Especially in his recent State of the Union address, the President has taken to bragging of his record as a tax-cutter. If that seems incongruous, it’s because it is. For an examination of the specifics from the SOTU, see here, but yesterday we found out that a pet talking point of the Obama administration is being quietly retired. The Making Work Pay tax credit, which we were told last year would be permanent and the first stage of the middle class tax cut promised during the campaign, is in the budget for 2011, but then set to expire at the end of the year.
It seems the camera-ready tax break for middle class working families was intended as a fix for a Cap & Trade plan that was going to hit them hard with increased costs. And the administration’s number crunchers were willing to part with the $63 billion only on the assumption that they’d make it up in revenue from the massive new energy tax. But now, with the fate of health care reform, the administration’s top priority, anything but certain, it’s hard to hold out hope for Cap & trade.
On the surface, I’d say this is a nice sign that Obama doesn’t expect to be able to get a Cap & Trade bill passed, at least not this year, but on the other hand, this is still a tax hike and if Cap & Trade does pass, it will now lack an important counterbalancing mechanism.
The best illustration, though, is one in contrasts and inconsistencies. The State of the Union brags of a record of tax cuts, then the budget proposal quietly retires them. The President insists that the deficit is a problem he’ll focus on immediately and not leave to future generations, then he presides over record deficits, which will of course only grow when the stimulus-esque “jobs bill” is worked out and pushed through. And “as recently as Friday” he praised the virtues of the very “Making Work Pay” credit he intended to couple with a huge new tax and is now proposing to ax.