Tuesday, September 7, 2010

Bush Tax Cuts - #2109 - Peter Orszag: On Nation, Two Deficits - New York Times

The nation faces a nasty dual deficit problem: a painful jobs deficit in the near term and an unsustainable budget deficit over the medium and long term. This month, the Senate will be debating an issue with significant implications for both — what to do about the Bush-era tax cuts scheduled to expire at the end of the year. In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it. Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.  Read more.......

Orszag: Extend All Bush Tax Cuts Two Years - Hot Air - Peter Orszag kicks off his post-White House career as a New York Times columnist by opposing his former boss on tax policy. Barack Obama has spoken in favor of making the middle-class portion of the tax cuts permanent, but opposes extending the tax cuts for the higher earners. Orszag wants them all extended two years, noting that raising taxes on anyone in a period of low consumer demand is asking for trouble. However, Orszag argues against making any of them permanent, offering a false argument about the deficit:  Read more........

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