President Obama returned from a rough trade trip overseas to the hollers and hoots of Republicans who clobbered Mr. Obama’s party in the Nov. 2 election.
Until January, Congress remains in Democratic hands. They have sizeable majorities in the House and Senate. For Mr. Obama this gives him the chance to fulfill a campaign promise to continue former President Bush’s tax cuts for everyone but the highest income earners.
There has been a successful misinformation campaign about these tax cuts. The biggest false claim is that everyone’s taxes will increase if the cuts are not renewed in total. Not true.
Another claim is that the 2009 stimulus spending did not work and only the tax cuts will spur the economy. Not true.
And another claim that cannot be proved but can be discredited is that until now, the private sector has been waiting for more “certainty” in the tax future to begin a strong recovery.
The cuts will be renewed for middle class and lower income earners. Taxes on the middle class will not increase. The people whose taxes will return to pre-Bush rates, far less than those during President Reagan administration, are wealthy Americans earning over $200,000 as individuals, $250,000 for married couples filing jointly. Small business owners in this group of taxpayers comprise about 2 percent, not the masses claimed by tax cut cheerleaders. The tax increase for those earning between $200,000 and $500,000 will be about $700.
The superrich will pay more, but billionaire hedge fund managers will pay at a smaller rate than many of the secretaries who work for them.
Another fact is that the stimulus did work. The economy is no longer in decline and is growing again, however slowly. Tax cuts for millionaires and billionaires are the least effective way to increase jobs, according to the Congressional Budget Office and many others. The lost revenue also will increase the deficit by $800 billion over 10 years.
Waiting for certainly in this economy is like waiting for Godot. Businesses will invest in new jobs, as the auto companies have done, whenever the market dictates, not on the pronouncements of FOX television commentators. The cuts for the superrich are not popular with the voters. Election exit polls reported only 40 percent supported such cuts.
Republican House leader John Boehner indicated he was willing to compromise on the tax cuts before the election. No longer. No compromise.