Should the Bush Tax Cuts be allowed to expire?

On this Labor Day weekend a few thoughts on letting the Bush tax cuts expire for those with incomes greater than $250,000.  The rhetoric from the right is that doing so will impact those who run small businesses and consequently negatively impact job growth in these tough economic times.  Keep in mind that the expiration of these tax cuts will only raise the marginal personal income tax rate by a few percentage points.

The first question one must ask is who belongs to the two percent that makes over $250.000/year?  Professional athletes, movie stars, corporate officers of big and midsized companies, lobbyists,  etc.  In fact, only about three percent of that bunch run small businesses.  Many of these are people like surgeons, consultants, etc., who are not in growth businesses.  You can only operate on so many people or have so many clients.  So there staff level is fixed.

Of those CEO’s of small businesses that make over $250,000/year, given the choice of giving their money to the government or reinvesting it back in their company, chances are they’d reinvest in their company.  And how would this reinvestment be spent?  Perhaps on capital improvements or new hires.

So it may be that allowing the Bush tax cuts to expire will actually encourage job growth.

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21 Comments

Filed under dnd

21 responses to “Should the Bush Tax Cuts be allowed to expire?

  1. Anonymous

    Extend it for two years… Kick that can down the road a piece.

    Let the new teabagger majority ‘splain to their roots about their plan for deficit reduction.

    Let ’em twist in the wind… a bit.

  2. dog's eye view

    Good morning all, and welcome anonymous.

    Let ’em expire.

    It’s not like Obama and the Dems aren’t going to get blamed for everything anyway.

    I think the Dems should emphasize they are the grown up party, and that taxes pay for the many public services and infrastructure that keep us a first world country.

    This reverence for Saint Ronald Reagan’s economic nostrums has got to be countered, factually and hard.

    GOP economic ideology is killing us, and I can’t believe the polls that show that some voters can’t wait to get a triple dose.

  3. Anonymous

    Dog’s Eye… You are absolutely correct, they should expire… they should have never been enacted, in the first place. But that is not what is in play anymore. It’s ‘Scorched Earth’ time. It’s time to call their bluff. 

    The Saint Reganites have de-evolved to the point that their own mantra is contradictory. The less foolhardy among them know that. It’s time for their acolytes to see the truth.

    Think of extending the Bush tax cuts as a stimulus package… It will stimulate new thinking on fiscal policy. 

    • dnd

      Reagan cut taxes once in the beginning of his term, he then proceeded to raises taxes 11 times. He’s not exactly the poster child for tax cuts.

  4. TempeBev

    Let them expire. Dog had a great post and I couldn’t have said it better.

  5. This is an easy one, let em expire.

  6. dog's eye view

    Calling their bluff only works if they are ever willing to acknowledge reality. Which they don’t.

    They might just blame everything on the stimulus and incipient socialism.

    I say bring the fight to them, and hit them over and over again on the fantasy thinking.

    I know the polls look bad, but I still hope the voters will act like grown ups. Punishing the party in power is like throwing rocks at the firemen who show up to save you from an inferno.

    Remember how good it felt to start an endless war against a country that did not attack us?

    That was settling the score real good. That showed them.

    Learn something, my fellow Americans.

  7. Dooty

    the GOoPers are at it again. One sheriff claims the drug cartels now hold part of Arizona. Never mind that several other sheriffs say that is not the truth.

    http://tpmmuckraker.talkingpointsmemo.com/2010/09/mccains_danged_fence_sheriff_claims_drug_cartels_control_us_ter.php

  8. Dooty

    Yeah, D I think that is correct. same one that was in the McGrumpypants commercial about building the dang fence.

  9. Dooty

    Pinal County is just south of Phoenix so it is not really far north.

  10. TempeBev

    Pinal County is not on the border. It’s between the capitol and where the infamous “Danger” signs that the gov referred to are located, along with all the beheaded people. The sheriff is a mini-me of Sheriff Joe. They’re r-wing blowhards.

  11. dog's eye view

    I am hearing rumors that Obama gave a terrific speech today and called the Republicans out for their obstruction.

    Anybody see it? (I was washing a car …)

    Oh. And Happy Labor Day to all.

  12. dnd

    E.J. Dionne had an interesting idea. Extend the tax cuts for everyone making less than a million dollars/year. That way the messaging could be that the Republicans are for tax cuts for the millionaires.
    In addition, 80% of those who make more than $250k, make more than a million, so the difference in revenue wouldn’t be that much.

  13. dog's eye view

    Thank you, AP.

    Check out the lede on Obama’s R&D proposal from today’s paper.

    “Seeking ways to spur economic growth ahead of the November elections, President Barack Obama will ask Congress to increase and permanently extend [R&D] tax credits for businesses, a White House official said Sunday.”

    Yeah, AP, it’s all about winning the midterms. Obama has no interest in the proposal otherwise.

    At least our local paper got the headlines right: Obama’s goal: Promote research

    and Tax Credits: President is calling for $100 billion to restore jobs and investment.

    OTOH: why give the GOP all August to whine about pork and buying an election (something they would never do).

  14. dnd

    Oh, yeah, happy Labor Day.

    It’s not a happy Labor Day for fire fighters. There’s a huge forest fire west of Boulder:

    http://www.denverpost.com/news/ci_16005028

  15. dog's eye view

    I think EJ Dionne is on to something, and will be interesting to see if the White House picks up on it.

    Much like the fig leaf family farm exemption to the “death tax”, make it clear the actual beneficiaries are not the stated beneficiaries.

  16. Howdy peeps,
    Hope you all had a good long weekend.

    The definitive end of summer song!

    http://bgarens.wordpress.com/2010/09/06/the-definitive-end-of-summer-song/

  17. dnd

    Summertime’s done come and gone, my-oh-my.

  18. dog's eye view

    Dang it, dnd. Too speedy.

    Posting former OMB head Peter Orzag’s NYT op ed on keeping the tax cuts for everyone (including Rupert Murdoch) and having them expire in 2 years.

    Wait, even better: here’s the NYT reader comments, sorted by “most recommended.”

    They do not agree much with Mr. Orzag, nor do I.

    http://community.nytimes.com/comments/www.nytimes.com/2010/09/07/opinion/07orszag.html?sort=recommended

    However, Orzag may understand what could get through this grievous Congress better than I do. Craven assholes.

    Link to Orzag’s essay: One Nation, Two Deficits

    http://www.nytimes.com/2010/09/07/opinion/07orszag.html?hp=&pagewanted=all

    Orzag posits two deficits: “a painful jobs deficit in the near term and an unsustainable budget deficit over the medium and long term.”

    I would say we have at least three deficits, with that of rational, civil thinking being the most dangerous. Not to mention the deficit in bipartisan collaboration on display in the Congress of No.

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