In his economic speech yesterday, as well as in other recent comments, it appears President-elect Obama plans to follow through on his promise to cut taxes. Or at least put a proposal out there. Speculation ranges from a $500 tax credit -- possibly starting with a $250 down payment on that credit - to perhaps the income tax cut he spoke about on the campaign trail (remember the nurse commercial?). And he's even talking about tax cuts for certain businesses to spur job creation.
Understandably, he's waiting for the opportune time to release the specifics of his plan.
But a President Obama - with the rest of his party following suit - must drive their promised tax cuts consistently through the federal budget and their policy initiatives. You're already hearing talk from congressional Democrats in Washington about raising or imposing taxes on everyday items such as gas, cars, groceries, health care, pharmaceuticals, household appliances and even something called "flushables" (a nice spin word for those products you use every day like toothpaste, mouthwash, toilet paper, hair products, deodorant, shampoo.) All tax hikes to pay for lawmakers’ pet projects or issues; in other words more government spending.
This is a potentially dangerous trap that a President Obama will need to navigate in order to deliver on his promises and make his tax cuts meaningful.
After all, it makes no sense to give people a modest $500 tax credit, only to raise taxes by thousands of dollars on their everyday products and needs.
That’s not a tax cut. That’s a tax hike. One that will hit hard-working families struggling through a recession. And that won’t fly.