President Obama after newly elected:
President Obama’s budget chief hinted Wednesday that the president’s signature campaign issue — a middle-class tax cut — will not likely survive a budget battle with Democrats on Capitol Hill. On a conference call with reporters in advance of the president’s trip to the Hill to speak before the Senate Democratic caucus, Office of Management and Budget Director Peter Orszag indicated that, while 98 percent of the budget mark-ups in the House and Senate are on par with the administration’s budget blueprint, some campaign trail promises, like middle-class tax cuts, may get left on the cutting room floor.
President Bill Clinton in 1993 after newly elected:
Seeking to explain why he is backtracking on a campaign promise to cut taxes for the middle class, President-elect Bill Clinton said Thursday that the plan was never a major theme in his race for the White House. Mr. Clinton, speaking at a news conference a day after saying he would have to “revisit” his tax-cut plan, said Americans voted for him because of the “big things” he wanted to do.The middle-class tax cut, he said, was not among them….
Mr. Clinton spoke throughout the campaign of the need to redress declining middle-class incomes during the 1980s. He proposed a tax cut for the middle class nearly a year ago, in New Hampshire, and repeated the pledge frequently.
Link via Greg Mankiw.
First, I’ll give my personal opinion – since we are going to have a huge spending increase, I think it is a bad idea to have tax cuts.
Now having said that, contra Mankiw, I believe a middle class tax cut has already happened and, therefore, Obama has already come through on his promise. It was part of the stimulus bill.
About three weeks ago I got this email from my office payroll department:
I’m assuming pretty much everyone else noticed the same thing in their paychecks. Isn’t that a tax cut?
Ah yes, the ~$40/month. Thanks Obama!
But, if we wanted to be more precise, we should really say Thanks Republicans! Since Obama wanted almost no tax cuts in the “fiscal” stimulus bill as well – it was the Republicans that strong armed him and the Democrats into adding significant tax-cuts to the bill.
I think you kinda missed my point. I would not say “Thanks Republicans!” any more than I would say “Thanks Obama!”, because I think the tax cut was a bad idea.
But, having said that, you and are in agreement that there has already been a tax cut, and it’s a bit misleading for Mankiw not to take note of that.
What Mankiw is referring to is the specific type of tax cuts Obama had promised. He didn’t promise a payroll tax cut, he promised specific tax cuts (or more accurately, tax rebates, see here) and those promises are now being rescinded.
Semantics maybe, but still a promise unkept.
Fair enough.
So, to recap your position…
Republicans, who voted en masse against the stimulus bill, are responsible for the tax cuts in the stimulus bill. Those tax cuts were not the good kind of tax cuts, they were the bad kind. Plus, the tax cut was so small, it deserves to be ridiculed. The Republicans should be congratulated.
And to recap my position…
I got a tax cut. I with I hadn’t. I blame Obama.
Actually, I think the kind of tax cuts we are discussing, payroll tax cuts in the fiscal stimulus, are the best. If I had it my way the majority of the stimulus would have been payroll tax cuts, see why here, here and here.
But yeah, I think they were too small!