Barack Obama's Tax Proposal: Politically Stimulating

The Economist syas Barack Obama's tax proposal: Politically stimulating.

"That's sorta how I feel about Barack Obama's proposal to extend the Bush tax cuts for one year on family income under $250,000. The plan would benefit all families, by the way, not just those making under $250,000. Families making $1m or $5m or $500m keep the tax cut too on their first $250,000. But you get a sense of the president's political motivations in the way he himself frames the proposal: 'I’m calling on Congress to extend the tax cuts for the 98% of Americans who make less than $250,000 for another year.' As Dan Amira points out,

'Normally, a president would want to publicize that he's trying to cut taxes for everyone in the country. But Obama actually has an incentive this time to downplay the number of Americans who would benefit from his tax plan. His proposal is, at its heart, a political maneuver meant to force Mitt Romney to defend tax cuts for the wealthy. It's more effective, then, for it to be seen as a cut solely for the middle class. The reality is that Obama's proposal would also keep Warren Buffett's taxes lower, if only a little bit.'"

It goes on to suggest one idea to separate politics from needed economic policy, change the expiration of the tax cuts from a fixed date to an economic metric like unemployment under 7%.