Monday, December 7, 2009

Deficit Spending Without End

The WSJ reports:

Democrats in the House introduced a bill to extend tax cuts for businesses and individuals for another year, in a package totaling $31 billion.

The bill would renew a raft of provisions scheduled to expire Dec. 31, including tax breaks important to business such as the research tax credit and faster depreciation for restaurants and retail stores.

The costs of the tax-break extensions would be offset by a proposal to tax private-equity and hedge-fund manager pay at ordinary income rates up to 35% next year. That proposal, however, lacks support in the Senate.

These tax cuts are little more than vote-buying. The lost revenue will be printed by the Fed or borrowed. The resultant inflation or future taxes will cost no specific politician in office any votes in the near-term and perhaps never at all.

Washington has lost its way.

Copyright (C) Long Lake LLC 2009

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