Another stimulus, just like the other stimulus
I'm just surprised greatly by the unwillingness of people to remember the past. The graph at the right from an article by John Taylor last year illustrates that temporary tax cuts do not work.
This is why the House GOP is driving me crazy with their insistence on a two-year extension of cuts for all (including the top bracket.) And why the Democrats are proposing it to try to push the tax increase to be an issue in 2012 is equally confounding.
As to the business tax cuts, I like William Dunklelberg's observation, “If you give a small business guy $20,000 he’ll say, ‘I could buy a new delivery truck but I have nobody to deliver to.’” Steve Gandel also notes that these types of investment expensing don't reach all kinds of investment, just those with relatively short time horizons.
(My comments on the Bush tax rebate in 2008 are here.)
Cross-posted and comments welcome at SCSU Scholars.
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