Archive for the ‘Economic Stimulus’ Category

Payroll Tax Holiday is not Perfect, but Far Better than Inaction

Congress is now shadow boxing about the payroll tax holiday that is set to expire at the end of this year. Currently, workers are getting a break equal to 2% of earnings up to the Social Security taxable maximum of $106,800. The temporary tax cut was part of a deal struck last year to extend […]

Obama’s Cap on Tax Deductions: Not What It Seems

It turns out that President Obama’s plan to limit the benefit of itemized deductions is much more than that. Not only would it reduce tax savings for mortgages, charitable gifts, high medical costs, and the like, it would also curb tax breaks for owners of municipal bonds, workers who buy health insurance, and those who earn […]

Obama’s Jobs Plan: Great Theater, Uncertain Policy

When you get right down to it, the jobs plan President Obama proposed before a joint session of Congress last night was built on three elements:  A large payroll tax cut, lots of new spending on public infrastructure, and a promise that its $447 billion cost would be paid for with yet-to-be disclosed tax hikes and […]

Will Romney’s Modest Capital Gains Tax Cut Hurt With the GOP?

Welcome to the season of jobs plans. GOP presidential hopeful Jon Huntsman offered his last week. President Obama will propose his before Thursday night’s football game.  But today is GOP presidential hopeful Mitt Romney’s day. And at least when it comes to tax policy, he veers a bit to the left of the new Republican orthodoxy.  To be […]

The Do-Nothing Fiscal Fix: Recipe for Recession

Given Washington’s endless partisan nastiness—and thanks to some updated estimates by the Congressional Budget Office–it seems like a good time to revisit an old idea: What would happen if Congress and the White House just closed up shop for a couple of years and let fiscal policy run on autopilot? The question is not so […]

What Can Obama Do to Fix the Economy?

With the U.S. economy spinning its wheels, demands are growing for President Obama to “do something.”  But considering the nature of the slump and the political dynamics in Washington, there may be very little he can do to get the economy out of the ditch. Obama doesn’t make his life any easier when he makes […]

Unfinished Business after the Debt Deal

Congress headed off for its summer vacation yesterday, exhausted after the protracted wrangling over the debt limit that ended with a whimper when President Obama signed the bill that lets the government continue to pay its bills. Few people were happy with the result—the best you can say for it is that we won’t have […]

The Paradox of Thrift, or What to Do with My Payroll Tax Cut?

A major goal of last December’s Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka extending the Bush-era tax cuts) was to boost the economy by avoiding scheduled tax increases and, at the same time, adopting a few new tax cuts. Both steps, supporters claimed, would put more money in people’s pockets […]

Johnny Depp and the New Tax Law

When the President signs the big tax deal later today, will he be cutting income taxes for most families or sparing them a tax hike? Will he be slashing the estate tax or resurrecting it? Those questions have a clear answer in the official budget world: the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation […]

The Obama-GOP Tax Deal May Be Bipartisan, But It Isn’t Stimulus and It Isn’t Smart

A modest thought experiment: Here is a check for $858 billion. Your job is to boost short-term economic growth. What would you do with the money? President Obama and a huge bipartisan majority of the Senate have given us their answer (and the House is likely to add its support tonight or tomorrow): They’d extend […]