Call it the Hobson's choice of The Great Tax Debate — shaft the economy now or shaft the economy later.
President Obama on Monday called for a one-year extension of the Bush-era tax cuts for single filers making less than $200,000 and families making less $250,000. It's a matter of “fairness,” he said.
Actually, it's matter of politics; the proposal will be dead on arrival in the House. The president not only further seeks to stoke the furnaces of class envy, he fuels overall tax policy uncertainty that retards the spark of any hoped-for economic recovery.
Don't count on small businesses to jump for much joy. Oh, there might be short-term tax savings, but with only a one-year extension, they really can't plan for any kind of long-term investment and expansion.
And “the rich,” those above the $250,000 threshold, certainly won't be rushing to invest and expand. Individual taxes will rise anywhere from a rate of 33 percent to nearly 40 percent. Capital gains taxes will jump from a rate of 15 percent to nearly 24 percent. And the top tax rate on dividends will go from 15 percent to more than 43 percent.
The better and obvious choice certainly is for the Bush-era tax cuts to be made permanent as the beginning benchmark for true tax purgation — across-the-board rate cuts and elimination of all loopholes.
A pipe dream? Perhaps. But anything less is a pipe bomb that surely will explode and sink the American economy.
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