House Speaker Nancy Pelosi (D-Calif.) is urging the incoming Obama administration to stick to its campaign pledge and immediately increase taxes on the wealthiest Americans, a position that President-elect Barack Obama has wavered on since winning election.
Pelosi told reporters today that she “couldn’t be more clear” in opposing some Obama advisers’ wish to wait for the tax cuts on the highest income earners to expire in two years, as they are set to do under current law. “Put me down as clearly as you possibly can as one who wants to have those tax cuts for the wealthiest in America repealed,” she said.
I suppose there are a few crackpot economists who agree with the Speaker, but the vast majority of economist concur that any tax hike in a fragile economy is very bad medicine indeed. Nancy Pelosi’s demand for a punitive assault on the highest income earners may just be posturing for the benefit of the hard-left that supplies her troops with energy and money, but there’s a very good chance she really doesn’t understand this very basic truth about the business cycle: It takes business to employ people. Tax people at higher rates and fewer people will be employed.
The president-elect has a rare opportunity to extend the Democratic Party’s deep reach into the center and even the center-right. This opportunity worries Republicans –a lot.
But the Speaker and the Senate Majority Leader seemed poised to insist on imposing the ideological purity of the hard left leadership on the new Administration. Bad for the economy, good for the GOP’s rapid recovery.