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Too Little, Too Late on Tax Cuts

Obama’s election-eve conversion (akin to a deathbed one) to the benefit of tax cuts seems to have come too little too late.

Business leaders were unimpressed:

Business executives said Tuesday that the measure might deliver a temporary lift to business spending. But several said a more enduring way to spur demand would be to extend the Bush administration income-tax cuts—which expire in January—for higher earners. Some also called for more permanent changes to corporate-tax rules.

It reminds some of cash for clunkers. (“Many executives … compared the speeded-up tax deduction to earlier Obama tax breaks for buyers of cars and houses. Those breaks stimulated a rush of buying that was followed by a big drop in sales once the incentives ended.”)

Nor is it clear there is support in Congress to pass the president’s proposal or time to do it. Congress returns next week and has three weeks before recessing to head for the campaign trail. I don’t think Democrats are going to be open to staying in Washington beyond that date, leaving the trail to their challengers.

The sure sign the plan is a dud? The White House is talking nonsense. Robert Gibbs says the stimulus plan is not a stimulus plan. Because it’s too small to make any difference, presumably. If this is giving you a headache, imagine how House Democrats feel.


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