On tax cuts, Obama decides to fight, Ezra Klein writes. Yesterday, the President proposed
… a one-year extension of the Bush tax cuts for families making less than $250,000 and, through his press secretary Jay Carney, promising to veto any effort to â€œextend tax cuts for the wealthiest Americans.â€ Itâ€™s a strategic decision that could have a tremendous effect on the economy â€” and thus on the presidentâ€™s chances in the fall.
Ezra says this is politically riskier than it sounds, because it could set off a market panic during the height of the presidential campaign. His argument is based on data showing that markets and job growth slumped dramatically last year during the debt ceiling fight. I’m not sure I buy that argument, but I think it would hurt Obama worse politically if he didn’t fight the extension of the tax cuts.
A New York Times economics blogger says that cutting taxes on income above 250,000 would reduce the economy:
Mark Zandi, the chief economist at Moodyâ€™s Analytics, estimates that allowing tax cuts for Americans who earn above $250,000 to expire at the end of 2012 would reduce gross domestic product growth in 2013 by $40 billion, or about 0.24 percentage points.
Allowing the â€œmiddle classâ€ tax cuts to expire would shave an additional 1.06 percentage points off economic growth. That means letting all of the Bush tax cuts phase out would cut about 1.3 percentage points from growth.
The important point politically is that the President is daring congressional Republicans to stand in the way of extending middle-class tax cuts because they are holding out for millionaire tax cuts. And Mittens, possibly for the first time in his life, has taken a firm stand. He is opposing the President —
Mitt Romney blasted President Obama’s push to repeal the Bush-era tax rates on incomes over $250,000 per year, saying it “will kill jobs.”
In an interview with WHKT-AM, a Virginia radio station, on Tuesday morning, the presumptive GOP nominee said the proposal would impose “a massive tax increase on job creators and on small business.â€
He also called it “another kick in the gut to the middle class in America.â€
Yeah, keep that up, Mittens. This is the guy who assures us there is “nothing hidden” in the tax returns he won’t release. This is the same guy who says he didn’t know anything about investments in the Caymans and Bermudas, including (one assumes) the Bermudas corporation he set up himself in 1997 and then transferred to his wife’s trust the day before he was inaugurated governor of Massachusetts.
So, one must ask, has Mittens himself ever looked at his own tax returns to see what’s in them?
At Vanity Fair, Dan Amira says everyone, including the President, is mis-reporting the president’s tax plan. The tax is on income, not individuals; it is on income over $250,000, not on individuals making more than $250.000. So if the tax cuts are continued on income below $250,000, the very rich would still get those cuts, too. And be sure to see the one chart that shows us what the tax cut fight is about.