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Monday, November 12, 2012

Republicans Shift Stance on Taxing Wealthy?

Are Republicans changing their tune on taxes?:

Republicans shift stance on taxing wealthy, by James Politi, FT: The US Congress should agree to higher taxes on the wealthy to avoid the fiscal cliff, a top Republican economist has conceded in a sign of the rapidly shifting political climate in Washington before negotiations to avert the looming budget crisis.
Writing for the Financial Times, Glenn Hubbard, who advised Barack Obama’s rival Mitt Romney on his losing presidential bid, is the latest prominent conservative to suggest Republicans should change tack and accept the president’s structure for impending budget talks.
“The first step is to raise average (not marginal) tax rates on upper-income taxpayers,” he wrote. “Revenues should come first from these individuals.” The growing debate among Republicans over how to generate more revenue highlights the change in the political mood since Mr Obama’s victory...

It doesn't seem that this is much different than the base-broadening talk we heard from conservatives before the election. So while there does seem to be resignation on the right that some sort of tax increase is coming, I'm not so sure this is as big of a shift as it's being made out to be (e.g., from the article, "Mr Hubbard said a deal could be achieved by eliminating tax loopholes and capping popular deductions – such as those for mortgage interest, charitable giving and employer-provided health plans – rather than allowing Bush-era tax rates for the rich to expire this year, as Democrats are demanding," or, today from Cato, "The Proper Post-Election Agenda: Cut Spending, Then Taxes" which promotes the usual supply-side justifications for low taxes on the wealthy). However, the stories the press tells seem to matter, and if this creates momentum toward the self-fulfilling expectation that Republicans are capitulating on taxes, that works for me.

Update: Grover Norquist:

President Barack Obama did not win re-election because of his promise to raise taxes on the wealthy, but it was because attack ads made voters thing that Mitt Romney was a "poopy-head." During a Monday interview on CBS, Norquist suggested that Republicans had a mandate not to raise taxes, even it meant going off the so-called "fiscal cliff."

    Posted by on Monday, November 12, 2012 at 01:09 PM in Economics, Politics, Taxes | Permalink  Comments (56)


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