America Dodges a Super-Tax-Hike as Super-Committee Collapses
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Didn’t our Democratic friends always intend to derail the super-committee over the top Bush tax rates?
You remember that $800 billion revenue number always floating around from the Democratic leaks? Well, that’s the static-revenue estimate of repealing the 35% and 33% Bush rates. Sometimes that Democratic revenue number moved up to $1.2 trillion. Well, that would include the static-revenue estimate of the 5.6% millionaire surtax. Get it?
In an important sense, the whole super-committee debate from the Democratic side was about taxing the rich. They never went quite as far as President Obama’s populist class-warfare rant, at least not publically. But basically this logjam was about so-called tax fairness.
Ironically, when the automatic spending cuts trigger in, Speaker Boehner will win out. His original vision — going back to the debt-ceiling debate last summer — was $1 in spending cuts for each $1 of debt increase. So the sequester will get $1.2 trillion in spending cuts on top of last summer’s $1 trillion.
No it’s not great. We should have done $4 trillion to $6 trillion by reforming entitlements and undergoing pro-growth tax reform for individuals and corporations. But at the end of the day, we dodged a super tax hike and got a couple trillion dollars of lower spending. Not the worst thing in the world.
