Barack Obama said today that he may delay rescinding the Bush tax rates if the economy is still in recession (from AP via Yahoo News).
“I think we’ve got to take a look and see where the economy is. I mean, the economy is weak right now,” Obama said on “This Week” on ABC. “The news with Freddie Mac and Fannie Mae, I think, along with the unemployment numbers, indicates that we’re fragile.”
So, if he acknowledges that raising taxes will make the economy worse, why would he raise them at all? What is the purpose of raising taxes? If any extra revenue from a tax hike is used to pay down debt, I don’t really have a problem with it to a certain extent, but when it is used to expand government further, as it inevitably is, the economy and the citizens pay a price. There is no free lunch.
Just as interesting is the way he talks about his “tax cuts” for the middle class:
“Even if we’re still in a recession, I’m going to go through with my tax cuts,” Obama said. “That’s my priority.”
Why does he use the qualifying phrase “even if we’re still in a recession”? Many of the “tax cuts” are actually of the non refundable tax credit variety where even if you don’t pay taxes, you’ll get the credit and a check from the government. Is Obama acknowledging that even these “tax cuts” won’t be good for the economy? Is there anything about his plan that is good for the economy? Does he know?