Answer: When a tax resumes its original level as required by law.
The Bush tax cuts enacted in 2001 and 2003 were to expire by the terms of the law that enacted them at the end of 2010. You'll recall last December the confrontation that occurred in Congress and between the Congress and the White House over a temporary extension of those cuts for two years based on an argument that a tax "increase," that is to say permitting the tax rates to assume their levels prior to the cuts, should not take place during a delicate and tenuous economic recovery.
Based on this argument, the Bush tax cuts were permitted to continue for two more years, presumably to help stimulate that recovery.
But, since Barack Obama replaced George W. Bush, those who favored the original cuts and didn't seem concerned with the deficits they produced, even during multiple wars, now are desperately concerned with deficits and "big government." Even such a conservative icon as Vice President Cheney was heard to say, during the astounding rise in deficits on his watch: "Deficits don't matter."
In Washington-speak what this means is: Republican deficits don't matter: Democratic deficits matter a lot.
So now President Obama and many others propose to permit the original, pre-Bush tax rates to assume their original levels for the rich as a means of requiring the wealthiest two percent of our society to pay a share recognized as fair since the introduction of graduated taxes. And what response is given by those now so desperate to balance the budget (as never before)?: "Don't raise taxes."
Permitting a temporary tax cut to expire as the original law provided is not "raising taxes." It is just that: letting taxes on the very wealthy return to their pre-cut levels in the interest of bringing down deficits. The Bush tax cuts were but one more failed experiment in the flawed "supply side" theory of taxes. They have never paid for themselves in increased revenues. They have simply sped up the shift of wealth upward.
And don't buy the argument that the richest Americans need tax relief so that they will invest in economic growth. Nonsense. The banks, corporations, and wealthiest Americans are hoarding massive amounts of cash and simply refusing to invest it... presumably until they are assured of maximum returns. Giving them even more money will not guarantee a change in behavior.
Please visit Senator Hart's blog at Matters of Principle.
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