On tax cuts, Obama picks a fight - The President makes a case for social justice..

[Pirate Smile]

On tax cuts, Obama picks a fight
The President makes a case for social justice. It's time for the wealthy to pay their fair share



-snip-
Repealing the Bush tax cuts for the wealthy had been a plank in Obama's platform since the 2008 campaign. But in recent weeks, as it became clearer and clearer that "Recovery Summer" was fizzling, and one prominent Democrat after another began hemming and hawing over whether it was a good idea to impose any kind of tax increase at all, the writing seemed on the wall. The Democrats would cave, again. Edmund Andrews, the former New York Times reporter and chronicler of economic affairs, immediately labled Orzag's opinion piece a "trial balloon" -- presumably pre-approved by the White House, for keeping the tax cuts in place.

-snip-
Perhaps he did. But if so, one wonders what the reaction was. Because according to the current New York Times reporter Jackie Calmes, President Obama plans to announce today that he will not seek an extension of the tax cuts for the wealthy, thus setting up a direct confrontation between the administration and Republicans and wavering Democrats.

What is the president up to? At the same time as he plans to endorse repealing tax cuts for the wealthiest two percent of the population, he is also recommending a new tax write-off directly aimed at the business sector. With the economy continuing to suffer, one can be sure that Republicans -- and many economists, including Obama's own former budget director -- will argue that any tax hike is bound to be anti-stimulative. How can Obama, on the one hand, promote a set of tax cuts that will supposedly encourage investment and boost the economy, while raising taxes on the same people expected to make those investments?

-snip-
Here's what the President should do (and appears to be doing): Make this about fairness.

Not only did the wealthiest Americans benefit the most from the anything goes Wall Street boom years, but they paid the smallest price for the economic collapse. While millions of Americans lost their jobs and their homes, they sailed right through. By calling for the repeal of the Bush tax cuts for the wealthy, Obama is putting down a political marker, and declaring that the rich must pay their fair share of the burden. Here's a message anyone can understand: I'm going to raise taxes on the rich and spend money directly creating jobs through infrastructure investments. With an election looming, that simple declaration tells the Democratic base whose side the President is on. It's a direct invitation to a fight to voters who are spoiling for a tussle.

And why not? The other side declared war on day one of his presidency -- it's high time to return the favor.

http://www.salon.com/technology/how_the_world_works/2010/09/08/obama_picks_a_side/index.html

[dkf]

1. He owns this economy anyway.

If raising taxes is anti stimulative he will be the first to get heat.

[ClarkUSA]

5. How so? Bush II left a nation teetering on another Great Depression and you're blaming Obama?

"raising taxes is anti stimulative"

How interesting. That's a Republican mantra. So is blaming Obama for the shithole mess this economy is in, thanks to BushCo and the GOP.

[girl gone mad]

12. Reducing the deficit would be anti-stimulative.

Raising taxes increases demand for dollars, which is deflationary. Not generally the best move if you're trying to combat deflation.

[hedgehog]

2. Forget social justice; if we want to cut the deficit we'll have to take

Willie Sutton's advice and go where the money is!

[Ineeda]

3. K&R

[JCMach1]

4. In favor of a corporate tax break...

that doesn't seem to do anything on the job front (see Reich's article on the proposal today).

I would love to clap for a progressive move on taxes by Obama if he did something progressive with the proceeds.

[Name removed]

7. Deleted message

Message removed by moderator. Click here to review the message board rules.

[JCMach1]

9. Let's see how this plays when you take the break from individuals and give it to corporations...

I don't think that's going to play well... much less thinking about the progressive nature of it.

As for the possible job creation, it would be nice to see the numbers on that.

[JCMach1]

14. Responding to myself, I feel a little better after the speech...

Ok Mr. President, if it works... your the man!

[ClarkUSA]

8. Reich is wrong. Freeing up cash to invest in growth will create jobs and increase demand for goods.

Obama to Propose Tax Write-Off for Capital Investments

WASHINGTON — As part of his emerging program to jolt the economic recovery from its stall, President Obama will call this week for allowing businesses to deduct from their taxes through 2011 the full value of new equipment purchase, from computers to utility generators, to increase demand for goods and create jobs.

The upfront deduction would allow businesses of all sizes to keep more money now and would give large corporations, many of which are sitting on cash because of uncertainty about the economy, an incentive to spend and invest.

http://www.nytimes.com/2010/09/07/us/politics/07tax.html?hp

"Reich is the outlier in Democratic policy circles. This discussion goes back to the 1992 campaign, when wonks like Rob Shapiro (Clinton) and Lester Thurow (Tsongas) advocated for tax policies that promoted productive investment and long-term productivity rather than simply cutting baseline corporate income tax rates.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=433543&mesg_id=433575

"Reich has never figured it out. Reich has always underestimated the value of capital investment as a driving factor in economic growth. He bitched and moaned about this endlessly in the Clinton years, and his influence evaportated rapidly. Since the Clinton years gave us a damn good economic climate, I really can't give Reich a ton of credibility anymore."

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=433&topic_id=433543&mesg_id=433547

[girl gone mad]

13. Reich hasn't been wrong so far..

and I don't think he's wrong here, either.

There are absolutely no constraints on capacity right now so it doesn't make sense to push tax cuts that are designed to stimulate capacity investment.

[w4rma]

10. In fact, this particular one promotes shedding more jobs. (nt)

[Whisp]

6. YA BABY!!!

YA!!!

lord tunderin jesus, make it be so. make it so.

[flamingdem]

11. Amen to that - time for Richie Rich to give back a little nt