Friday, June 10, 2011

Tax Cut Election Dilemma

We are being warned by Democrats and the liberal media that we must not, under any circumstances, elect Republicans because they will cut taxes. Republicans are the party of tax cuts and that is what got us into this economic mess to begin with. Tax cuts are disastrous and if we elect Republicans they will perpetuate the policy of cutting taxes and the nation will go down the drain. We hear you.

This excerpt, from Obama’s “State of the Union” speech in January 2010, after barely one year in office, might seem to strike a little bit of dissonance with that message,

"We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses," Obama said. "We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college."

Six times in a matter of a few seconds Obama patted his administration on the back for cutting taxes. But he did not stop there.

For two full years the Democratic Party controlled both houses of Congress and the White House, and they knew that the Bush tax cuts were set to expire at the end of 2010. They did not come up with any tax plan of their own to replace the Republican tax schedules, and did not even begin discussing it for the first eighteen months of their control of Congress. Then, for six months all we heard was discussion of in what form the Bush tax cuts should or should not be renewed.

Finally, Obama agreed to a full renewal of them, not for a mere one year, but for two full years. Despite his imprimatur on them, they are still referred to as “the Bush tax cuts.” But he did not stop there, he also imposed a “tax holiday” on the payroll tax for Social Security, money that will have to be replaced from federal revenue.

The Republicans, say Democrats, want to cut taxes for the rich and for businesses, while Democrats cut taxes for middle class working people. Read Obama’s State of the Union again, and consider the plan that his administration is rolling out now; a payroll tax cut on the employer side, and a reduction in the corporate tax rate, accompanied with the closure of unspecified “tax loopholes.”

We are supposed to believe that the elimination of deductions and loopholes will offset the reduction in the tax rate, and that corporations will wind up paying as much or more in taxes, but since the plan is being proposed in order to “make business more competitive” it’s hard to imagine how that can be the case.

So we mustn’t elect Republicans because they will cut taxes, but it would appear that we mustn’t elect Democrats for precisely the same reason.

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