Obama May Need To Allow Old Tax Cuts For The Wealthiest
Obama takes heat from his supporters for conceding to the Republican strategy in the tax cut battle, but did he have any other choice?
Today Obama said that his priority is to “prevent the middle-class tax increase” that would have come about if there was no agreement. “There’s some serious debates that are still taking place. Republicans want to make permanent the tax cuts for the wealthiest Americans.
“–Republicans are getting to please their constituency which believes in that from top to bottom – not just the rich but their middle-class members – without suffering any real electoral consequences. That’s why Obama caved. In the end, everybody’s taxes would have gone up. Republicans would have held to this and blamed Obama.”
Larry Sabato, political scientist at the University of Virginia
By some estimates, maintaining the reduced rate for households on more than $250,000 a year will cost the US government about $4tn in income over the next decade. But earlier this year Deutsche bank concluded that letting the Bush-era tax cuts for wealthier Americans expire would significantly slow economic growth.
In my opinion, the economy continues to grow as it always has for America but the “Trickle-Down” of wealth will no longer make it passed the first few branches of our “economic evergreen”. What does this mean for the roots of our great tree? Only time will tell, but hopefully the upper branches will not forget what is keeping them standing.