The Wall Street Journal of April 17, 2012 describes the political posturing that is occurring in Washington surround taxation. Taxes, one of the most fundamentally polarizing issues in American politics, are often used as means to garner support from one’s political base. Democrats, on one side, attempted to push through the so called “Buffet Rule”, which would place a minimum tax of 30% on anyone making $1 Million or more. On the other hand, Republicans are expected to counter with a “Small Business Tax Cut” which would give a tax break to businesses from 35% to as low as 28%.
All of this political maneuvering has created a dangerous dichotomy in American politics. The language of 1% vs 99%, Main Street vs. Wall Street, and rich vs. poor are all effective political jargon, but not effective fiscal policy. The economy will operate most effectively and be more privy to investment in a scenario which long-term solutions, not one year “bridges to reform”, are discussed and implemented. However, in order for this to occur, congress will have to put aside election politics and extreme ideology in order to achieve a sustainable tax policy that offers concessions to both sides. Democrats will likely have to give breaks to small business, while also being open to discussions about cutting spending in some areas. On the other hand, Republicans need to be more open to taxing the richest 1% of America. Until compromise is reached, the economy will suffer.