Opinion

The Great Debate

The real fiscal cliff winner? Bush

“Tax relief is an achievement for families struggling to enter the middle class,” the president trumpeted, shortly after Congress, by sweeping bipartisan margins and after a bruising battle, had lowered taxes for almost all Americans.  “For hard-working lower income families, we have cut the bottom rate of federal income tax from 15 percent to 10 percent. We doubled the per-child tax credit to $1,000 and made it refundable. Tax relief is compassionate, and it is now on the way.”

Despite a furious counterattack from the opposition, the president had scored a major victory by securing lower tax rates for everyone in the middle class on down.

President Barack Obama last week after narrowly averting the fiscal cliff?  Nope, President George W. Bush in June 2001, signing the first set of his much-sought-after tax cuts. Perhaps the “compassionate” was a giveaway.

Now that the vast majority of those cuts — to income taxes, and to much of the estate levy and capital gains and dividend rates —have been made permanent, with a bipartisan Washington consensus hardening around the benefits of tax relief, Bush must surely be smiling in Texas — and for good reason.

Republicans have now succumbed to navel-gazing, infighting and worse. But they should instead focus on how their larger principles have prevailed.

Desperate times do not always call for desperate measures

FINANCIAL BANK OF AMERICA

This is a guest post by R. Glenn Hubbard, dean of the Columbia Business School and former Chairman of the Council of Economic Advisers under President George W. Bush, and Peter Navarro, a professor of economics at the Merage School of Business at the University of California-Irvine. They are the authors of “Seeds of Destruction: Why the Path to Economic Ruin Runs Through Washington, and How to Reclaim American Prosperity.”

These seem like desperate times, particularly for incumbent politicians facing re-election. Here, we have an economy slowing once more below a 2% annual growth rate, even as the unemployment remains persistently high.

In response, a beleaguered White House wants yet another fiscal stimulus, while the Federal Reserve wants more easy money. This desperate fiscal and monetary policy response is, however, the very definition of insanity — using the same stimuli over and over and expecting a different result.

The $300 billion tax cut: Let’s do it right

Diana Furchtgott-Roth – Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. –

President-elect Obama announced on January 8 that he is planning to use $300 billion of his $700 billion two-year stimulus package for tax cuts—but we should not celebrate too soon. Obama is proposing a series of temporary tax cuts, not permanent cuts that would hasten economic recovery.

For two years only, Obama wants to give a tax cut of $500 a year to individuals and $1,000 a year to families, at a cost of about $145 billion over the two years.  Rather than mail out U.S. Treasury checks, as was done last spring in an effort to ward off a recession, he would lower withholding rates so that the tax cut would be spread over the year.

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