House Republican leaders appear to have settled on a trick for trying to get around the Americans for Tax Reform Pledge they all signed: create a distinction between raising revenues through higher rates and raising revenues through closing loopholes. “There is a huge difference between increasing tax rates — which costs jobs — and increasing tax revenue through tax reform,” an aide to Speaker John Boehner, R-Ohio, told National Review.
But is there?
Closing loopholes and lowering rates has been the cornerstone of Republican tax policy for decades. It is good politics and policy. But with President Obama in the White House, that simply is not on the table. If Republicans vote to close loopholes now, without a corresponding reduction in top marginal rates, they are giving away the future game on tax reform. The revenue-raising items that should pay for tax rate reductions will be gone whenever Congress does get around to tax reform, and that makes serious reform more difficult. The Republican leadership is in the middle of giving away its leverage to reform the tax code.
Also, affirmatively voting for a plan that raises revenues by closing loopholes is arguably a more clear violation of The Pledge than voting for a bill that cuts taxes by $3.7 trillion over the next ten years while allowing the top two marginal rates to rise automatically. In the former case, a Republican is voting for higher taxes. In the latter, they are voting for a tax cut. Which would you rather defend in a Republican primary — or in a general election?
Taxes are going to go up and the Republicans in Congress should be looking to minimize the damage. The Republican leadership has not adequately explained to the base how sanctifying the Bush rates for the wealthiest Americans, at the expense of keeping their promises to voters, accomplishes this. And there may not be an adequate explanation to give.
From The Washington Examiner
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In Other News
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The Wall Street Journal, SEC Chief’s Exit Opens Void: Mary Schapiro, chairman of the Securities and Exchange Commission, announced her departure Monday, bringing to an end a turbulent period for the agency.
The New York Times, Japan Is Flexing Its Military Muscle to Counter a Rising China: After years of watching its international influence eroded by a slow-motion economic decline, the pacifist nation of Japan is trying to raise its profile in a new way, offering military aid for the first time in decades and displaying its own armed forces in an effort to build regional alliances and shore up other countries’ defenses to counter a rising China.
The Weekly Standard‘s Adam White notes that Warren Buffett has made investment decisions based on taxes.
Harvard professor Greg Mankiw details how Warren Buffett avoids taxes.
Charles Murray asks, “Why aren’t Asians Republicans?”
The New Republic‘s David Greenberg on The Myth of Second-Term Failure.
Rep. Sander Levin, D-Mich, tells The Washington Post that letting some unemployment benefits would be a ‘human cliff’.
Kevin Drum makes the case that Social Security Reform Would Be Good For Liberals.