The President deserves credit for signing on to extending the lower tax rates for all. The only mistake is Washington needs to follow the Bowles-Simpson plan more closely re: widening the base and lowering the rates, and then making them permanent. That conversation should not die. But the President has helped himself greatly. Not only is he running toward the center which is where this country has to be governed (well, maybe lean a little right of center), this is one of the best things he could have done to help grow the economy and start lowering the unemployment rate. This is his best re-election move to date. I find it very unlikely he will be re-elected with an unemployment rate above 9%. And remember, Iowa, Hawkeye-Cauceye, where we start counting votes for the nomination is upon us in 13 months.
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Certainly widening the base and lowering rates is a very attractive option. Here's one area where I would actually be for tax increases. My knowledge of this is limited, but it seems to me that with very low tax rates on capital gains, we have disproportionately encouraged stock market investing. Then, when the stock markets go through a correction (insert argument here whether or not this is a government-inspired bubble), politicians panic and rush to *fix* it. The stock markets are invaluable to our economy. But perhaps our dollars would be more evenly spread with more even tax rates.
Some have argued that regulations such as Sarbanes-Oxley encourage only larger businesses to enter the broader stock market. With more even tax rates, investment dollars may find their way more easily into smaller businesses that are robust and innovative, something that seems a dying breed today.
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