Make Your Move

Recent Talks on Fiscal Cliff Result in Interesting Concession

RSS

Government leaders are considering tax increases on the wealthy and corporations, but they admit it may not be enough.

My hopes for a meeting of the minds in the middle of the political aisle were significantly dampened today. The president announced that his plan for dealing with the U.S. debt is to double the amount of tax revenues that Republican leader John Boehner agreed to last year. The proposal is to increase revenues by $1.6 trillion over the next 10 years by increasing taxes on the wealthy and on corporations. Tax hikes on individuals and businesses had been anticipated by ITR Economics and come as no surprise. 

The interesting concession comes via White House Press Secretary Jay Carney who said that increasing taxes on the top two percent of wage earners is not enough to tame the debt and reenergize the economy. You and I have known that all along, but that is the first time I have heard a leading government official say that the move has limited beneficial impact. 

Two thoughts come to mind. One, what kinds of corporate tax increases are we headed for? Last year there was talk in Washington of reducing the corporate tax rate. That seems to be a fond memory at this point.

The second thought relates to France’s President Hollande. President Hollande has told the top wages earners that the 75% top income bracket was only for two years and only symbolic, as it will have no real impact on France’s debt problems. Wouldn’t it be nice to hear some of that Austrian-sounding economic theory come out of Washington?

 

Please or Register to post comments.

What's Make Your Move?

Leverage actionable -- and 94.7% accurate -- economic forecasts from ITR Economics, and spot unfolding business cycle trends before your competitors.

Contributors

Brian Beaulieu

Brian Beaulieu has been an economist with ITR Economics since 1982 and its CEO since 1987. He is also Chief Economist for Vistage International and TEC, global organizations comprised of over 13,000...

Alan Beaulieu

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and...
Blog Archive
Subscribe to IW Newsletters

This would be valid if only colleagues could interact. I have seen many workplaces in large organizations where only management can interact. All infomation must flow through managers. To make it worse the work layout does not support interactions. ... If you want the benefits of co-location you have to have the right management structure and the right physical structure!!!

on Feb. 26, 2013
IW Marketplace - Buy a Link Now