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Tax Cut “Compromise” is Not a Compromise

It’s amazing that Republicans are about to get away with calling the extension of the entire Bush tax cuts a “compromise.” But that’s what’s going to happen. Here’s incoming House Budget Committee Chair (shudder) Paul Ryan.

Rep. Paul Ryan (R-Wis.) said that some sort of compromise is in order, such as a temporary extension of one or two years.

“They control this in the lame duck. It’s much better if you do this in the lame duck. If you go after the first of the year, after tax laws and tax forms have been changed and printed, it’s really ugly. It’s bad for the economy. It’s bad for jobs,” Ryan told MSNBC. “Get it done now. I understand it’s not going to be permanent like we would like it. But get it done in the lame duck. It’s better for the entire economy.”

Let’s be clear: Republicans don’t want a permanent tax cut extension. This is working out just fine for them. In another year or two, they’ll join this debate again, talk about nonsense like uncertainty and small business costs, and bend Democrats to their will again, making their supporters pleased and dampening the spirits of the other side. If they finished with the issue with a permanent tax cut, they wouldn’t have anything to demagogue down the road.

So this temporary extension, which essentially operates like a permanent extension, will come to be seen as a “deal.” But it’s the direct opposite of what Democrats all over the country have been running on for the past seven-plus years, since the passage of the 2003 tax cuts. Democrats are now bargaining off that, looking to add a bracket and raise rates over $1 million dollars of income, or to use the tax cut for the rich on business tax cuts, or even to extend the Making Work Pay tax cuts that have been in place the past two years, through small decreases in weekly withholding. But none of these compromises get around the facts that Democrats are about to fail to deliver on a signature campaign theme over four straight cycles. They may not even get anything back in the “deal.”

Incidentally, with all the hubbub about the budget deficit, it’s important to point out that most of the savings from the Bowles-Simpson cat food commission report could also come simply from all the Bush tax cuts expire. It would be a one-page recommendation. If you just want to confine it to allowing the tax cuts on the rich to expire, you’d get more than half the way there. Yet that’s not how anyone who thinks themself qualified to opine on the budget deficit sees it.

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David Dayen

David Dayen