Tax Rates Are Always Changing
Mickey Kaus points out that the oft-heard GOP talking point about "permanent" versus "temporary" tax cuts makes no sense:
Congress will still be in session in two years. And in three years. There's also an election in 2012. At any point, the people's current or future elected representatives could decide to jack up taxes to the "levels favored by President Obama." Or beyond. Businessmen can never have certainty in this regard. Pols are always fiddling with their tax rates. Maybe with a "permanent" tax cut there's only a 30 percent chance their taxes will be raised, while with a "temporary" tax cut it's a 50 percent chance. But it's a matter of degree.
I don't quite see how this translates into a night-vs.-day difference between deficit-busting growth and deficit-ballooning stagnation. ... P.S.: The same goes for Milton Friedman's "permanent income hypothesis" when applied to argue that people will save "temporary" tax cuts but spend "permanent" tax cuts. Any rational person will conclude that "permanent" tax cuts might well be temporary (and "temporary" cuts are often likely to be permanent). Don't economists usually assume people are rational? Or do they assume they're dumb enough to be conned by semantics?
You really want me to answer that question?