While the 240 rabbis who signed a letter in support of President Barack Obama’s proposal to allow tax cuts to expire at the end of the year for those making over $250,000 annually are likely well intentioned, I wonder if they have fully considered the broader implications of this policy (“Community Breaks Silence On Bush-Era Tax Cuts,” Dec. 7).
Firstly, this proposal accomplishes next to nothing in deficit reduction. The full rate hike on the “rich” would have reduced the president’s bloated 2012 deficit from $1.1 trillion to $1.02 trillion. Sounds more like a rounding error than a legitimate strategy to reduce our mammoth deficit.
Perhaps most importantly, this proposal would inflict a damaging blow on our weak economy and tepid recovery. The president would like marginal tax rates to climb from 34 percent to 40.9 percent, tax rate dividends to soar from 15 percent to 44.7 percent and top tax rates on capital gains to rise from 15 percent to 24.7 percent. A recent study by Ernst and Young estimated that implementing this proposal would result in a net loss of over 700,000 jobs, that wages would fall 1.8 percent, and investment in new businesses would decline 2.4 percent. Of course some of the people who would suffer the most by these body blows to the economy are low skilled and low-wage workers — some of the folks I assume the rabbis would like to help.
If this is what Bend the Arc considers “stepping up,” perhaps they should consider stepping down.