WSJ: No tax cuts for poor and middle-income people, but cuts for the rich:K-Drum
QUOTE OF THE DAY.... From the Wall Street Journal editorial page:
We've been saying for some time that the economy could use another tax cut....Fancy that.
If you read the editorial, it's not simply saying there should be tax cuts for all (which is the likely initial impression), but that there should not be cuts for those at the bottom
. Instead, cuts for those at the top are best. Excerpts
We've been saying for some time that the economy could use another tax cut, so perhaps we should be pleased that Washington is suddenly talking about a fiscal "stimulus." The challenge now is getting politicians to distinguish between policies that actually "stimulate" and the equivalent of dropping hundred dollar bills from helicopters.
Former Treasury Secretary Larry Summers is leading the charge for the Democrats, pushing what he calls a "timely, targeted and temporary" tax rebate of $250 per tax filer, and $500 per couple. The White House is floating its own rebate of $500 or so for families with taxable income of less than $100,000 a year. Mr. Summers says his plan would put money in the pockets of "those who would go out and spend it."
Or not. Mr. Summers is pushing a version of single-entry Keynesian bookkeeping, which holds that if the government hands out cash to workers they will spend it and "stimulate" the economy. But the money the government would thus "inject" in the economy has to come from somewhere. That is, it has to be raised in taxes or borrowed, which means it is taken from someone else in the private sector. Under more accurate double-entry bookkeeping, this stimulus is likely to be minuscule.
If Democrats really wanted to spare a President Obama from a first-year economic problem, they'd promise to make the 2003 tax cuts permanent. [keeping low rates on capital gains and dividends]
A proposal to bring the U.S. corporate rate into line with the rest of the world would help, and even better would be an across the board cut in income taxes to 30% from 35%. That would be real recession insurance.
So, instead of hundreds of dollars for lots and lots of people, the WSJ would rather see the top rate cut yet again, to 30%.
Also, if the WSJ want's to get all "accurate double-entry bookkeeping" on us, where the hell are they on the deficit, national debt, and unfunded Iraq War?