This was an article above the fold on the WaPo website, front and center. It discusses the
rise in taxes reversion of taxes to previous rates in the event that Republicans and Democrats do not come to an agreement and hash out a deal before 2013. Taxes on income, gifts, estates and the Social Security payroll tax, to name a few, will “go up.”
A few points:
1) As my snarky strikethrough and quotations around “go up” indicate, taxes rates will not exactly be rising. More accurately, they’ll be reverting to their previous levels, as was intended by the sunset provisions in the Bush tax cuts (because that’s the only way they’d ever pass). These tax cuts contribute so much to the deficit that they could not be made permanent. So, the strategy was to make them a ten-year piece of legislation that would have to be renewed (as they were in ’03) and Republicans were not too worried about renewing them because the optics of raising taxes are so dangerous (as Republicans themselves are experiencing).
2) The WaPo editorial board’s hair has been on fire about the Deficit for the past few years (will look for a link collection later but if you read ’em, you know this to be true). Note how Lori Montgomery frames this dynamic:
But in December, deadlock will cut the other way. Republicans need Obama if they want to prevent one of the biggest tax increases in U.S. history — nearly $5 trillion over the next decade, by official estimates — and block deep cuts to the Pentagon that could be triggered as part of last summer’s debt-ceiling accord.
See point one again about this “increase.” But even more strikingly, look at that bolded section. How’s this for a re-write:
But in December, Democrats and Republicans have the opportunity to reduce the national debt by $5 trillion over the next decade and cut the deficit by $300 billion a year at the minimum. What they must do is simple: nothing.
Bit of a different tune, eh? A cynical person might conclude that the WaPo, so rough and ready to slash the deficit when curbing “entitlements” is the means to do so, is a mite less interested in raising revenues. Of course, people who understand arithmetic (and it’s not my specialty, although I try to play along) realize that adding revenue reduces the deficit just as much as cutting spending.
Of course, there are reasonable objections to letting all of the tax cuts expire, not least that the AMT patch expiration will hit a lot of working families, as will the rate mentioned by the article on the first $8,700 of wages. Also, taking money out of the economy is a bad thing to do during these times, so, as much as I don’t like the slant of those tax cuts, Obama’s plan to keep the rates for everyone making less than $250k a year might be the best option. I’d like to see an analysis by Krugman or Dean Baker or somebody in the know looking at the pros and cons of letting all the cuts expire.
Nevertheless, isn’t it interesting how the WaPo normally falls all over itself to preach fealty to the Deficit but never once mentions in the article that, for all the potential negative consequences, letting the entire Bush tax cuts expire is an enormous step towards bringing the Deficit under control? Note this closing line from a January 2011 piece in Media Matters:
The Post‘s framing plays along with the false conservative claims that only spending counts towards deficits, and only spending reductions should be considered to reduce them.