Bush’s tax cuts will, indeed, expire in 2010 according to David Axelrod.  On NBC’s Meet The Depressed yesterday, President-elect Obama’s senior advisor, David Axelrod, made clear that Obama’s “tax cuts” will go forward despite the economic downturn.  This “tax cut,” as we all know, isn’t really a tax cut at all.  Instead, it involves repealing President Bush’s tax cuts for the “wealthy” and turning around and giving government checks ranging from $500 to $1,000 to individuals who make less than $250,000.  It’s an understatement to say that such a plan is a recipe for economic disaster.  But that’s not the point I’m making here.

Embedded in Axelrod’s interview with David Gregory was a statement and a message that received little attention not only yesterday and today but throughout the 2008 Presidential campaign.

When asked by Gregory whether Obama would raise taxes on ”wealthy” Americans by repealing or reversing Bush’s tax cuts, Axelrod stated clearly that Bush’s plan is “something that we plainly can’t afford moving forward.” 

“Whether it expires or whether we repeal it a little bit early, we’ll determine later, but it’s going to go . . . . It has to go.”

These comments make it fundamentally clear that an Obama administration will either repeal or allow to expire all of Bush’s tax cuts.    

This was a very significant statement because such a plan would nullify Obama’s promised “tax cuts.”  Any short-term benefit middle-class Americans would receive from one-time government checks in 2009 would be wiped out by the expiration of Bush’s tax cuts in 2010.  By allowing the Bush tax cuts to expire, Obama will effectively raise taxes on all Americans.   

Specifically, the expiration of Bush’s tax cuts would do the following:

-Tax rates will rise substantially in each tax bracket;

-The 10% tax bracket will disappear for low-income taxpayers, who will then have to pay taxes at the 15% rate;

-The marriage penalty will return for married couples;

-Taxpayers with children will lose HALF of their child tax credits;

-Taxes on dividends will increase (as early as January 1, 2009);

-Taxes on capital gains will increase (as early as January 1, 2009); and

-The death tax will return in 2011.

These immediate effects are the just beginning.  Other long-term, business-related benefits of the Bush tax cuts will fail to reach fruition as well.  In general, millions of working families (who are already facing difficult circumstances as the economy contracts) will suffer further as more jobs disappear and economic uncertainty increases.

It is reprehensible that this issue was hardly raised during the campaign (outside the efforts of Rush Limbaugh, Sean Hannity, and conservative talk radio).  And John McCain should be driven out of the Republican Party for failing to raise this issue at all!

The Bush tax cuts helped the U.S. economy thrive and prosper this past decade, and many more of their benefits have yet to be realized.  Obama doesn’t even have to sign a bill to wipe away all of that growth.  He merely has to sit back and allow those tax cuts to expire.  There is no question that, armed with this knowledge (and a clear explanation of the true nature of Obama’s “tax cuts”), Americans would have voted differently last month.

With that throwaway statement during his interview with David Gregory, Axelrod provided a small window into Obama’s administration.  Make no mistake, Obama will undo Bush’s tax cuts or allow them to expire altogether.

Hold on to your wallets. 

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