Morning Bell: Freeze Taxes, Freeze Spending, and Go Home
Conn Carroll /
Last night, President Barack Obama emerged from negotiations with Congressional Republicans and told the American people: “For the past few weeks there’s been a lot of talk around Washington about taxes and there’s been a lot of political positioning between the two parties. But around kitchen tables, Americans are asking just one question: Are we going to allow their taxes to go up on January 1st, or will we meet our responsibilities to resolve our differences and do what’s necessary to speed up the recovery and get people back to work?”
President Obama spoke because he had come to an agreement on extending current tax rates for two more years, rather than impose a job-killing tax hike, falling short of a permanent extension needed for economic certainty. The President defended this compromise by finally stating the obvious: “Make no mistake: Allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family. And that could cost our economy well over a million jobs.” It’s great that a leader of the progressive movement is willing to recognize the link between higher taxes and lost jobs.
But, as the President also said: “I have no doubt that everyone will find something in this compromise that they don’t like.” Specifically, in exchange for extending the current income tax rates, Republicans agreed to reinstate the death tax (at 35% with a $5 million threshold), 13 more months of non-offset unemployment benefits, and a temporary 2 percentage point reduction in the payroll tax to replace the failed “Make-Work-Pay” stimulus tax policy. (more…)