Donald Lambro

WASHINGTON -- Rep. Sander Levin of Michigan, the powerful Democratic chairman of the tax-writing House Ways and Means Committee, seems determined to kill the economic recovery or at the very least, slow it down.

Levin, who took the reins of the committee when Rep. Charlie Rangel, D-N.Y., was forced to step down in a hail of ethics charges, said Monday that the Bush tax cuts will be allowed to expire at the end of this year -- which means the top tax rates on wealthier workers will shoot up just when the economy still remains vulnerable.

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Levin's home state has been in a depression for a number of years, and apparently the congressman must think it now needs a good dose of tax hikes to make sure that economic growth doesn't get out of hand or that upper-income Americans don't make more money than he and Barack Obama say they should.

While the convalescing national economy appears to be slowly getting back on its feet, it still looks more than a bit shaky in many sectors, from real estate, housing starts and construction to retail sales and bank lending. The unemployment rate is still skirting 10 percent, and nearly 20 states report their jobless rates remain in double-digit territory.

If that doesn't worry Levin and his tax-happy Democratic colleagues on the Ways and Means panel, consider last week's little-noticed cautionary decision by a committee of academic economists.

The National Bureau of Economic Research's Business Cycle Dating Committee thinks the recession ended about the middle of last year, but it isn't ready to officially say so -- at least not yet. They think there is a chance the economy could begin shrinking again or that revisions in earlier data could reveal further weaknesses or setbacks.

"Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature," the panel said. "Many indicators are quite preliminary at this time and will be revised in coming months."

If that's not enough to give Democratic policymakers pause in their rush to raise taxes on small business owners, investors, venture capitalists who come up with the money for new business expansion, or anyone else in six-figure territory, Fed Chairman Ben Bernanke has similar words of caution.

"Significant restraints on the pace of the recovery remain," he told the Joint Economic Committee of Congress last week. Don't even think about the unemployment rate falling significantly this year when it is still going to be in the 9- to 10-percent region, he said, and next year doesn't look so hot, either.

Yet there was Sander Levin speaking at the weekly National Press Club luncheon, saying he was perfectly comfortable with the approaching end-of-the-year expiration of former President Bush's across-the-board income tax rate cuts in the midst of an uncertain economic environment.

Not all of the Bush tax cuts, mind you. The new, lower 10 percent rate for lower-income workers will remain, as will the middle-income tax cuts and the doubling of the child tax credits. But the two highest tax rates will revert back to their 36 percent and 39.6 percent levels (up from 33 percent and 35 percent).

"The divergence of income we've seen in the last decade means we should keep the middle income tax cuts and let those for the wealthy expire, and I think that is going to eventually happen," Levin said.

But this isn't the time to be raising taxes, not when the economy is still struggling; not when 16 percent of the workforce is unemployed or underemployed, and job creation is weak and likely to remain so for the next several years; not when major sectors of the economy are still in the cellar, with no visible signals that they will climbing soon.

Even the liberal Washington Post, while acknowledging the end of the Bush tax cuts "would be, for the most part, fine with us," notably adds that "the timing, at the beginning of an economic recovery, could be problematic." No kidding.

Levin, who is in no danger of losing his job, as many of his constituents have, hasn't a clue about what it takes to create jobs: encouraging private investment and capital formation through lower tax rates on income and capital gains, which will unlock venture capital needed to spur growth in new industries.

In his acidic, class-warfare remarks at the National Press Club, Levin talked ruefully about how much wealthy Americans make as a share of the nation's income. Well, he is going to fix that by taxing that capital away so Congress can put it to better use in more spending stimulus bills, and share it with those who have less.

But cutting up the nation's economic pie into smaller slices is no way to fuel America's private-sector engine of growth. And confiscating capital by raising taxes on the rich will not create the jobs we need to keep up with the growth in the population.

Levin, an unrepentant New Deal liberal, still believes public works bills like Barack Obama's failed spending stimulus will pull the economy out of its lethargy when all the money is spent. He's got a long wait.


Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.