Phony Obama Tax Rhetoric

I've been on vacation and quite rightly let my brain turn to mush by consuming almost no news and attending entirely to the needs and diversion of 2 six year olds, 2 four year olds, and an eighteen month old. Thus it is that I don't understand why anyone thinks Obama's softening of his tax policy is a hopeful sign. Obama's economic team now says he's only going to raise the dividend and capital gain tax rate on people earning over $200k or $250k per year. Really? The current 15% tax rate on dividends and capital gains expires at the end of this year unless the Great Sausage Factory takes action to extend it. So, one month before Obama takes office, if he takes office, tax rates on investors will be raised automatically. That means that a newly installed President Obama has to actively draft and send to the Pelosi/Reid Sausage Factory a tax cut (back to 15%) for investors, albeit not all investors. Um, does anybody in their right mind think that a) Obama will get right on this, b) it has even the remotest chance of passage in Nancy Reid's Congress? I doubt such a proposal will ever see the light of day, but if it does, an Obama administration will offer up a world-beating "Aw shucks. Our bill didn't pass. Darn. Next."

Supply-siders like Kudlow are being snowed. This is a costless piece of moderating rhetoric. Obama can't and will never have to deliver on it.