The Tax Cut Wars Begin….

Well it has started, the tax cuts proposed by Obama are going through the grinder as we speak.  Likely they will not happen.  I remember when Tax Cuts are supposed to be a good thing, where most economists insisted that it would stimulate growth. 

I have wrote recently about the price tag of Obama’s stimulus package as being too high, and though I stand behind that, at least part of that price tag included tax cuts.  Tax cuts that were designed to go right back into the pockets of middle class Americans and businesses.

Now, “Senate Democrats Seek to Raise Energy, Infrastructure Investment, Keep Taxes Cats Low in Stimulus“.  So my question is if there is less in cost due to removing or lowering the tax cuts, why is the price tag going up?

“House Speaker Nancy Pelosi vowed Sunday that the package that comes out of the lower chamber would include no earmarks and predicted the stimulus plan might exceed $775 billion.  Some lawmakers have put the price tag at nearly $1 trillion.”

Historically it has been proven that if we give more money back to the tax payers, especially as it was proposed in Obama’s plan, that it will stimulate the economy.  More people will have more money in their pockets to buy the essential things they need, pay their bills, and so forth.  Businesses benefit also when they pay less in taxes, because then the overhead of the operation becomes lower allowing them to hold on to employees longer, and just like Middle Class American, pay their bills.

Somewhere about three to four years ago, tax cuts supposedly became the opposite in many Democrats eyes.   So let me ask, if we increase taxes will that stimulate the economy?  I am not economist, but somehow that makes no sense to me.

At least one democrat sees it the way Obama does, Governor Jim Doyle of Wisconsin disagreed with the Democrats lining up to criticize the tax breaks.

Well with a price tag of $1 Trillion there is a good chance we will see tax increases.  Why do I suddenly feel like I am working for Enron, and soon the pork belly projects will be added to this plan and fiscal responsibility will be thrown out the window.