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Presidential Economic Policies

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On radio I have often said that presidents get too much of the blame for a bad economy and often take too much credit for a good economy. These policies might not turn around an economy as large as ours, but they do have an impact on individual citizens. Here is the possible impact of some of the policy proposals put forth by the president in his recent state of the union speech.

The president would like to raise the capital gains tax rate to 28 percent. He may believe that this would increase governmental revenue. Most economists believe that investors would merely retain their assets rather than sell them.

The president talked about increasing the child tax credit. It sounded like the president was endorsing one of the pro-family ideas put forth by Senators Mike Lee and Marco Rubio. But that is not what the president had in mind. This child tax credit could only be used to cover child-care and transportation expenses. It might offer limited help to working mothers but would not benefit families with stay-at-home mothers. It is another example of the federal government trying to pick winners and losers in the tax code.

The president’s latest plan has been to give students “free” tuition to community college. The estimated cost supposedly would be $60 billion over a decade. It is likely that the real cost would be more. However, at the same time the president proposed removing the tax benefit of the 529 college saving accounts that many middle class families use to save for college expenses. This is an example of the federal government giving something for education with one hand and taking something away with the other hand.

Finally, the president also proposed mandatory paid sick leave for workers. We don’t have the guess what the impact that policy might have since there are states that already have implemented a less expansive policy in their states. This proposed benefit would likely reduce workers’ wages and other company perks.

There are social and economic consequences to the policies proposed by the president. None of them seem like a good idea.

Viewpoints by Kerby Anderson

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