heritage’s Dr. Bill Beach, who received his economics degree from Mizzou, reported yesterday not only the cost of not extending the tax cuts — 1.4 million lost jobs over four years — but the cost of “compromise.” Here’s the menu Congress and the President have to choose from:
- No Extension – 1.25 million jobs lost over 4 years
- Tax cuts extended for those making less than $200,000 single/$250,000 married – only 693,000 poor people lose jobs
- Tax cuts extended for those making less than $1 million – only 198,000 poor people lose jobs
In reality, the use of the words “tax cut” is not accurate. It’s simply the continuation of current fiscal policy. People aren’t paying these taxes now, but will if they are not extended. That result is a REAL tax hike.
Some would say the “tax cuts” are sapping revenue needed to pay down debt. This is another sounds-good statement, and it’s false. We have plenty of revenue to pay debt. Unfortunately, we have plenty of spending to make more debt which would outpace any sufficient revenue stream.
Bottom line: Congress and the President need to rein in spending far more than they need to raise revenues.