Why 2012 could be different from 2010 when it comes to tax cuts

November 14, 2012

One reporter at Wednesday's press conference pointed out that the president had agreed to extend the Bush tax cuts in 2010, asking why we should expect him to act any differently this time around.

Obama responded, in a rather roundabout way, that the economy is in better shape now — the implication being that it's now better able to withstand higher taxes on top incomes.

"Two years ago, the economy was in a different situation. We were still very much in the early parts of recovering from greatest economic crisis since the Great Depression," he said.

The general economic outlook has, in fact, improved over the last two years: The unemployment rate in January 2010 was 9.7 percent, whereas now it stands at 7.9 percent. The housing market has finally begun to turn around, and retail sales have picked up.

Businesses, however, have still held back from investing, and we're still a considerable way off from full employment. Supporters of the Bush tax cuts for the top 2 percent say that it would punish small businesses who file as individuals. And fiscal tax conservatives like Grover Norquist are predicting that the president will cave and extend all the tax cuts once again.

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Natalie Jennings · November 14, 2012