Many people feel that since George W. Bush was a terrible president and the end of his administration coincides with everything being in a sorry state, that it would be appropriate to respond with new and different policies. Not so J.D. Foster and William W. Beach who argue in a new Heritage Foundation paper that more Bushism than every before is needed:
Given the high level of economic pain, policymakers need to pursue stimulus policies that work. The centerpiece of an effective stimulus policy should involve two elements:
- Extend the 2001 and 2003 tax reductions for as long as possible–certainly through at least 2013 to prevent a tax increase. Better yet, make the tax reductions permanent; and
- Reduce tax rates on individuals, small businesses, and corporations through 2013 by lowering the top rate by 10 percentage points and reducing rates by similar amounts for lower income level taxpayers.
By definition, a stimulus measure is short-term. Thus, it’s impossible for making permanent changes to the tax code to be a reasonable stimulus. Indeed, in non-recessionary times federal deficits are an impediment to growth, so this could have a seriously problematic long-term impact. Meanwhile, the idea of tax-side stimulus is to put money in the hands of individuals with a high propensity to spend the money — thus giving businesses more customers and creating labor market demand so that unemployed people can find jobs. Extending tax measures that overwhelmingly benefitted the wealthiest taxpayers doesn’t fit the bill, nor does further reductions in the top rate.
A subsidiary goal one might want to accomplish with a stimulus measure it to provide direct relief to those suffering the most during the downturn. But, again, if you’re in the top income tax bracket you’re obviously not suffering very much. Long story short, this plan would deliver nothing to those in the greatest need and would stimulate demand in the least-efficient way possible. All in pursuit of the right-wing’s never-ending goal of further enriching the richest.