Irresponsible Tax Cuts

An editorial today in the NY Times makes a convincing point about why further cutting the dividends and capital gains taxes. The Times writes:

The extension is both unaffordable and gratuitous. Most of the benefits would flow to taxpayers who make more than $1 million a year. That's morally reprehensible at a time when the House and the Senate are moving toward an agreement to cut as much as $45 billion over five years from domestic programs like Medicaid, food stamps, student loans and child-support enforcement. And it comes at a time when the government is already borrowing extensively for all manner of undertakings, like the war in Iraq and the new prescription drug benefit for Medicare.

The editorial also endorses tax cuts that shield middle class families from being subject to the Alternative Minimum Tax, a tax intended to make sure the super-wealthy paid taxes, but for which income limits were not indexed to inflation. However, while it is necessary to trim the AMT so it does not tax an ever-larger portion of the population, there should have been more work done to do more than a one-year fix. However, this would not have been politically palatable because it could have led discussion on to how AMT relief should be paid for, which could have led to discussions on trimming Bush's tax cuts. This was unacceptable for the Republicans, so they instead just patched the AMT for another year.