Advancing a Free Society

Congressional Republicans' strategic shift on taxes

Wednesday, November 23, 2011

For months a common story line in the budget debate has been that a bipartisan deficit reduction deal was impossible as long as Republicans refused to raise taxes. President Obama, Congressional Democrats, and many observers asserted that it would be impossible to solve the deficit problem until and unless Republicans agreed to raise taxes. They further argued that if a deficit reduction deal did not come together, Republican intransigence on this point would be the reason why.

The specific argument was that the deficit could only be reduced through a combination of spending cuts and tax increases. This logic was applied to the Super Committee’s $1.2 – $1.5 T deficit reduction target.

The argument that tax increases are necessary for deficit reduction is not arithmetically true – it is quite possible to completely and permanently reduce, or even eliminate, the budget deficit only by cutting spending. In fact it’s not all that hard to do.

It may, however, be legislatively true that in a politically balanced Washington like we have now, a bipartisan deal with Democrats that does not raise taxes is impossible because Democrats will not agree to deep spending cuts as long as Republicans refuse to raise taxes.

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