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Right Turn
Posted at 09:22 AM ET, 05/23/2012

Doing nothing about ‘taxmageddon’

The Post reports: “Tax hikes and spending cuts set to take effect in January would suck $607 billion out of the economy next year, plunging the nation at least briefly back into recession, the nonpartisan Congressional Budget Office said Tuesday. Unless lawmakers act, the economy is likely to contract in the first half of 2013 at an annualized rate of 1.3 percent, the CBO said, before returning to 2.3 percent growth later in the year.”

To prevent “taxmageddon,” Republicans want to extend the Bush-era tax cuts; President Obama refuses to discuss tax reform with Congress; Even worse, he’s threatening to veto an extension of the tax cuts if it includes those making more than $250,000, thereby socking it to the very individuals and small-business people who we need to invest, hire, etc.

To put is differently, Obama would rather do nothing now (that might prevent a slowdown) and is willing to endure a recession so he can stick it to the “rich.” This approach perfectly exemplifies his ideological attachment to income distribution at the expense of growth and jobs. Really, isn’t this pretty much why the recovery never got off the ground?

Harvey Golub, former CEO of American Express, thinks so. He writes:

[T] his administration has been overtly hostile to business across the economy except for progressive favorites like electric cars or wind and solar power. It has tightened regulatory screws on the coal industry and all other fossil-fuel providers, enacted health-care “reform” based on false estimates of its likely costs and effects, unleashed a hostile National Labor Relations Board on businesses, and passed financial regulations in the form of Dodd-Frank along with hundreds of other regulatory actions that put increased burdens on the private sector. Meanwhile, the president has yet to pass a budget or announce a plan to rein in government expenditures.
The president has said, over and over again, that he wants to increase taxes on businesses — small and large — and on financially successful individuals. He doesn’t quite articulate the point that way, but that is the effect. . . .
In this negative environment, businesses are less willing to invest in the future, and individuals are less willing to spend what they can. Meanwhile, savers and retirees have seen much of their income decline because of low interest rates. The massive costs of all the stimulus have been wasted because of the heavy counterweight put on the economy by the administration’s antibusiness and pro-redistribution policies.

Senate Majority Leader Harry Reid is no better. He says there will be no deal before the election. Why? Well, Congress can’t get anything done in an election year. Or in a non-election year. But vote back in those Democrats!

Only in D.C. and among the mainstream media is such abject irresponsibility not cause for outrage. The president and Senate leadership don’t want to do their jobs because voters might hold them accountable. Instead, they want to walk us up to the recession cliff, get reelected and then . . . what? They don't say. Where is Obama’s comprehensive tax reform plan? His entitlement plan? Maybe he doesn’t have one or maybe it’s so appalling that he couldn’t get elected if he showed his cards.

Th question for Americans is whether to reward such dereliction of duty. Have we not seen the cost of a leaderless ship of state?

By  |  09:22 AM ET, 05/23/2012

 
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