Devildawg15's blog: "How to hurt the economy"

America remains in recession, and Washington politicians keep talking
about ways big government can fix the problem. But their solutions
would just dig the economy into a deeper hole.

For example, liberals in Congress have outlined a 2010 budget plan
that contains major tax hikes and other changes that would "hurt the
economy in good times but will devastate it in its current weakened
state," explains senior tax policy analyst Curtis Dubay.


*  Hiking Taxes. Under the liberals' budget plan, the government
would raise taxes to Clinton-era levels on high-income
individuals, including many entrepreneurs and investors who are
key to recovery. Instead of raising tax rates, Congress should
keep them at current levels and allow taxpayers to invest their
money and help grow the economy.

*  Failing to Kill the AMT. Congress is considering a
three-year extension of the Alternative Minimum Tax patch, which
keeps millions of middle-income Americans from facing a big tax
increase. But the patch's temporary nature breeds uncertainty. A
better policy would be to extend this patch permanently and pave
the way for the AMT's eventual repeal.

*  Preserving the Death Tax. Liberals in Congress want to keep the
death tax intact at its 2009 level. But Dubay notes that "the
death tax is a drag on productivity because it discourages
saving and investing and undermines job creation and wage
growth." Instead, Congress should repeal the death tax.

"The most effective way to spur economic recovery is to increase
incentives that drive economic recovery," Dubay argues. "To do so,
Congress should abandon the policies in the budget resolution and
reduce tax rates on work, saving, investment, risk taking, and
entrepreneurial activity."

Other efforts to "stimulate" the economy through tax-and-spend
policies aren't working either. Not only is the bill premised on the
dubious notion that government spending can boost the economy,
Heritage's Patrick Tyrrell explains that the "stimulus" bill isn't
working out as the Left advertised. Most egregiously, much of the
spending is slated for 2010 -- after many economists, including
Federal Reserve Chairman Ben Bernanke, expect the recession to end.


If the economy does turn around, Tyrrell proposes that Congress budget the unspent "stimulus" money for across-the-board tax cuts, which could allow the economy to grow stronger still.