If he follows through on this, its a Tactical Admission that Raising Taxes is bad for the Economy.

jp on November 24, 2008 at 12:27 AM

Eh. They’ll just spin it as the disastrous Bush administration sinking all boats. The rich are the new poor and therefore cannot have their taxes raised.

Thats really the problem, isn’t it?
The amendment that gave congress the power to tax income failed to come up with anyway of checking that new power, so now the federal government uses the income tax to exert control on areas otherwise forbidden to it. Too many degrees of freedom in the tax law.

Count to 10 on November 23, 2008 at 2:39 PM

Slippery slope. Can we get a revote on that amendment since it is still questionable if it was truly ratified?

Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.

Buy Danish on November 23, 2008 at 7:07 PM

Pray your parents/grand parents kick the bucket in 2010 and not in 2011.

He would be wise to study how FDR handled the depression and avoid the policies that FDR used to prolong it.

*
Tax rates will rise substantially in each tax bracket, some by 450 basis points;
*
Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate;
*
Married taxpayers will see the marriage penalty return;
*
Taxpayers with children will lose 50 percent of their child tax credits;
*
Taxes on dividends will increase beginning on January 1, 2009;
*
Taxes on capital gains will increase, also beginning on January 1, 2009; and
*
Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.

My fellow Americans,

I tried resisting the urge to raise taxes. But now that unemployment is down to 8.5%, it is time to act. And to make up for lost time, instead of $250K and up getting spanked, anyone making $50K and up is getting spanked.

Once the tax code is open to tweaking, who knows what kind of sausage will come out. What’s the Las Vegas line on whether 95% of us still get that promised tax reduction?

Mark30339 on November 23, 2008 at 2:26 PM

Thats really the problem, isn’t it?
The amendment that gave congress the power to tax income failed to come up with anyway of checking that new power, so now the federal government uses the income tax to exert control on areas otherwise forbidden to it. Too many degrees of freedom in the tax law.

the marriage penalty is fully restored

…at which point a number of San Francisco residents suddenly become thankful for Prop 8.

Truth be told, the first round of tax cuts, which were across-the-board income tax cuts, did nothing to stimulate the economy. The second round, which were capital gains cuts, did.

angelat0763 on November 23, 2008 at 11:56 AM

Half true… the 2003 tax cuts also included the taxes on the top 2 brackets… people who typically invest more of their money than the lower income Americans.

The quarter following that cut was the biggest quarter of growth in 20 years.

Also compare Clintons first and second terms… the first term started with the tax hikes, the second started with the tax cuts (most notably capital gains going from 28% to 20%). Take any metric you want – including the surpluses that came after massive tax cuts – and tell me which of the 2 terms had the stronger economy.

Truth be told, the first round of tax cuts, which were across-the-board income tax cuts, did nothing to stimulate the economy. The second round, which were capital gains cuts, did.

So maybe Obama could just allow the first batch to expire, raising taxes on all of us……not my favorite plan of action but it would be interesting to see if how the Obamabots would defend it.

angelat0763 on November 23, 2008 at 11:56 AM

Is that how the sequence went? I thought the 2001 tax bill was just a rebate, rather than a tax cut, but I could easily be wrong.