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Playing Politics on Taxes: Only One Side Knows How

The tax cut debate offers a glimpse into how the parties play politics in America these days. Democrats, who have a winning argument in the country on their position, instead have no consensus on their position whatsoever, and have begun to bargain with themselves. Their latest infatuation, a millionaire’s bracket, isn’t necessarily a bad idea (I think we need more brackets generally), but extending the tax cuts for everyone but millionaires allows 90% of the Bush tax cuts to go through.

Using very rough, preliminary numbers, they concluded that the ten-year cost of extending tax cuts for incomes below $250,000 was $3.2 trillion and that the cost of extending cuts for incomes less than $1 million was $3.6 trillion. In other words, the higher threshold would cost an additional $400 billion over ten years.

The total Bush tax cuts for the next ten years is $4 trillion. Saving $400 billion dollars isn’t nothing, but when you’re already putting a $3.6 trillion dollar hole in the budget, it’s not doing a whole lot of good. Not to mention that the decoupling, essentially saying you can only raise taxes on millionaires from this point forward, basically ends the ability to get any revenue to fund progressive policies in the near and medium-term. It gives up the tax debate.

So that’s how Democrats argue. Republicans?

Despite what some Democrats in Congress have suggested, voters did not signal they wanted more cooperation on the Democrats’ big-government policies that most Americans oppose. On the contrary, they want both parties to work together on policies that will help create the conditions for private-sector job growth. They want us to stop the spending binge, cut the deficit and send a clear message on taxes and regulations so small businesses can start hiring again.

Republicans got the message voters have been delivering for more than a year. That’s why we made a pledge to America to cut spending, rein in government, and permanently extend the current tax rates so small-business owners won’t get hit with a massive tax hike at the end of December. That’s what Americans want. And that’s the message Republicans will bring to the meeting today. In other words, you’ll have a voice at that table.

That’s from an op-ed today by John Boehner and Mitch McConnell, in advance of a meeting at the White House about the tax cuts. They give absolutely no quarter, and why should they? The Democrats have been coming to their position for the past several months.

Meanwhile, we’re going to see a purely symbolic vote on the Democrats’ initial plan, extending tax cuts on the first $250,000 of income, which they telegraphed as a symbolic vote in advance. That makes it easy for Eric Cantor to say that the GOP will hold together in opposition.

It’s like the Democrats are a visiting tour group playing Model Congress sometimes.

The other part of this is that DC Democrats simply believe that they will lose any fight on taxes, regardless of the polls. That defeatist attitude makes their positions on the issue meaningless.

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David Dayen

David Dayen