It isn't just income tax rates, capital gains taxes were also on the line here.
I can tell you from experience over the past year that businesses and savvy investors DO look to future tax rates when considering their investment positions and business activities. An awful lot of folks, both individuals and businesses, have been doing what they can to take profits this year at the lower cap gains rates, rather than take any chances on paying higher taxes next year. I've seen it in the commercial real estate markets, where my eyes tend to be focused, but I'm sure others have see it in their fields, too.
Now, as it happened those cap gains taxes won't be going up until at least 2012. But we didn't know that until the end of this year, and a lot of these profit taking decisions have already been made and implemented. Ya can't wait until the last second for this stuff, so many had to expect the worst and act accordingly.
I'm amused that the libs and Dems are now admitting that raising tax rates can depress the economy. As Barack says, not extending the current lower rates could have caused a double dip. I guess we're all supply-siders now. But what Barry seems not to realize is that a lot of the potential damage to the economy has already been done, we're just waiting for it to take effect next year.
Shoulda dealt with this a year or two ago. Are we going to learn the lesson and deal with the 2012 tax decisions in a timely enough fashion, or are we going to wait until the last second again?
