We should not forget that the “fiscal cliff” currently causing such frenzy is basically the expiration of the Bush-era temporary tax cuts, the Cheshire-cat grin of fiscal policy of one of America’s worst presidents. The end of these tax breaks would not lead to draconian tax rates. They would lead to the tax rates that America lived with and prospered with in the 1990s.
And what if worse comes to worse, and we go over the fiscal cliff? Taxes would rise on all brackets, not just the top. Disaster? No. We’d actually start funding government again.
So why do we say that we are at a so-called “cliff”? Because preserving the Bush-era tax cuts for the lower 98 percent of families was the Faustian bargain that Obama made with populism in order to be elected in 2008 and re-elected in 2012. He would not have won the election in 2008 without promising to keep taxes low for the middle class. He would not have won re-election this month without making the same promise. He and his political advisers were right.
Read full article at Politico
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