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President’s tax compromise somewhat promising

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Elections matter, and that is as it should be — otherwisem kiss democracy goodbye. Here is what the 2010 anti-President Barack Obama uprising already means: compromise, as in this admonished president saying he will agree to keep income taxes down for high-income Americans if Republicans will do him some favors too.

Delighted, they have said yes, they will extend unemployment benefits without demanding budget cuts elsewhere to pay for them. And if the left is angry because Peter is not being sufficiently robbed to pay Paul still more, conservatives should be happy, right? Well, kind of.

It is good that Obama has shown he can give a little, for otherwise we could look forward to a stalemate. A government that does very little is better than the rampaging, vandalistic one we have had the past two years, but there are some real issues that need addressing.

It is good for the economy that we will now likely have two more years of President George W. Bush’s tax cuts not just for the middle-income Americans, but also for couples making $250,000 or more. Hit the thick-wallet crowd hard and you also hit recovery.

Many of these people run businesses and they are going to be far more wary about expanding and hiring new employees if the government is reducing their current take. The top 5 percent in income already pay more taxes than everyone else put together, and close to half of all workers pay no income tax at all. Those worried about income inequality seldom note its cultural sources, overlooking that it went up more during President Bill Clinton’s raise-taxes years than under the Bush lower-taxes years.

It is good, too, that capital gains taxes are not going up under the Obama-GOP deal, for that discourages needed investment while producing less revenue. Also, Congress will not make a joke out of the concept of private property with a ridiculously high death tax. The one-year reduction in the Social Security payroll tax would stimulate some hiring, businesses are to receive some helpful breaks for investment and research, some families will have more to spend because of expanded tax credits, and the extended unemployment insurance should help thwart possible suffering, even if it encourages some to seek jobs with less fervor and success than they otherwise would.

All that being said, the cost of this concoction is put at an amazing, hold-your-breath $900 billion with no way to foot the bill but higher deficits on top of deficits already so high that some very serious experts are calculating just how long it will be before we are the next Ireland or Greece, which is to say a country whose chaotic present could easily become a more miserable future.

True, that cost estimate refers in large part to revenue we do not have now, not some additional burden, but also it is true that much in the plan — such as the extra months of unemployment insurance or a payroll tax cut that would do more good if it lasted longer — could be paid for through reductions in other places in the budget.

An impossible task? Hardly. Except for cowardice, self-serving, special-interest political considerations and statist ideologies blind to obvious facts, it would be easy as finger-snapping to locate every cent needed in a budget largely made up of grotesque miscalculations and mountainous, life-worsening waste.

Here is the pressing task when this lame-duck congressional session waddles into history and a voter-reconstituted, GOP-heavy House comes to power next year: a new compromise, this one on long-term deficit reduction that turns to the ideas of Obama’s deficit commission leaders, not as a precise blueprint but as a masterful guide for simplifying taxes and reducing rates, limiting the size of government, hacking away at what’s unnecessary and doing all this without beating up on the middle class, as some maintain.

I think the voters would then be very happy.

Columnist Jay Ambrose has been Washington editorial policy director for Scripps Howard newspapers and editor of dailies in El Paso and Denver. He can be reached at speaktojay@aol.com.