Senate Republican staffers familiar with the fiscal cliff negotiation told me that the White House insisted on sticking Max Baucus’s raft of tax-break extenders — HR 3521 — into the fiscal cliff legislation.
My column listed who was lobbying for these tax breaks — the likes of General Electric, Goldman Sachs, Citigroup, the Motion Picture Association of America, and the Biotechnology Industry Organization of America. This tax-extenders package is clearly a gift to big business.
So, assuming the White House did stick this tax-break package — and my requests for White House comment, confirmation, or denial have met with silence – it clashes with Obama rhetoric on all sorts of fronts, including, as today’s excellent Wall Street Journal editorial points out, his calls for the wealthy paying their fair share and his professed desire “that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”
But beyond that, it undermines Obama’s professed desire to close the deficit.
Think about this: just the business and energy tax extenders reduce federal revenue by $67.7 billion in 2013. The tax hikes on the rich Obama won — higher rates on those over $400,000 and reduced deductions on those over $250,000 — raise $620 billion over a decade. As far as I know, we can safely guess that this would be less than $62 billion in 2013.
Unless I’m missing something, the special-interest tax breaks Obama demanded look to be bigger than the money he raised by taxing the rich. If he had just let all these special tax breaks expire — like wind tax credits, algae subsidies, and railroad track maintenance — it would have raised more revenue than his tax hikes on rich individuals and small businesses.