Second thoughts at times can bog down progress, but there are other times when they can be very helpful indeed. We have a case in point right now on Capitol Hill. On January 1, the tax cuts passed in 2001 and 2003 are slated to expire, the death tax will return, and capital gains taxes are going to increase, among other things. These all add up to a massive tax increase headed our way. This doesn’t just sound unpleasant; it is an economic warning. If unheeded, the resulting money grab by Washington threatens to starve job creation in the private sector.
The threat has progressed to where even the Democratic members of Congress, the chief advocates of more spending and higher taxes, have split into two camps.
Speaker Pelosi and Majority Leader Reid lead the faction that is looking forward to the coming tax hike, blocking all efforts to extend the cuts. Not much surprise. However, they’re being challenged by a smaller, growing faction: Democrats who, if only to stay in office past this year, are starting to think that maybe raising taxes during a recession isn’t such a hot idea after all.
A sign of how concerned, perhaps even alarmed, these Democrats are is the fact that one of them is Sen. Kent Conrad (D-ND), who chairs the Senate Budget Committee and, as the Wall Street Journal says, “has rarely seen a tax increase he didn’t like.” Then again, Conrad presents himself to his (very red) state as a conservative, and now Americans are watching their members of Congress more closely than ever. In the House of Representatives, Rep. Bobby Bright (D-AL) has joined the call to sanity: “I don’t care if it’s the wealthiest of the wealthy. You don’t raise their taxes… In a recession you don’t tax, burden and restrict.” Even a tax-and-spend stalwart as immovable as Rep. Jerrold Nadler (D-NY), who comes from a safely blue district in Manhattan, is “worrying publicly that the tax hike will hit his New York constituents too hard.”
Will John Hall join his fellow House Democrats having second thoughts about the wisdom of trying to tax our way out of a recession? Not likely. Constituent calls to his office asking him to give the tax cuts at least a temporary extension go unanswered. Small businesses pleading with him to ease their tax burden so they can hire and invest again meet with silence. It seems the only thing that will convince Mr. Hall how out of touch he is will be the Hudson Valley’s resounding expression of our own second thoughts about his remaining in office, when we vote him out on Election Day.