Tax reform follies
by digby
In case you were wondering about the chances of any future tax increases, Wolf Blitzer helpfully spelled it out for us this morning when Gloria Borger seemed to be confused as to why Paul Ryan voted against the Simpson-Bowles plan because it raised taxes while still purporting to be in favor of tax reform:
Wolf Blitzer: As far as the tax increase is concerned, what the purists who have signed Grover Norquist’s pledge, what they say is that there can be tax reform. You can eliminate certain deductions, certain subsidies, certain loopholes and you can lower the overall tax rates. What they can’t do as part of a package is they can’t see an increase in tax revenue.
In other words, if you’re going to eliminate loopholes, you’ve got to make sure that when all is said and done, there’s no increase in the amount of money the government is getting in taxes. Otherwise they would view that as a violation of that pledge, “no new taxes.” In other words there can’t be an increase in the amount of tax money coming in from a change in the tax revenue.
There can be an increase in the amount of tax coming in from an improved economy. In other words, if there’s greater prosperity and more people are working so as a result are paying taxes there will be enhanced revenue from taxes. But they don’t want to do that as a result of any changes in what’s called tax reform.
Wolf didn’t seem to think it odd at all that Norquist’s troopers have unilaterally decided that the government will never be allowed to raise taxes and seemed to think it was quite a concession that they would allow the government to collect more revenue if more people were working.
But as I assumed, the “tax reform” that will be allowed will have to be revenue neutral, which is the only thing that really makes sense. Even the administration says they want to cut rates as part of the reform, which would be nonsensical if they truly trying to raise money to fix the deficit. We’ll still be counting on the confidence fairy to bring in more money.
And the good news, apparently, is that Grover Norquist and the Tea Party haven’t yet decided that all new revenue must be balanced by corresponding tax cuts. Never say they refuse to compromise.
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