Apr. 29th, 2009 09:29 am:
The George Bush Tax Hike of 2009

In 2001, George Bush had a problem. He wanted to give tax cuts to the rich, but he didn't want it to be obvious how much this would cost the middle class taxpayer or the national debt, and budget proposals come with 10 year cost projections. So the Economic Growth and Tax Relief Reconciliation Act of 2001 gave the rich a variety of tax cuts that would expire well before 2011. George Bush passed his tax cuts by claiming that they were temporary and short-term, because that's the only way that the numbers didn't start looking ludicrous.

Of course that was never the plan. The 2003 Congress didn't watch these temporary, short-term tax cuts expire; they voted to extend them a few more years with the Jobs and Growth Tax Relief Reconciliation Act of 2003. But just for a few more years to preserve the illusion that the cost would be minor and temporary. A few conservative groups tried to do the honest thing by pushing to make the tax cuts permanent which would have at least clarified what they actually wanted to do and how much it would actually cost us, but it never happened because the reality was too bitter a pill for even Congress to swallow.

And that's what bugs me about calling Obama's recent tax hike on the rich both "Obama's" and "a tax hike". He's allowing Bush's intentionally short-term tax plan to expire on schedule. He's letting Bush's plan play out exactly as Bush designed it to play out. If Republicans want to blame anyone they should blame the 2001 and 2003 Congress and their "temporary tax cut" charade. I thought I remembered one of Obama's campaign pledges being ending this practice and honesty about cost projections, but I can't find a citation and it doesn't seem to be in the promise tracker.

If you want to see an even more egregious example of 10 year budget impact malfeasance check out how in 2001 Bush eliminated the estate tax starting in 2010. No better way to disguise the ten-year impact than to make sure it starts ten years from now.

To be clear, I'm not saying that Obama's only modification to the tax code is sitting back passively while Bush's tax cuts expire, just that this is a major and often overlooked and mischaracterized component.


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