Left-wing bloggers won't be happy to find men and women of the right celebrating the Democrats' stated intention to make tax cutting a key element in their economic recovery program.
Let's celebrate anyway, in semi-hopeful fashion.
It's reported that President-elect Obama and his congressional allies support lowering taxes by approximately $300 billion as part of a two-year, $775 billion stimulus program previously viewed as too heavy on make-work spending.
The professional economists will dilate on the shape and size of the plan, which, as of now, would give tax credits for job creation; extend a Bush-initiated provision shortening the period for depreciation of new equipment; use last year's losses to reduce tax liabilities in previous years; and, for most individuals and families, reduce taxes by up to $1,000.
"Tax cuts for the wealthy"? To see these relatively mild proposals as such, most fans of big government would have to stand on their heads and screw their eyes in dramatic ways.
The apparent idea behind the Democratic plan is the encouragement of spending and investment. A related idea is the quelling of potential Republican objections to the size of the spending plan by the concession that, well, hmmm, ahem, it can make sense to encourage the flow of money through private rather than public hands.
Who cares, in this case what motivates the thinking of Barack Obama and Nancy Pelosi so long as they acknowledge, even tacitly, the beauty of incentives (read carrots) as opposed to punishment (read sticks).
Incentives haven't had much of a cheering section lately. There hasn't been the occasion. First there was the presidential campaign, in which it became obligatory for Democrats and their backers in the mainstream media to portray low, or lowish, tax rates as a gift to the haughty rich and a cause of growing "inequality." Then there was the financial crisis, during which plenty of the haughty rich came to look like idiots, if not thieves. It's hard in such a climate to talk common sense about taxes, but common sense about taxes is what has to be talked.
A vibrant economy -- the kind we are scrambling to rebuild -- gets that way by making work and investment pay off for workers and investors. This you achieve by cutting taxes.
The need to squash Bernie Madoff (assuming a jury finds that he merits squashing), and to exact revenge on his fellow plutocrats, isn't the question before the house. The issue of regulation is separate -- or at any rate can be separated with some dexterity -- from the issue of incentives.
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