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Obama-GOP Tax Deal Doesn't Aid Certainty, Deficit Battle

Dec 7, 2010

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Didn't Republican advocates for extending the Bush tax cuts to the highest end of the income scale say that was vital in order to chase away the clouds of uncertainty keeping business owners from making the kind of investment and hiring decisions that would help the economy?

And isn't nearly everyone in Washington saying the nation's deficits and debt are cancers threatening to make the U.S. a second-rate nation, if it's lucky?

So the question Edmund Andrews and Jim Tankersley at the National Journal have is what just happened? Isn't the agreement between President Obama and congressional Republicans exactly 180-degrees of what you would do if you wanted to tackle deficits and create certainty?

An excerpt:

First, the deal would add as much as $900 billion to the federal debt over the next two years, which is more than the cost of Obama's much-criticized stimulus program.

Second, the tax code will be even more riddled than before with special tax breaks, which have already made the system hideously complicated and created a deep public suspicion that the entire tax code is unfair.

Third, the deal worsens one of the tax code's biggest underlying problems: almost every major part of it, from rates to breaks, is literally temporary.

Those who place high importance on being able to plan ahead—corporations planning billion-dollar capital investments or individuals deciding how much of their income to save or spend—still don't know what to expect two years down the road.

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