I was watching Morning Joe this morning and Joe Scarborough was touting the fact that GOP is now offering $300 billion revenue increase over a 10 year period. He boasted that this proves that the GOP is willing to compromise, and although he did acknowledge that the revenue increase is still extremely low, that it is an example of Republicans willingness to compromise.
The GOP has been successful in lowering the expectations of their economic policy proposals, so now any proposal they have, no matter how minute and/or paltry, is cheered by the right and held up as proof of their willingness to compromise. However, if you look at where this added revenue is coming from, you will see that this is another “wolf in sheep’s clothing” proposal.
This is not a proposal to equalize a tax system that grossly favors the wealthy. It would actually have the effect of increasing middle and lower class income taxes while cutting the taxes for the very wealthy….again.
Congressional Republicans have offered to increase tax revenue by nearly $300 billion over the next decade through an overhaul of the tax code, a significant concession aimed at breaking a long-standing impasse in negotiations over the federal debt.
The offer envisions a tax code rewrite that would lower rates for everyone while raising overall tax collections by $250 billion, mainly by limiting the value of itemized deductions such as write-offs for home mortgage interest, state and local taxes and other expenses.
The problem for the GOP is that the citizens of this country are now awake and focusing on the specifics of their economic policy. Washington Post’s Greg Sargent wrote that if Democrats want an agreement to raising revenue, Republicans want to not only make all of the Bush tax cuts permanent, but they also want to lower the top income tax rate from its current 35 percent to 28 percent:
The highest tax rate would be reduced from 35 percent to 28 percent under the emerging GOP tax code overhaul proposal, the senior Democratic aide tells me. And the reduction would actually be even bigger than this.
After all, if the Bush tax cuts were allowed to expire, as they’re set to do, the high end rate would go up to at least 39 percent. In other words, the aide says, under the proposal Republicans are pushing, the drop down to 28 percent would be at least 10 percentage points from what it would be if the cuts are allowed to expire.
Pat Garofalo of ThinkProgress wrote:
According to Center for American Progress Director for Tax and Budget Policy Michael Linden, the reduction in the top tax rate alone costs $670 billion, which exclusively benefits the wealthy. Meanwhile, limiting itemized deduction in the way that the GOP suggested to the Wall Street Journal’s Stephen Moore would, according to Linden, raise $560 billion from the wealthy. So the rich are still getting a tax cut.
The rest of the revenue that the GOP has to raise to net $300 billion, therefore, must come from middle- and low-income households. Let’s emphasize that again: the GOP’s big “concession” when it comes to deficit reduction is paltry amount of revenue that will come from many middle-class households, paired with a huge tax cut for the rich.
Simply put, the GOP’s plan is not a concession, but a joke meant to make them look reasonable as they continue to push for lowering tax rates on the most well-off Americans. As one Democrat said, “they either think we’re morons or desperate.”