It somehow seems misguided to rail on about the economic evil of a tax hike for people actually employed but to ignore the economic fallout of depriving those without a wage the essential minimum level of income until they can find employment.
Which brings me to the tax hike/freeze issue.
Republicans would be wise to work with the President and the Democrats in Congress to find a solution, even if that involves compromise. The other side has as much as indicated it is willing to delay any tax increases on incomes below $250,000.
Republicans want more, and they are right in that regard because raising taxes will undoubtedly impede economic growth. But Republicans could well end up doing more harm than good if they are not willing to engage in some compromise on this issue. They can make the politically astute move by negotiating a higher floor than $250,000 – more like $500,000, which would incorporate the vast majority of income earners in the country.
The optics matter here. It is difficult to argue that those making more than half a million dollars are not somehow in the middle class. If that is too unpalatable for Republicans, they could go one step further and raise the level to $1,000,000 before applying an incremental tax. That would benefit all but the tiniest percentage of earners.
Republicans have the opportunity to display true leadership, to engage in genuine compromise for the greater good. More than that, they have the obligation to achieve the economic results they decried their Democrat counterparts for failing to achieve. The burden is on their shoulders. They won the victory they sought and now I repeat, “Caveat victor”.
Patricia W. Chadwick has had more than 35 years of investment experience. She is the founder and president of Ravengate Partners LLC, a consulting firm that provides advice on financial markets and global economics.