Recessionomics

Krugman: Kill All the Tax Cuts

In 2001, former President George W. Bush enacted an “irresponsible tax cut, largely for the benefit of the wealthiest Americans,” writes economist Paul Krugman in a New York Times op-ed today. Now that the temporary tax cut is set to expire at year’s end, Democrats wish to let the tax cuts for the wealthy expire, but extend them for the middle class, while Republicans wish to extend all the tax cuts, and see themselves as “successful blackmailers” thanks to their filibustering tactics. “The answer is that they should just say no,” writes Krugman. If America makes the tax cuts permanent, according to Krugman, there would be an estimated $4 trillion in lost revenue over the next decade, resulting in “a fiscal crisis” that “could be resolved only by making savage cuts in federal spending.” However, if the tax cuts expire, we’d only miss lowering the unemployment rate by between 0.1 and 0.3 percentage points next year, according to a report released by the Congressional Budget Office.