Monday, July 11, 2011


Ezra Klein writes a mostly astute post about the debt-ceiling talks -- noting, for instance, that only John Boehner among the leading Republicans (Cantor, Kyl, and McConnell being the others) even seemed to want a deal, so it's no surprise that it wasn't deemed acceptable, and noting also that Republicans care only about spending and taxes, not about the deficit, which is why they rejected genuine deficit-cutting.

But then Ezra ends on this truly naive note:

Republicans might come to regret rejecting Boehner's deal. Few noticed that his framework for new revenues was comprehensive tax reform -- which would preempt the expiration of the Bush tax cuts. In other words, he was finishing the tax debate during the debt-ceiling debate, when Republicans have most of the leverage, rather than letting it drift linger into 2012, when the Bush tax cuts are set to expire and Democrats will have most of the leverage.

Excuse me, but that's crazy. The Democrats had massive amounts of leverage in the fall of 2010 -- i.e., big congressional majorities -- and they had a desperate need to frame the upcoming midterm elections in a way that favored them rather than Republicans, and they still didn't have the guts to put Republicans on record by holding a vote to end the Bush tax cuts on the wealthy. Not only that, they left so much unfinished business for the lame-duck session -- again, not having the guts to vote on it before the election -- that their only hope of getting any of it passed was to agree to a renewal of all the Bush tax cuts. They couldn't figure out a way to decouple the taxes on the wealthy from the others, so they couldn't end some of them, and they didn't dare let all of them end. What the hell makes anyone think they'll suddenly grow more daring between now and 2012?

Ezra goes on:

If Republicans could've agreed with Democrats this year, taxes would have gone up by $1 trillion. If they can't agree with Democrats next year, they'll go up by $4 trillion. And Republicans had a better hand this year than they will next year. I expect they'll come to wish they'd played it.

That $4 trillion figure is what you get if you let all the Bush tax cuts expire, including the ones for the middle class. I realize that in Wonkistan, where Ezra dwells, it's generally believed that this could just happen, as the result of a stalemate. Well, sorry, but no: This will not just happen. It certainly won't just happen on the watch of a Democratic president seeking reelection. Republicans will do what Democrats have failed to do in the debt-ceiling debate: they'll force a widespread consensus that the Apocalypse will arrive if they don't get their way, and "their way" will be a clean renewal of all of the Bush tax cuts; they'll persuade many Blue Dogs, many scared incumbents facing reelection, and enough of the public to (as usual) get what they want.

What the residents of Wonkistan never seem to understand is that Republicans have been very effective at figuring out ways to frame complete expiration as a willfully perverse effort to punish Mr. and Mrs. Heartland America with a horrifyingly massive tax increase, and proponents of the move have, at best, barely adequate rhetoric that might serve to defend it.

So it will never happen. Get it through your heads, everyone: the Bush tax cuts are now effectively permanent -- at least until there's a thorough overhaul of the tax code, in which case the effective tax rate of the well-to-do under the Bush tax cuts will be the ceiling beyond which the taxes of that group will not be allowed to rise.

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