New tax theory??
Andrew Coyne in MacLeans magazine has some suggestions for a new way to handle the 'Tax' question.
Too late this time but maybe next time.
Or in other words, the two sides agreed that, in exchange for taking in less revenue, they would spend more of it. The cost of the agreement: an estimated $900 billion over two years, “to be financed,” as the New York Times reported, “entirely by adding to the national debt.” Amazing what can be done by people of goodwill, provided you leave the people who will actually pay for it all out of the negotiations.
To be sure, the agreement is only for two years. Just as the Bush tax cuts are scheduled to expire on Jan. 1 if no legislation is passed to extend them, so the Obama extension would also carry an automatic expiry date—at least for the people he had previously targeted, the top two per cent of all tax filers. So the top rate of tax would remain at 35 per cent now, but would revert to the 40 per cent rate that prevailed under president Bill Clinton in two years’ time.
But this has things exactly backwards. Rather than freeze taxes where they are now, only to have to raise them later, far better to raise taxes now, and cut them later. That is, let the Bush tax cuts expire, but only for two years—putting an expiry date on the expiry, as it were. Let me explain.