I supported John Boehner's Plan B. I did so because it had so many income tax fixes and made them permanently.* I didn't follow the holiday-lawmaking closely but what I did hear and read was depressing. The "millionaire's tax rate hike" was lowered from $1M to $400,000 ($450,000 for couples [marriage penalty anyone?]) and the ratio of tax revenue increases to spending cuts was forty-three to one. But dagny emails an article that looks at the full portion of the glass.
Yesterday, the government voted to extend almost all of the Bush Tax Cuts permanently.
Not temporarily, as a stimulus measure.
Ever since the Bush Tax Cuts were first enacted in 2001, one goal of the Republican party has been to "make the Bush Tax Cuts permanent."
For most of the last decade, this goal has seemed like an extremist view: Making the Bush Tax Cuts permanent would drastically reduce the federal government's revenue. It would also increase inequality and balloon the national debt and deficit--so how could we possibly justify doing that?
And yet now, suddenly, almost all of the Bush Tax Cuts are permanent.
The Republicans also got another good deal for America's investor and owner class, making the Bush dividend tax cut permanent. This saves a lot of money in tax bills for America's wealthier investors.
It's true that the Republicans have not yet won much ground on the other front that the party claims to be fighting on--namely spending cuts on programs that primarily benefit low-income and middle-income Americans (food stamps, Medicare, Medicaid, Social Security, unemployment insurance, and so forth).
But the key word there is "yet."
This is not to say our market economy is in the clear but as far as the legislative action taken yesterday, it could have been much worse.
* "Permanently" only means without an expiration date, but it is still important because significant political capital must be expended before it changes again.
Posted by JohnGalt at January 2, 2013 2:40 PM