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Thursday, November 15, 2012

'No Reason for Conservatives to Back Away from their Absolutist Anti-Tax Stance'

Is James Kwak correct?:

...if you take the long view, there’s no reason for conservatives to back away from their absolutist anti-tax stance. So they lose an election or two. What happens? When it comes to taxes, Democratic majorities at best hold the line against further tax cuts. After their sweep in 2008, President Obama and his congressional allies passed a couple of modest tax increases to pay for Obamacare (and one of those, the excise tax on Cadillac plans, is one that conservative economists profess to like), but also extended the Bush tax cuts and added a few more tax cuts of their own; now Obama wants to make more than 80 percent of the Bush tax cuts permanent, and last summer he offered up his own proposals for entitlement cuts. When the Republicans return to power, as they inevitably will, they can just pick up where they left off..., for the last eighteen years, the hardline anti-tax position has been a huge winner for Republicans. Given that Democrats have shown exactly zero ability to punish them for it, I can’t see any reason why they should change their ways now.
If there is some sort of compromise in the next couple of months, it’s going to be one that Republicans can frame as a tax cut, not an out-and-out violation of the Grover pledge; one scenario is that the year ends with no deal, tax rates go up, and then Obama and the Republicans agree to cut them. ...
Republicans may object to tax rate increases, and no doubt will, but for once I'm not sure they'll prevail.

    Posted by on Thursday, November 15, 2012 at 12:33 AM in Economics, Politics, Taxes | Permalink  Comments (76)

          


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