Stimulus: Spending Good, Tax Breaks Useless?

As the billions spin upward (or downward, if we remember this is all deficit spending) on the stimulus package moving through the Senate, the Republicans are complaining that there's too much government spending and not enough tax breaks. But what good do tax breaks do if you're not paying taxes?

Executives who attended the [Thursday] meeting [of CEOs with President Obama] said they were heartened by the President's interest in their concerns; each had roughly five minutes to talk about the economy and raise critical issues as the President moved around the room and probed them with questions. "We had an opportunity to let him know the key issues on our minds," says John Bryson, the recently retired CEO of power company Edison International (EIX). "There was a great sense of urgency, a feeling that we can't let the perfect be the enemy of the good in getting the measure passed."

The extended discussion also helped ease concerns some in the business community have had about the size and makeup of the package.

One issue that arose, says Bryson: worries that tax breaks in the bill as it was taking shape in Congress would do too little for businesses racking up losses and individuals with declining or no income. "So many people and businesses now can't use tax incentives because they have no taxable income," he said [Theo Francis and Jane Sasseen, "Stimulus: Now the Real Action Begins," BusinessWeek.com, 2009.01.29].

Sounds like tax breaks right now might go only to the lucky few at the top still turning a profit... and then we're right back to the trickle-down economics that didn't stave this mess off during the Bush administration.