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Wrong on Bush Tax Cuts: How Do the Democrats Disguise it?

The Democrats are rethinking their plan to let the Bush tax cuts expire. Their problem is how to disguise their change of heart going into the fall election.

by
Tom Morgan

Bio

July 27, 2010 - 12:00 am

The Democrats must be ordering a lot of makeup these days — along with wigs, masks, and camouflage gear. You see, they will have to keep a lot of the Bush tax cuts and will need to disguise this.

They have to keep them because to let them expire is to stuff sleeping pills into the economy’s maw.

They have to know why small businesses are not investing in expansion. They have to know why our jobs machine, once so dependable, sputters today. They must know why investors have stashed so many trillions on the sidelines.

It is the uncertainty of future taxes and regulations. Who wants to invest in his business when he does not know what his taxes will be and when he knows big tax increases currently lie ahead.

The Democrats must know $75 billion in new taxes next year (and $1.4 trillion over 10 years, according to Michael Boskin in the Wall Street Journal) could push the economy into a coma. It could certainly stifle job growth.

The Congressional Budget Office agrees. In fact, it nearly doubles down on the figures. It estimates $115 billion next year and $2.6 trillion by 2020.

Now, they may not read the bills they pass. But the Democrats must be aware that the CBO predicts big damage if they let the tax cuts expire.

They need the makeup and disguises in order to finesse what they must do. They must keep all or most of the Bush tax cuts or they must replace them with other tax cuts. They cannot afford to drug the economy with tax increases at this stage.

How do they pull this off?

They can’t very well say Bush was right — not after attacking his cuts for years. Karl Rove will feast on them.

They can hardly admit their opponents were right — the critics who called for tax cuts 18 months ago, not to mention those who months ago called for Congress and the president to announce they would extend the Bush cuts.

Also, there is a swig of castor oil you must take when you admit your opponent is right. You must concede you were wrong. If they extend tax cuts now, they concede their recovery plan was wrong. With it, they spent, rather than cut. They gave the back of their hand to small and mid-sized businesses. In this they were wrong and dumb and out of touch with the real world of job creation.

Yes, they can say they spent the big bucks to save us from a depression. They can say that now that we are saved, they will stimulate with lower taxes. They can tell us they planned to do this all along. They will need a ton of mascara and pancake for that case.

The president already tested the first few lines of that act.  He claimed he saved us from a depression. The wig slipped when he went on to suggest he also saved a few million jobs. Perhaps he was auditioning for work in a comedy club when he leaves Washington. Abbott and Costello. Obama and Gore?

The Democrats’ opponents are trying to two-step them into a corner these days. Orrin Hatch begged them, in USA Today, to stop the tax hikes. “How would it look if we danced to Orrin’s music?” That question makes them toss and turn at night.

Newt hums the same tune as Orrin. He also smirks when he suggests they cut taxes — and spending. They probably kick their Cheshire cats these days.

They no doubt are tempted to mix and match. The could allow tax increases on higher earners, while they give lesser earners tax breaks. They may feel that would work wonders for them in November.  Perhaps it would. But when Congress’s approval rating sits below that of child molesters (at 11%, per Rasmussen), all bets are off. They clearly have misjudged how the public would feel about various issues the last 18 months.

If they don’t cut taxes, they are cruisin’ for another bruisin’, in the form of  recession. If they do cut them, they may get a snoutfull of humble pie. And lipstick on that snout will probably not protect them.

They are in a quandary — and they deserve to be.  Poor thinking and awful policies should come home to haunt people.

Tom Morgan is a money commentator and creator of the radio program "Tom Morgan's Moneytalk."
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