The Amazingly Popular Bush Tax Cuts
By Randall Holcombe • Wednesday December 26, 2012 9:26 AM PDT • 3 Comments
As we prepare to go off the edge of the fiscal cliff (no big deal, I argue here), one thing all parties agree on, amazingly enough, is that they want to keep the Bush tax cuts. These are the tax cuts the Democrats have vilified, and President Obama campaigned against. Now, everyone wants them to stay.
President Obama wants to keep them for everyone except “the rich,” which he defines as having a household income above $250,000. Republicans in Congress appear to be willing to go along with the president, but want to redefine rich so the income threshold is higher. $400,000? $1 million? It hardly matters (except, of course, to the people who will pay the higher taxes). The difference in revenues from extending the tax cuts for those with incomes below $250,000 and for everyone is small enough that it is overshadowed by the rounding error in spending estimates.
It is not clear at this point how the fiscal cliff will be resolved, but one thing that is clear is that the Bush tax cuts will become permanent for almost everyone. The Democrats — and the president — who once vilified them are now fighting to keep them! Isn’t it interesting that President Bush’s tax policies are the thing that the Democrats are fighting the hardest to keep as they negotiate the federal budget?
Tags: Budget and Tax Policy, Economics, Politics, Taxation 
And keep in mind the “Bush” cuts were so villified by Democrats that they insisted on the expiration date as a compromise to their initial passage.
No original expiration date, no current ‘crisis’ and no or little impact on policy and regime uncertainity attributed to this part of tax code which has hampered economic planning since the shift in Congress to Dems in 2006.
Randy has convinced me that, in a relative since, going over the cliff is no big deal and would be less harmful than any porposal which postpones spending cuts into the future.
John P. Cochran | Dec 26, 2012 | Reply
Has no one yet figured out that these tax cuts, if hisobamaness gets his way will most directly affect the members of Congress and their BIG BUSINESS SUPPORT?
For myself, I love it as it has no shot in hell of bothering me at $250K, but think of those in Congress who make so much more and will have to pony up more to pay for their own excesses!!!!! just got to love irony
Jim Tuggle | Dec 26, 2012 | Reply
No Jim, those in Congress will not have to pay, trust me. The “tax the rich” policy is such a good one simply because there simply are not enough stupid rich people to make it work. Remember, it is the misnamed “income” tax that we are talking about. Any “rich” person with two brain cells to rub together do not collect “income”, instead they take 100 year loans against their “businesses.” You cannot tax loans, and the payments are not due until you are deceased. Anyone smart enough to be rich, is smart enough to figure that one out, and most already do…. “tax the rich” is just one more way to kick the can down the road. Obama only needs to fool us for 4 more years, then it’s someone else’s problem…
joe4liberty | Jan 3, 2013 | Reply