First, it appears his advisers have Obama rethinking his campaign plan to slap higher taxes on people in the top two tax brackets who earn more than $250,000 -- which would push the top rate to nearly 40 percent.

With the economy bleeding badly and unemployment threatening to hit 8 percent or more in 2009, this is no time to be raising taxes on anyone -- especially that sector of the economy that's responsible for most of the nation's investments and venture capital risk-taking.

That means the Bush tax cuts will remain in place at least in the first two years of Obama's presidency. Those tax cuts were not due to expire until the end of 2010 and Obama had said he would keep all of the lower-tier bracket cuts in place anyway. Now it appears the top brackets are safely in place, too, at least until 2011.

Second, it is hard to see Obama pushing his two other tax hikes that would slap beleaguered investors with 20 percent rates on capital gains and stock dividends. It doesn't take a genius to see that financial markets need more investment, not less. We need to be encouraging investments in equities that would boost stock values and restore worker retirement wealth.

Obama may not be ready to cut taxes on capital gains and dividends, which he should, but he's not about to whack the nation's stockholders, who have already seen their investments plunge by nearly 50 percent.

Third, the monster deficits he faces, worsened by the gigantic stimulus package he intends to sign, will force him to cut more deeply into the rest of the federal budget. Sky-high deficits that will easily be in the $1 trillion-plus range next year would curtail his long-term domestic spending plans on health care and education, so he will be looking for bigger budget cuts wherever he can find them.

The fear is that he will make disproportionate cuts in defense to obtain those offset savings, but that would make America more vulnerable in the war against terrorism and once again raise his party's political weakness on national security issues.

Meantime, the economy is getting the equivalent of a big tax cut in the form of plummeting gas prices that are now below $2 a gallon for regular. That is cutting consumer and business costs significantly. It couldn't come at a better time as Obama prepares to take responsibility for the nation's remaining economic ills.