Taxing My Patience
Five points to keep in mind as Congress debates the Bush tax cuts.
By Daniel Gross
Slate.com
Posted Thursday, Sept. 16, 2010
Here are five things you need to know about the debate over extending the temporary tax cuts Congress passed almost a decade ago. (For those of you who haven't been paying attention in class, these are known as "the Bush tax cuts" because they were passed at the former president's urging, and if Congress does nothing, they will expire at the end of the year.)
1) All the representatives and senators who voted for the tax cuts in 2001 and 2003 also voted for their expiration. That's how they were designed.
2) The tax cuts could have been made permanent or extended at some point before now. Alternatively, the folks who ran fiscal policy from 2001 through 2008—the Republican White House and a Congress that was controlled for most of that period by Republicans—could have created the conditions that would have made it possible to extend the tax cuts or make them permanent. But they didn't. Instead of running balanced budgets, they appropriated hundreds of billions of dollars to fight two wars, created an expensive, open-ended entitlement without a funding mechanism (Medicare prescription drug coverage), and increased discretionary spending. Oh, and their failures of oversight, regulation, and management led to expensive, deficit-enhancing bailouts.
3) Many Republicans and some Democrats have spent much of the last year warning (falsely, it turns out) that the large deficits we face this year and in coming years would cause inflation, result in high interest rates, and turn us into indentured servants to China. Now, the same folks are arguing for … even-larger short-term deficits that somehow won't have all those ill effects. President Obama's proposal to extend the tax cuts for those making less than $250,000 per year will add $3.2 trillion to the debt. But as the Congressional Budget Office noted, extending them all will add $3.9 trillion in debt. Now, advocating tax cuts without specifying spending cuts (and, no, John Boehner, saying you want to roll back spending to 2008 levels doesn't count) means you're advocating a huge increase in new debt creation. It's sad to say, but it's nearly impossible to find a Democrat or Republican who can speak seriously about how we can align revenues with expenditures. (And, no, Rep. Paul Ryan, your much-discussed "road map" doesn't count, since it cuts taxes on the rich but doesn't lower deficits over the long term.)
(More here.)
By Daniel Gross
Slate.com
Posted Thursday, Sept. 16, 2010
Here are five things you need to know about the debate over extending the temporary tax cuts Congress passed almost a decade ago. (For those of you who haven't been paying attention in class, these are known as "the Bush tax cuts" because they were passed at the former president's urging, and if Congress does nothing, they will expire at the end of the year.)
1) All the representatives and senators who voted for the tax cuts in 2001 and 2003 also voted for their expiration. That's how they were designed.
2) The tax cuts could have been made permanent or extended at some point before now. Alternatively, the folks who ran fiscal policy from 2001 through 2008—the Republican White House and a Congress that was controlled for most of that period by Republicans—could have created the conditions that would have made it possible to extend the tax cuts or make them permanent. But they didn't. Instead of running balanced budgets, they appropriated hundreds of billions of dollars to fight two wars, created an expensive, open-ended entitlement without a funding mechanism (Medicare prescription drug coverage), and increased discretionary spending. Oh, and their failures of oversight, regulation, and management led to expensive, deficit-enhancing bailouts.
3) Many Republicans and some Democrats have spent much of the last year warning (falsely, it turns out) that the large deficits we face this year and in coming years would cause inflation, result in high interest rates, and turn us into indentured servants to China. Now, the same folks are arguing for … even-larger short-term deficits that somehow won't have all those ill effects. President Obama's proposal to extend the tax cuts for those making less than $250,000 per year will add $3.2 trillion to the debt. But as the Congressional Budget Office noted, extending them all will add $3.9 trillion in debt. Now, advocating tax cuts without specifying spending cuts (and, no, John Boehner, saying you want to roll back spending to 2008 levels doesn't count) means you're advocating a huge increase in new debt creation. It's sad to say, but it's nearly impossible to find a Democrat or Republican who can speak seriously about how we can align revenues with expenditures. (And, no, Rep. Paul Ryan, your much-discussed "road map" doesn't count, since it cuts taxes on the rich but doesn't lower deficits over the long term.)
(More here.)
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