Former President George W. Bush is all but invisible on the issues of the day, but his legacy has been slow to fade away.
The end of the Iraq war is not quite in sight, and the government’s domestic surveillance apparatus has not been dismantled, and the spirit of No Child Left Behind still governs education policy.
Economic policy is another story. President Obama now appears ready to let George W.’s tax cuts for the richest Americans slip away.
To be fair to the previous administration, it cut taxes across the board. It reduced income taxes for all, and trimmed the estate tax, and taxes on dividends and capital gains.
But we can no longer afford such indiscriminate generosity. Faced with a rising deficit, abandoning tax cuts for the wealthy are a better economic alternative than reductions in federal spending.
The Bush tax cuts are due to expire at the end of the year. Obama proposes to extend them ”“ except for individuals earning more than $200,000 per year (couples, $250,000). This will make for an interesting struggle with congressional Republicans, since without their cooperation, all of the Bush tax cuts will expire.
It’s always been the case that the rich get richer, and favorable tax policies favor this trend. According to the liberal Economic Policy Institute, the top 1 percent of earners received 38.7 percent of all income growth between 1979 and 2007. Higher taxes would not be a disproportionate burden on this economic class.
Taxes for those at the top will remain low from a historical perspective. And many economists expect that the higher tax will not be a significant drag on the economy.
The wealthy should take solace from the likelihood that their higher taxes will be used to improve both the nation’s infrastructure and its economy, setting the stage for healthier capital gains and dividends.
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