When the Tax Cuts Expire

Years ago neoconservative Irving Kristol advised Republicans to cut taxes, cut, and cut again.  Apart from the economic benefit, there was the political benefit of forcing Democrats to increase taxes when they wanted to increase spending.

President Bush may be incurious and unintelligent, but it looks like he is taking Kristol’s advice.  The talk is all about how to avoid economic damage in the immediate future as taxes are scheduled to increase unless Congress does something. Patrice Hill quotes Dimitri B. Papadimitriou of the Levy Economics Institute: 

[T]ax burdens are scheduled to rise at a much faster pace than incomes or economic growth. In the past, rapid growth taxes as a percentage of the economy has preceded recessions, he said.

Right now, Democrats are blithely proposing to let all of President Bush’s tax rate cuts expire, so that there is room for lovely spending.

And then there is the Alternative Minimum Tax which disproportionately hits middle and upper income people in blue states.

Somehow I think that this happy dream is going to turn into a nightmare for Democrats.