The Obama Tax Cuts and Other Myths

Robert Stacy McCain dismantles a mythical assertion by Frank Rich at the New York Times that Obama isn’t getting credit for his tax cuts:

This is, evidently, the Great Democrat Myth of 2010, a sequel to “We Didn’t Get Our Message Out” (2004) and “Bush Stole the Election” (2000). Whenever Democrats lose an election, their craving for self-esteem requires that they manufacture a myth to explain it to themselves and to the world. This year, they’re planning ahead!

What was included in the February 2009 stimulus package was not a “tax cut.” No one’s tax rates were reduced. Instead, there was a temporary two-year tax credit that reduced payroll witholding by — brace yourself — a whopping $8 a week:

A refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

And this $8 a week (a temporary credit, which is not the same as a “tax cut”) is the benevolence for which Frank Rich says you should be so grateful to President Obama.

Oh, yeah: And also ”averting another Great Depression,” which is a pretty neat trick with $8 a week.

The problem is that Frank Rich doesn’t understand economics any better than the president does. Neither being a film critic nor attending Harvard Law requires any knowledge of economics. For reasons of pure partisan politics, Democrats have spent nearly a decade screaming “tax cuts for the rich” as an indictment of the Bush policy, without once bothering to ask themselves whether ”tax cuts for the rich” was actually a bad idea, in macroeconomic terms.

Read the whole thing here.


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