Obama likely to delay tax increase
We’re not sure we’ll agree with everything President-elect Barack Obama will do to fix the country’s ailing economy. Given the uncharted waters we’re in, we’re not sure anyone can approach the problem with any degree of certainty.
But there were signs over the weekend that Obama, who promised broad-based tax cuts for the middle class during the campaign, understands that cutting taxes may be one of the single biggest boosts he can give to the economy.
Repealing the Bush tax cuts has long been a rallying cry for Democrats. Currently they are set to expire in 2010. Obama said during the campaign that he would seek to end the tax cuts for the wealthiest Americans before then. But this weekend, two of his economic advisers suggested that Obama, recognizing the gravity of the economic situation, may not seek to end those tax cuts early.
William M. Daley, an aide to Obama, said delaying the repeal of tax cuts for the wealthy “looks more likely than not.”
That is eminently sensible. The last thing anyone wants to do in a down economy is take money out of the pockets of consumers.
Obama, of course, has said that eliminating tax cuts for the wealthy was a matter of “fairness.” That’s a debatable point, and a point on which this newspaper has long been in disagreement with Obama.
In late 2008 and early 2009, as Obama prepares to take office, “fairness” may not be of paramount importance. Restoring economic vitality is. The signals of the past few days that tax cuts for the wealthy won’t be repealed anytime soon are welcome news that the president-elect realizes that.
There are also political considerations that would argue against eliminating the tax cuts early.
Obama has a Democratic Congress to work with, but the majority is not so large that he can ignore the other side of the aisle.
Indeed, he will need the help and cooperation of more than a few Republicans to get all the legislation he needs to right the economy.
We applaud Obama for recognizing the folly of raising taxes, even if it is only a postponement, and the wisdom of realizing the political realities that are a prerequisite to effective governance.