Mitt Romney’s top economic adviser continued his post-election about-face on Monday, pushing for raising more tax revenue from the rich as a way to start paying down the federal deficit.So is this The Great Republican Capitulation? Nope, because there's a caveat—the same caveat that both John Boehner and Mitch McConnell have attached to their stated willingness to raise tax revenue:
“Obviously, we would be better in my view if we didn’t raise taxes on anyone and we did everything on the spending side,” Glenn Hubbard, the dean of Columbia’s business school, said on MSNBC’s “Morning Joe.” “We just had an election. We’re going to have to have some compromise. And I think step one is figure out how to raise some revenue without killing the economy.”
Hubbard said revenue should only come in the form of eliminating deductions, not by increasing tax rates, as President Barack Obama has suggested.In other words, as David Dayen noted last week, Hubbard and others like him aren't actually calling for higher taxes—in fact, they are calling for keeping the Bush tax cuts in place. Yes, they are adding lots of fluff about being interested in raising revenue through tax reform, but when guys whose entire economic ideology is built around the concept that cutting taxes creates economic growth start talking about higher tax revenue, your bullshit detector should start flashing.
The reason that these guys are trying to sound reasonable is that they hope they can convince Democrats to extend all Bush tax cuts—including for income over $250,000—in exchange for a promise to include additional revenue in tax reform. If Democrats made the mistake of believing them, these Republicans would certainly renege on their offer as soon as the Bush tax cuts got extended.
The fact that this is their strategy isn't a big secret. As conservative pundit Byron York put it last week, conservatives are "pretty nervous" about taxes. They oppose tax hikes but don't want to "find themselves in the position of defending tax cuts for the highest income brackets."
Republicans are in a weak position on taxes and they know it—the last thing they want to do after losing the election is to choose between holding middle-class taxes hostage and accepting a rate hike on the top 2 percent. And the reason that they are trying to sound reasonable on taxes without actually agreeing to increase them is that their only shot of avoiding that choice is to somehow convince Democrats that they've finally seen the light and will accept additional tax revenue as part of tax reform. But given that the GOP's biggest condition is that Democrats extend the Bush tax cuts on the wealthy, only a fool wouldn't be able to see through the Republican's latest gambit.