Super Congress is totally coming to save our economy
Democrats will be bringing their ace negotiating skills into the Super Congress to push for
tax increases on the wealthy and the closure of corporate tax loopholes. Republicans, of course, will have none of it. As much as I dislike agreeing with a tax lobbyist on anything, this guy looks to have it about right:
“The six Democrats will wail and gnash their teeth about the need to have tax increases, and the six Republicans will tell them it’s more likely that Elvis is going to show up here than we’ll agree to that,” said Kenneth Kies, a tax lobbyist at the Federal Policy Group in Washington whose clients include General Electric Co. (GE) and Caterpillar Inc. (CAT)
One of the counterarguments is that:
One potential difference is that under the debt-ceiling compromise, failure by the committee to act or to advance its proposal through Congress would trigger automatic cuts in programs that both parties favor, including defense spending.
“It really just becomes an issue of defense vs. high- income,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington research group that favors programs to assist low-income individuals.
Finding one Republican out of six to agree to tax increases—even increases in the form of closing obviously abusive loopholes—is...unlikely. If Democrats craft their proposal well and work hard to sell it to the public, Republican defenses of billionaire hedge fund managers and oil companies could become a cudgel to be used against them in 2012. But that doesn't actually increase revenues, which was desperately needed even prior to the debt deal.
The other claim for why those targeted tax increases might be possible is that things start off with the planned expiration of the Bush tax cuts as an already-high baseline. But as Jed Lewison wrote yesterday:
The problem, of course, is that we've heard this all before. In April, President Obama proposed using tax reform to raise revenue above and beyond the amount of revenue that would be raised by expiring the Bush high-income tax cuts. Now, the goalposts have been moved once again, and the Super Congress hasn't even been passed into law.
By the time it starts getting serious, you can bet your bottom dollar that the goalposts will move again: there'll be tax reform, and the CBO might even say it yields a modest bit of revenue thanks to dynamic scoring or some other budget math, but the real goal will be to take the Bush tax cuts off the table in the 2012 election and beyond. So yeah, the Bush tax cuts are here to stay, in substance if not in name.
Depressing doesn't begin to describe it.