July 25, 2010
The lead article in the Sunday Post reported on the battle over extending President Bush’s tax cuts. At one point it told readers that: “because they [the tax cuts] were expected to eventually cause huge deficits, Republicans wrote them to expire in 2010.”
Actually the story is somewhat more pernicious. President Bush had set a budget target for his tax cuts. Had they run through 2011 the cost would have exceeded his target. Therefore they wrote the law so that the cuts ended in 2010, keeping the 10-year cost within his target.
The article also includes the bizarre statement: “And with unemployment at 9.5 percent, even some Democrats are queasy about raising taxes on high earners — a category that includes many small-business owners — when policymakers are trying to encourage them to create jobs.”
Actually, there is little evidence that raising taxes on high income households will have any notable impact on job creation. (Job growth was quite rapid under the Clinton era tax rates.) Furthermore, many of the Democrats who oppose raising taxes on the wealthy have opposed many or all of President Obama’s stimulus measures, indicating that they have little concern about job creation.
It is certainly more plausible that these politicians are worried about campaign contributions from high income households, an issue that remarkably was never mentioned once in this article.
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