Tax Increases On Any Will Hurt Us All

US Treasury Secretary and tax cheat Timothy Geithner demonstrated once again why he is unqualified for his job... a lack of economics knowledge.
http://www.nytimes.com/2010/07/26/us/politics/26geithner.html?_r=1&ref=todayspaper

In appearances on two television programs, Mr. Geithner said that letting tax cuts expire for those who make $250,000 a year or more would affect 2 percent to 3 percent of all Americans. He dismissed concerns that the move could push a teetering economy back into recession and argued that it would demonstrate America’s commitment to addressing its trillion-dollar budget deficit.

On “This Week” on ABC, he said, “We think that’s the responsible thing to do because we need to make sure we can show the world” that America is “willing as a country now to start to make some progress bringing down our long-term deficits.”

Mr. Geithner added, “I do not believe it will affect growth.”

Unfortunately, his mistaken beliefs aren't going to override reality. And what will he do WHEN that happens and he is proven wrong? Apologize and work to remove the taxes? Or blame Bush yet again?


Anybody who follows economics should understand that taxes have a depressive effect on economic growth. Further, taxes on the "rich folk" WILL have an impact on the rest of us. How? I'll take you to Cato for a quick answer.
http://www.cato-at-liberty.org/2010/07/26/the-white-house-has-declared-class-war-on-the-rich-but-the-poor-and-middle-class-will-suffer-collateral-damage/

Unfortunately, the Obama Administration’s approach is to look at tax policy only through the prism of class warfare. This means that some tax cuts can be extended, but only if there is no direct benefit to anybody making more than $200,000 or $250,000 per year. The folks at the White House apparently don’t understand, however, that higher direct costs on the “rich” will translate into higher indirect costs on the rest of us. Higher tax rates on work, saving, investment, and entrepreneurship will slow economic growth. And, because of compounding, even small changes in the long-run growth rate can have a significant impact on living standards within one or two decades. This is one of the reasons why high-tax European welfare states have lost ground in recent decades compared to the United States.

When the economy slows down, that’s not good news for upper-income taxpayers. But it’s also bad news for the rest of us — and it can create genuine hardship for those on the lower rungs of the economic ladder. The White House may be playing smart politics. As this blurb from the Washington Post indicates, the President seems to think that he can get away with blaming the recession on tax cuts that took place five years before the downturn began. But for those of us who care about prosperity more than politics, what really matters is that the economy is soon going to be hit with higher tax rates on productive behavior. It’s unclear whether that’s good for the President’s poll numbers, but it’s definitely bad for America.

In other words, tax increases WILL harm the economy, no matter WHAT Timmy Geithner says.

Of course, I don't have much respect for Geithner. He recently argued that our economic problems were caused in part by US citizens practicing irresponsible deficit spending and spending far more money than they had, AND that the Obama administration had stopped this from becoming a depression by... irresponsible deficit spending and spending far more money than they have!

Pick one, Timmy.