The End of Tax Cut Politics - Nathan Newman . . . Forget the short-term storm and thunder over the exact size of Bush's tax cut plan. Below the glee of conservatives at stealing the Presidency last fall, there is a real fear by some that tax cut politics has lost its ability to move the electorate and win elections. Heck, whatever the GOP
mbs: yes, the polls did not support tax cuts, but as we know votes are not the only motive force in elections and policy. As long as taxes are collected somebody will have an interest in them being cut.
If the Dems were not captive to financial deficit hounds and spending-obsessed interest groups, they might have been in a position to compete in the tax cut war with a progressive alternative. They didn't.
NN: . . . The real fear of the right wing is that after passing any tax cut this year, it may be the last time they can even try to run a successful campaign on tax cuts, setting up the next election for a renewed round of vote winning "class warfare"
mbs: see above
NN: . . . enthusiastic. And now, many conservatives fear that, in order to sell the new round of tax cuts for the wealthy, Bush and the GOP have had to offer more increases in child and other tax credits which will take an estimated 6 million more families off the tax rolls. . . .
mbs: there is a concession on the child credit. It's now going to be refundable up to $1K per child, starting at $10K earnings a year. Not bad. But it isn't fully phased in until 2011! One needs to weigh the proportion of benefits going to income classes to gauge this concession, and in those terms it isn't much. CTJ has done the numbers on the new compromise measure. It's still stacked to the rich, and the Repugs aren't done yet. In August there will be new surplus projections. They could easily be higher, setting the stage for a new round of cuts to business.
NN: (quoting a Repug) ". . . half the population will be getting, in essence, a free ride. They can then dictate to the other half."
mbs: people have been dreaming of or dreading this forever. It's always possible for the bottom half plus one to milk the top. But the reverse is possible too. That's what we're getting now. Very thin legislative majorities (not to mention an electoral minority) ripping off the working class.
NN: . . . they no longer will feel any kinship with the rants of the wealthy about the oppression of income taxes.
mbs: I doubt it, but even so, now we are in for a round of rants about the purported 2% ROR in Soc Sec. After the corp tax, the payroll tax is the next target.
nn: . . . Worse for the conservatives, even if the Bush plan is largely enacted into law, there is no guarantee most of its provisions will ever be implemented. In order to keep the total ten-year projected costs down and create a greater appearance of fairness, the tax credits for families are implemented immediately . . .
mbs: not according to the Post this a.m. Much of the plan is phased in, particularly the child credit.
NN: . . . One thing this means is that, according to the Center on Budget and Policy Priorities, the cost of the tax cuts will explode into a $5 trillion cost in the second decade from 2012-2021.
mbs: nobody gives a flyin' shit. but go on w/your bad self.
nn: But the other thing this means is that progressives have up to a decade to organize for new laws canceling the implementation of later phase-ins of the giveaways to the wealthy . . .
mbs: True. but what will they offer in return? Fiscal discipline?
nn: In the best scenario, we could get the positive parts of the tax plan - the child tax credits and deduction of charitable contributions by non-itemizers . . .
mbs: the charity thang sucks. It's unauditable -- a tax cut for cheaters.
NN: By playing the late phase-in game to make the tax cuts look more acceptable, the GOPers may have outsmarted themselves. By next year, progressives can just pocket the upfront tax breaks for moderate income families, then treat each subsequent year's tax phase-in for the rich as a new issue to politically club the rightwing during budget fights. . . .
mbs: I haven't looked at the details enough to know how much of the good stuff comes sooner and the bad later. I do know the 10% bracket comes soon, but that's spread pretty thinly. The child credits are phased in, as is the E&G elimination. The basic idea is well-taken -- there is time to shift the direction before people have bought in to the new system.
NN: . . . It's the end of tax cut politics as we've known it. And I feel fine.
mbs: Unfortunately the alternative at the moment is what James Carville, before he was set straight, called the path of fiscal constipation.