Obama's tax cut

last updated 8 January 2015

What happened

President-elect Barack Obama plans to include $300 billion in tax cuts in an economic stimulus package that could reach $775 billion over two years. The tax breaks are aimed at attracting Republican support needed to win quick congressional approval. (The Wall Street Journal)

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The best way to ensure that this doesn’t turn into “a federal boondoggle bonanza,” said Harvard economics professor Edward L. Glaeser in The Boston Globe, is to divvy up the stimulus between private citizens and local governments. Low- and middle-income taxpayers badly need a payroll-tax break, and shoring up local government balance sheets will “help ensure that those governments don’t make the downturn worse by cutting spending during a recession.”

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