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After a slew of economic stimulus packages, bailouts and government takeovers, congressional Democrats should be ready to hang a "mission accomplished" banner regarding the economy.
It is a wonder, then, why they appear willing to burden taxpayers with up to $3.1 trillion in additional tax increases. Barring congressional action by Jan. 1, temporary tax cuts passed in 2001 and 2003 will expire, raising taxes dramatically.
Are Democrats really willing to roll the dice with the jobs they claim to have saved or created and the economic recovery they claim to have stimulated? That's what they'd be doing by allowing the biggest tax increase in American history to take effect.
'No' To Expiration
A survey of 53 economists conducted by the Wall Street Journal found only three favored letting every individual income-tax cut expire at the end of the year, 32 favored extending them all and 11 wanted to extend them only for those making less than $250,000 a year, as President Barack Obama has suggested.
Likewise, in poll after poll the electorate has steadfastly opposed letting these tax cuts expire.
Few endangered Democrats will want to be seen as tax-hikers in a down economy, so it appears likely the income tax rate cuts for lower- and middle-income taxpayers will be extended, along with the child tax credit.
A return of the death tax and high tax rates on higher income levels, dividends and capital gains are likely, however.
Deficit Dishonesty
These would further imperil the recovery of an already-frail U.S. economy by reducing the amount of money people have for investment and cutting the after-tax returns on those investments.
Some Democrats â?? now posturing as brave deficit hawks â?? say hiking these taxes will lower the $1.34 trillion federal budget deficit and reduce the $13 trillion national debt. That is a rather astonishing argument from a Congress that has hiked spending by $3 trillion for a string of failed stimulus initiatives and government bailouts over the past couple of years.
The gigantic budget deficit and mountain of debt are due to huge spending increases in the Bush administration that were continued and one-upped in Obama's. The problem isn't tax revenues, it's spending.
Without serious spending and entitlement reforms, the nation's long-term deficit will remain incurable regardless of how many taxes are raised or by how much. Raising taxes and stifling economic recovery will only exacerbate these problems.
Reining in the federal deficit requires Congress to control spending and create a fiscal and regulatory environment that fosters economic growth.
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