The Impact of Expiring Tax Cuts: Can We Get Names?

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Saturday, 13 November 2010 07:50

The Post told us about the prospect that the Bush tax cuts would expire in January:

"The stakes are enormous. Millions of taxpayers could see hundreds of dollars sliced from their paychecks in January unless Congress acts. Economists say expiration of the tax cuts would deal a devastating blow to the fragile U.S. economy, and has the potential to push it back into recession."

There can be little doubt that the impact of pulling money out of the economy at this point will be negative, and given that the economy is scraping against zero growth already, it would not take much to throw it into another recession. But it might be a bit much to describe this as a "devastating blow." The expiration of the Make Work Pay tax credit and other parts of the stimulus will also pull money out of people's pockets and slow growth. The Post has never issued similar warnings about this prospect.

It would have been appropriate to refer to actual statements of specific economists rather than present overblown adjectives as being the considered judgment of the economics profession. In the same vein the article later describes the $4 trillion cost of continuing all the credits for a decade as a "budget buster." This assessment should come from a participant in the debate, not the newspaper.