Bush Tac Cuts: Cutting Through the Noise

With the Bush tax cuts expiring, everyone is on edge about what decisions are going to be made. Obama, the House, and Senate leaders are scheduled to formally meet to discuss this issue on November 30. Currently, the only thing we are positively aware of is that both parties want to extend the tax cuts for the lower and middle classes. If taxes are raised, many are worried that spending and investment will decline tremendously and right now spending and investment are exactly what we need to stimulate the economy. While extending the tax cuts will increase U.S. debt, the question is whether the long term debt or the immediate stimulation necessary to the economy takes precedence. On the contrary, people are pushed to save right now with the recession just coming to an end and the argument is that the people who have an income of over $200,000 will just save the amount gained from the tax cuts.