Yesterday, in an attempt to reach out to Republicans and jump start the economy, President Obama proposed new tax breaks for businesses, which would allow them to write off the cost of new investment in plants and equipment through 2011. While Republicans have largely refused to support anything put forward by Obama, they have been incessantly demanding tax cuts for the past year, so one would think they would support Obama’s plan. “After 20 months and more than $1 trillion down the Keynesian drain, President Obama is discovering the virtue of tax cuts,” the conservative Wall Street Journal editorialized, adding, “Pass the smelling salts, we just fainted.”
In an interview with the National Review, Mississippi Gov. Haley Barbour (R), whom Politico recently dubbed “the most powerful Republican in politics,” called Obama’s proposal “very good.” However, in keeping with the GOP’s reflexive opposition anything to Obama supports, Barbour said the “problem” with Obama’s plan is that “we do not know how he will pay for it”:
Barbour says Obama’s push for a tax write-off for business capital purchases is “very good,” but nothing new. “That was part of Senator McCain’s platform,” he observes. “If they would adopt the rest of the McCain economic plan, I think we would make some progress.”
“Here’s the problem with what the president proposed: We do not know how he will pay for it,” Barbour says. “If he is planning on other tax increases, then he will wipe out the benefit and the positive effects of these proposals — replacing one tax cut with another tax increase. The devil is in the details.”
If Barbour suddenly cares about how tax cuts are paid for, how would he propose paying for the Bush tax cuts for the rich? His party’s leadership has does little else in last few months but clamor for the extension of the Bush tax cuts for the rich, while insisting they need not be paid for. Barbour himself has expressed strong support for extending these tax cuts for the rich, saying, “I don’t think there’s an economist in the United States that thinks when you’re trying to get out of a recession and to create jobs, you ought to raise taxes.”
Extending the Bush cuts for the wealthiest two percent of Americans will cost $830 billion in lost revenue over the next ten years, far more than $180 billion price tag for Obama’s plan, yet Barbour has never expressed any concern about paying for Bush’s tax cuts — just Obama’s.