12/15/10

Economic Academics



The Left is playing mathematical semantics. The argument is hiking tax rates versus maintaining them. There is no tax cut. No one is giving money to the rich. Forget class warfare. Take a person who can barely make ends meet every month. Come the new year, hike his taxes and he cannot make ends meet at all. This is bad. But keep his taxes the same and he continues to barely make ends meet. His situation does not improve. It is sustained.

If Congress does nothing, taxes go up. If Congress acts, taxes are maintained. Nothing changes, but hopefully things won't get worse. However to actually cut taxes by lowering current rates, would free up money. That person who barely makes ends meet every month can now meet his ends and perhaps pay off a loan, go on vacation or buy a Wii for everyone on his Christmas list. Cut taxes and the economy may improve.

President Obama is doing something very clever. By calling sustaining of the present tax rate a cut, he positions himself so when nothing improves he can say, "You see? I told you cutting taxes won't work! It makes things worse!" Just remember… there are no tax cuts.

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