No, John Boehner Has Not Offered a Compromise on Taxes

Share With Friends
  

Unless you think Mitt Romney’s tax plan is a compromise, because that is what Boehner is offering.

Many reporters seem confused about what is being offered here. The Republican Party thinks that tax cuts create new net revenue. As in, more revenue than we lose from the tax cuts. Think about that again. Lower tax rates = more revenue than current tax rates.

This position is crazy. There is no basis for believing it. And yet every single member of the Republican Party will cop to believing it. It’s an article of religious faith in the party.

Pat Garofalo reminds us that not even Republican economists believe this fairy tale:

Many studies have shown “that tax cuts do not come anywhere close to paying for themselves over the long term.” Greg Mankiw, chair of George W. Bush’s Council of Economic Advisers, called those who believe that tax cuts will result in a revenue increase “charlatans and cranks.” “There is no serious research evidence to suggest that” tax cuts pay for themselves, Republican economist Douglas Holtz-Eakin agreed. But Republican leaders still claim that such a thing will happen, all evidence to the contrary.

It’s already clear that House Republicans are not going to give any ground on taxes, just days after their party’s tax agenda was rejected by the voters. Instead of entertaining sham negotiations with the Republicans in the lame duck, President Obama needs to let the Bush tax cuts expire in January and then start a fresh negotiation on how to bring the tax rates down. Democrats have all the leverage here. There’s no reason to accept a bad deal before the tax rates reset.

This entry was posted in Budget.

Comments are closed.