Fair exchange
by digby
I seem to be the only person on the planet who is skeptical of the Republicans’ alleged willingness to change their spots on taxation and who finds the prospect of cutting “tax expenditures” in exchange for some mix of entitlement and other social spending cuts to be a likely con. Yes, I think it’s a very good thing that 34 Republicans voted to end ethanol subsidies. And I’ll think it’s a good thing if they end some other subsidies and loopholes. But at the end of the day, I don’t think any of those are worth cutting the safety net or any other cut that adds up to real pain for average people.
The ethanol industry is doing very, very well. So are other big corporations who are sitting on mountains of cash. They shouldn’t be receiving subsidies at a time when the government has debt and they are in profit. They should be eliminated. But cutting them doesn’t add up to “shared sacrifice” if retired people are going to have to give up eating dinner as part of the bargain.
Even worse, the idea seems to be because these subsidies and loopholes are being eliminated, we need to also cut the corporate tax rate! Recall this:
I assume the Republicans are going to be willing to sacrifice a few high profile corporate subsidies in exchange for an across the board lowering of corporate tax rates, “entitlement” cuts and the ending of all the tax expenditures that were put in place over the past 30 years by liberals (the only path allowed for social spending in the last 30 years.) Somehow, I doubt that this is going to end well for the people.
But … I could be completely wrong about this. It’s possible that Republicans truly care about the deficit enough that they will break their no-new-taxes blood oath for the good of the nation. Maybe they’ll even go along with raising the income tax on the wealthy, which would raise a boatload of money. Perhaps both parties will pass strict lobbying law or just say no to corporations with wads of campaign cash in hand coming back a year later and reinstating all these special tax breaks. Anything could happen. But my guess is that “sacrifice” on the part of corporations and the wealthy will last just as long as it takes to pass a budget that tears another huge hole in the safety net.
The way to do this so that the America people don’t get screwed is simple. Let’s do the Grand Bargain in stages. We’ll raise taxes on the wealthy and cut the corporate subsidies and loopholes first and see where the deficit is in a decade or so. At that point, if need be, we’ll come and take a look at the middle class and poverty programs. Let the wealthy and big business take the first step — as a patriotic gesture. I’m sure the people will follow their good example down the road if its necessary.
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