Change? Seriously, when will we be seeing some of this change Obama spoke of for about a year?
We can split hairs on this down the page, but the bottom line is this: Obama criticized outgoing President Bush for tax-cut-and-spend policies. Now Obama proposes massive tax-cut-and-spend policy. From CNN:
President-elect Barack Obama launched his campaign Monday for a massive package of tax cuts and spending proposals aimed at reviving an economy mired in recession.
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Middle-class tax cut: Obama would offer a tax cut equal to $500 a year for individuals and $1,000 for couples. The credit would work essentially as a payroll tax credit, meaning the money could be delivered fairly quickly. Companies could simply reduce the tax they withhold from employees' paychecks.
The tax credit is likely to be offered only to those below a certain income level, but the Obama team hasn't specified where the cut-off point would be. The credit also would be refundable, meaning that even tax filers without any tax liability -- typically very low-income workers -- would receive one.
The credible criticism of Bush was that cutting taxes while drastically increasing spending will bring a deficit. This is something Obama was correct in identifying. Now that he is The Office of President Elect, it is suddenly something that works?
"We're working with Congress to develop a tax-cut package based on a simple principle - what will have the biggest and most immediate impact on creating private sector jobs and strengthening the middle class. We're guided by what works, not by any ideology or special interests," an Obama spokesperson told CNNMoney.com in an e-mail.
So, tax-cut-and-spend now works, with the difference being that the right constituent group are the recipients of the tax break. Some change. The math is exactly the George W. Bush same. Democrats were complaining that Laffer was wrong, and that marginal tax cuts do not yield higher returns. Is Laffer suddenly right? Is George Bush? Is there really a substantial difference in letting the middle class be favored to keep a slice of their earnings versus the highest wage earners?
I think tax cut and larger spending cut is the right recipe for this economic climate. Tax cut and spending freeze comes in second. Tax cut and spending spree comes in a very distant third.
Going to be a long 2009.
