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Monday, February 13, 2012

Bartlett: Only Obama's Re-election Can Prevent a Massive Tax Increase on Jan. 1, 2013

Fiscal Times, Election 2012: Obama Is Misplaying the Tax Card, by Bruce Bartlett:

Barack Obama has a potentially strong hand on the tax issue, but is misplaying it. An enormous opportunity was missed when he ignored the issue of tax reform in his State of the Union address on Jan. 24. But it’s not too late for him to get control of an issue that is certain to be widely discussed during the presidential campaign. If Obama fails to act, Democrats in Congress should seize it for themselves.

For Republicans, every problem in society is caused by government doing too much; never too little. And most of the time, it can be reduced to excessive taxation. Therefore, tax cuts are often the solution to any problem. And if tax cuts are good, bigger tax cuts are better. Thus, every Republican running for president has a big tax cut at the core of his economic policy, with much of the debate revolving around who has the biggest one.

In the real world, however, federal taxes are at their lowest level in several generations and there is no evidence that taxes are a major factor, let alone the key factor, restraining economic growth at this time. ...

[E]ven if Democrats lose the Senate as well as the White House they will easily be able to filibuster extension of the Bush tax cuts. Therefore, Obama actually holds the winning hand; only he can ensure that taxes don’t rise next year for most taxpayers by negotiating a compromise acceptable to Senate Democrats. Whether he has the skill to play it may determine whether he is re-elected or not.

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Comments

Obama's message should be "Elect me because otherwise those mean Democrats will increase your taxes?" Really?

How about Romney running on the message "Only I can protect your benefit programs from cuts by those mean Republicans"?

Posted by: AMTbuff | Feb 13, 2012 8:43:46 AM

Mr. Bartlett's comments do not reflect reality.

The Reconciliation process will allow Republicans in the Senate to enact whatever tax policy they wish to enact if they have a majority.

And the idea that Republicans will respect the filibuster once Democrats start to use it is just not likely.

New Rule: Temporary tax cuts are not temporary, they just look that way.

Another New Rule: Commentators who do not understand the rules of the game they are commenting on should not be taken seriously.

Posted by: David R | Feb 13, 2012 9:10:56 AM

As as often been stated on this site, increased federal spending represents increases in taxes, whether current or deferred.

The budget, an outline of which was released by the White House Friday night, will show a higher deficit this year than in 2011, up from $1.3 trillion to $1.33 trillion.

In addition, the projected decline to $901 billion in 2013 is dependent on enactment of the president's policies, including spending reductions agreed to last summer and ending George W. Bush's tax cuts for the wealthy at the end of this year.

(Really have to love the "unbiased" USA Today using Obama's script for labeling the "Bush tax rates" as "Bush's tax cuts for the wealthy."

Posted by: Woody | Feb 13, 2012 10:49:31 AM

They're coming after the 401K inheritances because they can't find a measly $400m a year, they've instituted a fee on refi's & new mortgages to cover dipping into SS early via the P/R tax "cut." 3% increase on cap gains for Obamacare 2013....

I thought he wanted higher taxes?

Posted by: Sandy P | Feb 13, 2012 12:31:09 PM