Imagine what would have happened to the economy if Congress had extended the tax rates permanently instead of just for two years. Imagine what would have happened if the payroll tax holiday had been for a year for the employee and the employer, and for the full 12.4 percent Social Security portion.
Imagine if the Democrat-controlled Congress had lost its collective mind and actually reduced the top corporate tax rate from 35 percent to 25 percent. Imagine no taxes on repatriated profits that companies are going to just leave in other countries anyway to avoid double taxation. Imagine a capital gains tax rate of zero!
Imagine an economy so robust that everyone who wanted to work could find a job, and some people could even find a new career or start a business.
You can say I’m a dreamer, but that’s the way I am.
When former President Reagan signed sweeping tax cut legislation in the 1980s, total tax revenues increased by 99.4 percent. Even though the tax cuts were working, the Democrats continued to say they were not working and that “trickle-down economics” only benefited the rich. What a familiar tune even today!
This administration and previously Democrat-controlled Congress did just enough to trickle the economy in the closing days of the 111th Congress, instead of bold consumer-direct stimulus solutions. Extending the current tax rates for two years wasn’t even a tax cut, and the 2-percentage-point payroll tax holiday for employees will be barely noticeable in their paychecks. So a major boost to the economy is unlikely.
The administration and its media allies are now telling the American people to get used to systemic high unemployment, which is now a resounding 9.4 percent. Also, the administration has invented new terminology to create the perception that we are in an economic recovery – calling it a “jobless recovery.”
How stupid are we supposed to be?
When an economy is not producing any significant net new job growth, it is not a recovery. It’s treading water. This so-called jobless recovery is really reflective of huge productivity improvements made by American businesses over the last three years to survive ineffective economic policy.
I saw it firsthand at the three corporations where I serve as a director.
Most businesses have tightened their operations to the bone by upgrading their technology and maximizing how they deploy their human capital. But businesses can’t continue their productivity blitz indefinitely without cutting into the bone of their operations.
As a result, this economy is not expected to be much better nor much worse in the next two years. That’s not good news for the 15 million people who are unemployed, or for those that are getting discouraged and tempted to give up.
The administration and the Democrats have been focused on making government bigger, more bureaucratic and more intrusive in our lives, especially in the last two years. They did not listen to the American people. Worse yet, they believe their agenda is the right direction for the country.
Maybe the president and the Democrats will move toward the will of the people with a new Republican majority in the House during the 112th Congress. But based on their actions in the closing days of the 111th Congress, I can’t imagine that would happen.
So instead of having a thriving economy over the next two years, we will see a surviving economy that will continue to trickle along.
I can’t imagine it doing any better than that.