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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Well, Here’s a Bright Idea

December 2, 1999April 22, 2012

Economic growth for the last quarter was revised from a 4.8% to 5.5%, the strongest in ages. Unemployment is rock bottom. With the economy humming brilliantly and the Fed nervous about inflation, I’ve got an idea — LET’S SCREW IT ALL UP!

OK, so the idea is not original with me. It is George W.’s idea. A trillion-dollar-plus tax cut, just at the time in the economic cycle you don’t need and shouldn’t risk fiscal stimulus.

What’s so bad about the course we’re on? More and more new jobs, more and more economic growth, low interest rates and the highest homeownership in history . . . a stock market that is already a bit giddy, to say the least, and the prospect of paying down some of the extra $4 trillion or so in national debt we piled up in the Reagan/Bush years (after the last big tax cuts). What’s so bad about all that?

And how about ol’ George W.’s spin? He’s not doing this for the thousands of well-to-do folks who sent him $1,000 each. All they’d save is maybe $30,000 or $60,000 a year, poor buggers.

No, Reuters reported, “the Texas governor, addressing the Des Moines Chamber of Commerce, laid out a seven-point plan that he said would help all Americans but especially the poor, encourage upward economic mobility and prolong the current economic expansion. ‘We need a tax system that makes it easier, not harder, to join the ranks of the middle class,’ Bush said.”

Granted, the poor pay no taxes, but this would surely help especially them . . . how, exactly?

And granted, the working poor benefit from hiking the minimum wage and the earned-income credit, which Bush’s party resists. But what’s needed for the working poor to break into the ranks of the middle class is lower taxes on the middle class and the rich, because . . . why, exactly?

And granted, a big tax cut now would very likely lead to higher interest rates. That’s not all bad for the rich, who tend to lend rather than borrow. But higher interest rates would actually be good for the average guy, inasmuch as . . . what, exactly?

I’m not saying that it would never be appropriate to drop the top income tax rate. I pay it; I’d like to pay less. But I am saying the time to do it is not at the peak of a boom. And that the honest thing to do, when you do do it, is not to say you’re doing it especially to help the poor.

You have to assume that since Alan Greenspan opposed the Republican Congress’s $792 billion tax cut (which the President rightly vetoed), he is positively horrified by this even larger one.

You should be, too.

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