Friday, February 15, 2008

Sodrel on the "stimulus package"

With the debut of Mike Sodrel's attractive new website (hat tip: HoosierPundit), we find his "Statement on the Passage of the Economic Stimulus Package"...

First, I tried to predict Baron Hill's position on the stimulus-- and Mike's hypothetical response. I figured that Hill's desire to claim fiscal conservatism would trump his desire to pander. Wrong!

Then, I wrestled with Mike's response to Baron's support of the stimulus. On the one hand, as a supposed fiscal conservative-- and as someone who I'm told is knowledgeable about economics and skeptical of government-- he should oppose it. But it would be quite difficult politically to hold that position-- especially when Baron has already staked out the "tax-cut" position.

Alas, now we know...

Jan 30, 2008 — (Jeffersonville, IN) – Congressional Candidate Mike Sodrel released the following statement in response to the House passage of the Economic Stimulus Package:

"I commend Congress for passing much needed tax relief, but this is just a start.

-Much needed tax relief? For the macroeconomy? Probably not.

-Much needed tax relief for individuals? Sure, it's always nice to have more money in our pockets-- whether in relatively soft economic times or not.

-This is just a start? Yes, with the additional debt, in the end, we'll have to raise taxes in the future to pay for the start.

"The President's tax cuts are set to expire in two years. Should that occur, Americans will see a tax increase as rates return to pre-2001 levels.

Correct. But with the additional debt that Hill chose and Sodrel applauded, it will be that much more difficult to have tax cuts for the indefinite future. And the tax cut that would disappear is the only one of the three Bush tax cuts that lowered marginal tax rates-- the tax policy that encourages people to engage in productive behavior. Thanks to both of my opponents for supporting a grossly inferior tax cut!

"I urge Congress to make the President's tax cuts permanent and pass lasting tax reform.

Good luck with that!

Americans cannot make long term financial decisions based on short term tax policy.

Likewise American politicians should not make short-term tax policy decisions based on short-term political considerations, while ignoring short-run and long-run economic considerations.