Anyone who thinks that Democrats have suddenly got religion on revenues and the need for tax hikes on the rich (or simply to let the Bush tax cuts expire entirely) should take a look at the Tax Day press release I just got from the Senate Dems. Here’s the headline:
“FACT SHEET: DEMOCRATS HAVE PASSED $1.5 TRILLION IN TAX CUTS SINCE 2007″
Here’s the subhed:
“Americans’ Tax Burden Is At Its Lowest In 60 Years”
Here’s the first line of the release:
“Democrats know that one of the best ways to help our economy recover is to reduce the taxes that families and businesses pay each year.”
The rest of the release denotes all of the tax cuts Senate Democrats have passed since January 2007, and it’s a pretty accurate list.
Perhaps, you say, they’re just rebutting the “tax and spend liberal” label and doing so effectively. But if you think this is the crew that’s going to pick a fight on taxes, even for the rich, I think this release puts that to bed. They see endless tax-cutting as a selling point. And whether you think the deficit matters or not, the end result of lowering revenue to a 60-year low ends up being an artificial demand for spending cuts, which we just saw ushered in with the 2011 budget. And if the fiscal policy debate is to be believed, that’s only the beginning.
Another data point here is Mark Warner’s performance yesterday on Face the Nation:
WARNER: Bob, I think you’ve got to look at both sides of the ledger. Long before I was in politics, I spent 20 years in business. I built companies. And you’ve got to look at the revenue side. You’ve got to look at the spending side.
We’re looking at a ratio of about $3 in cuts for every additional dollar in revenues. And the revenues we’re talking about literally are coming from lower rates, where we can lower our rates on individual and on corporate rates back to where they’re much more competitive on a worldwide basis. But we’re getting rid of a number of the tax expenditures.
I mean, a fact that I’m not sure most Americans realize — we collect about $1 trillion a year in income taxes, yet we have $1.2 trillion a year in income tax expenditures, deductions, many of them that are popular, charitable deduction, home mortgage deduction. If we would cut back on some of those, we could actually lower rates and still increase revenues.
SCHIEFFER: So that’s where you would get the additional revenues, by eliminating deductions, not necessarily by raising taxes?
WARNER: We’re not talking about raising taxes.
Now, you could have a field day eliminating tax expenditures, many if not most of which benefit the rich and corporations. But as Digby notes, these are the kind of zombie policies that are hardest to kill. They get less scrutiny than spending programs, the writing of tax expenditures is dominated by lobbyists, and they’re easy to slip into any old tax bill. What’s more, as made clear by the press release I initially noted, members of both parties LIKE tax expenditures. Republicans say they’re rewarding investment and entrepreneurship, and Democrats say… they’re rewarding investment and entrepreneurship, only the “right” kind.
And at least on the corporate side if not on the individual income tax side, the White House wants to offset the elimination of all these tax expenditures by lowering the corporate tax rate, making for a revenue-neutral reform. And so GE or Bank of America, which paid no tax before, will probably be safe from having to pay any tax again.
In addition to all this, Warner said Sunday that Social Security, which hasn’t added one thin dime to the deficit, would have to be part of any solution. You know what could really help out the finances of Social Security, as long as we’re lumping it in with the budget deficit? How about some of those $1.5 trillion in tax cuts enacted over the past four years!