There are those on the right who oppose Republicans cutting a deal to avert the “fiscal cliff,” because they are convinced that the GOP would be in a better bargaining position if America went over it. But a lot of conservatives would still oppose a deal, even if it means the outcome could be worse in the new year. According to this strain of thinking, Republicans made a commitment to voters not to raise taxes, they defined a tax increase as any legislation that did not extend all current tax rates, and they don’t want to break this pledge under any circumstances. It’s this thought process that drove a critical mass of conservative members of the House of Representatives –many fearing potential primary challenges – to reject Speaker John Boehner’s “Plan B” approach, which would have protected all income below $1 million from a tax increase. Their problem was that it allowed taxes to go up for income beyond that.
As the nation enters the new year, conservatives are grappling with some uncomfortable realities. President Obama was reelected and Democrats maintained control of the Senate, and they’re determined for taxes to go up on higher-income earners. Obama and his Democratic allies are aided further by the quirk in the Bush era tax cuts that made them only temporary. If no deal is struck, it would mean a $4.5 trillion tax hike for all Americans, which compares to the $300 billion to $400 billion in higher taxes for less than one percent of Americans under Boehner’s “Plan B.” But here’s the rub. If Republicans voted for “Plan B” on Thursday, many conservative activists would have attacked them for agreeing to raise taxes. But after January 1st, once taxes go up, Republicans could strike a deal with Obama that would raise revenue by double or triple the amount of “Plan B,” and it wouldn’t be seen as breaking their promise. In other words, this whole debate is being driven not by whether conservatives could get a better deal before or after the new year, but by the technicality that the same piece of legislation that would be construed as a tax hike on Dec. 31 would be considered a tax cut on January 1.
This is short-sighted. Conservatives should be dictated not by such technicalities, but by trying to keep taxes as low as possible for as many people as possible under difficult circumstances. To start with the most obvious reason, conservatives want Americans to keep more of their earnings, rather than giving more money to government. From a longer-term policy perspective, they should want the Congressional Budget Office’s baseline revenue projections to come out of this fight as low as possible, so future tax reform can be based around a lower revenue target.
I had a friendly exchange with Hugh Hewitt about this on Twitter last night, and when I made the point that policy outcomes – specifically, limiting the dollar value of tax increases – should be more important than the technicality of when a vote is held, he replied, “Have to disagree. The key is honoring your campaign commitments on taxes, spending and especially Defense.” (For a longer version of his argument, check out his column on the matter.)
I’m all for honoring campaign commitments, but it’s also important to consider the principles behind those commitments. And the entire point of having pledges not to raise taxes in the first place is to keep the tax burden on Americans as low as possible. That principle should trump any technicality.