Political Animal


April 29, 2013 12:15 PM Tax Reform = Tax Rate Cuts

By Ed Kilgore

In a post mainly devoted to making sure we are aware that congressional Republicans are again contemplating a debt limit hostage-taking exercise, Jonathan Chait raises another development that is of equal importance in the shadow wars of budget politics. After a number of months in which the idea of “tax reform” was closely linked to the president’s demand for more revenues as part of a “grand bargain” on the budget, Republicans have gone back to their past habit of promoting “tax reform” exclusively as a way to engineer lower rates for individuals and corporations:

[W]hat is the GOP position on tax reform? It’s that tax reform must cut tax rates and not raise any revenue at all. So House Republicans are prepared to refuse to raise the debt ceiling unless Democrats agree to let them cut tax rates without increasing revenue. Their extraordinary threat, first presented as a way to force a reduction in the deficit, is now being wielded to prevent a reduction in the deficit.

This shouldn’t be surprising, since closing-loopholes-to-reduce-rates has been the GOP line on the need for “tax reform” from time immemorial. Yes, a handful of Senate Republicans after the 2012 elections suggested that just maybe “tax reform” could be used in part to lower deficits and not just to lower tax rates. But now, the GOP is back on message, and worse yet, you aren’t hearing the sort of assurances that Mitt Romney kept making during his presidential campaign that the rates-for-loopholes swap will not be used to reduce the overall percentage of federal taxes paid by the wealthy. So you could very well see “reform” proposals that make the overall system more regressive, particularly in terms of the very rich who benefit most from rate reductions.

Budget politics have already been skewed by the Republican monopolization of terms like “entitlement reform”—theoretically meaning changes in the entitlement programs that could lead in any number of directions, but now taken generally to mean “benefit cuts”—and “tax reform” could suffer the same fate. That’s maddening, of course, but because “tax reform” is one of those concepts that is generally popular, progressives need either to fight the conservative definition in a forceful and visible way, or find some other term for eliminating loopholes as a matter of fairness and efficiency rather than as a way to offset or disguise tax rate cuts.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.


  • c u n d gulag on April 29, 2013 12:30 PM:

    This proves, yet again, that no matter how much they scream and whine about the deficit, they don't give actually give a sh*t about it.

  • paul on April 29, 2013 12:36 PM:

    Any use of the world "reform" by the GOP or "centrists" is pretty much guaranteed to mean "cuts" or "destruction."

    The messaging on this should be easy enough -- any system where Mitt Romney can pay a lower tax rate than a firefighters or schoolteacher is in need of reform, but not by lowering Mitt's rate.

  • Peter C on April 29, 2013 12:47 PM:

    I think we should eliminate all the unfair 'special interest' tax breaks FIRST and then lower rates only after the increased revenue has eliminated the national debt. Lowering rate at the same time as eliminating loopholes seems irresponsible to me.

  • Th on April 29, 2013 12:50 PM:

    "Tax reform" that shifts taxes lower won't be much more popular to rank and file Republican voters than SS or Medicare cuts. I'm sure they want Obama to go first on this too.

    A "tax reform" I have been advocating for years is to completely scrap the corporate income tax and replace it with a financial transactions tax, treat dividends as regular income, end the carried interest abomination, lower the estate tax exemption and whatever else along those lines we need to do to make up the revenue.

  • Mimikatz on April 29, 2013 1:09 PM:

    The GOP are nothing but hypocritical handmaidens to the very rich and haters of the no -rich, especially the poor. They have Jesus' message exactly backward. One of the downsides of not believing in God is realizing they will probably never get what they deserve. Unless the people revolt, which I don't see on the horizon.

  • boatboy_srq on April 29, 2013 1:46 PM:

    @CUND - they most certainly do give a sh*t about it. Big Gubmint is spending all those extra dollars - dollars Washington doesn't have because "we're broke" and all that - on all those bennies for those Other people. Take away the t-bones and the Cadillacs, make those old folks who weren't smart/responsible enough to plan properly for their retirement get jobs, teach the young the value of a dollar (at the rate of one per day, no doubt) by making them work for their education, and all will be Sunshine and Roses™ (at least for the 1%).

    Interesting how taxation - especially income taxes - instead of impacting only the highest earners as originally formulated, are now deemed "fair" only when assessed at the opposite end of the income scale. "Reform" for the GOP would no doubt end the "free ride" of the 47% rather than distribute the load more fairly. And FSM forbid that taxes should ever be raised on the top earners - punishing Teh Elect will simply make them go Galt (and look how often that's happened - Not!).

    And "entitlement", while it's the Reichwing's new favorite dirty word, is so endemic to their position. 2002 was the first time the US want into any major conflict as the primary combatant without some talk about "sacrifice" and everyone "doing his/her part." War is terrible unless you don't have to a) do any of the actual fighting (as has been said often enough) or b) pay for it (which in context can never be said enough). The Me Generation is out for its Rightful Share™ now that it's outgrown its adolescent fascination with feeling good and with casual relationships, and they're teaching their children that they ought to demand the same easy ride they had (except of course the weed-fogged feeling good part, or the meaningless-sex casual relationship part).

  • Raoul on April 29, 2013 6:40 PM:

    LA TImes, yesterday:

    WASHINGTON -- The U.S. might not hit its debt limit until October because of improved economic growth and higher tax revenue this year, according to a new estimate released Friday.

    But let's start having debit-limit charades now. Fun! (Not at all)