The Deficit Is a Cruel Mistress
On September 19, President Obama will release guidelines for paying for his jobs plan so that all costs are offset.
From the American Prospect’s Balance Sheet.
Today, President Obama will send his new jobs plan to Congress — a key step in remedying relations between the president and the left-wing of his base. But we’re still waiting for one more proposal from the president, and this one could alienate liberal Democrats all over again. A week from today, Obama has promised a plan on how to pay for his $447 billion jobs proposal.
If addressing jobs and unemployment are Obama’s best way to shore up his base, then addressing the deficit is Obama’s way to reach out to independents and curb criticism from the right. One way to bring in more revenue from the wealthiest Americans is to raise the capital gains tax rate. In fact, some members of the Super Committee tasked with coming up with a deficit-reduction plan want capital gains to be on the table. But as the Washington Post points out this morning, both parties have been active in lowering capital gains rates over the last two years and making sure they stay low. A second source of revenue progressives would welcome is taxes on the over $1 trillion in revenue American corporations are currently holding overseas, hoping to bring back to the U.S. at a highly discounted tax rate. But as The Wall Street Journalreports today, the Obama administration is leaning towards giving corporations a big tax break on their overseas profits.
Both capital gains and repatriation taxes were a big part of Mitt Romney’s jobs plan and will undoubtedly be pushed on the 2012 campaign trail. Obama may try to beat them to it. That could be good politics but is certainly bad policy.
Pressure Builds on Deficit Panel to ‘Go Big,’ Beyond Its Mandate, in Cuts The New York Times
Capital gains tax rates benefitting wealthy feed gap between rich and poor. Washington Post
Treasury Weighs New Tax Scheme. The Wall Street Journal
Clawbacks Without Claws. The New York Times