Cantor Says No Deal on Tax Cuts

The Hill:

Cantor, Republicans signal Obama tax proposal is dead in the water

The Obama administration’s hopes of reaching a tax deal with Republicans that would decouple rates on the rich from the middle class appear dead.

House GOP Whip Eric Cantor (Va.) threw cold water on the proposed plan, which would temporarily extend tax cuts for the wealthy while permanently extending tax cuts for the middle class. “Taxes shouldn't be going up on anybody right now,” Cantor said.

Cantor’s comments Monday evening on Fox News follow similar remarks from Sen. Orrin Hatch (R-Utah), the incoming senior Republican on the Senate’s tax-writing committee. While Hatch expressed an open mind to extending tax cuts past the 2012 election rather than permanently extending the rates, he also ruled out the decoupling proposal.

Note that the assumption behind this article is that Republicans won't back down -- and implicitly it assumes that Democrats will back down. The reason I point that out isn't to criticize the reporter; everybody makes assumptions. Rather, it's to point out that if Democrats and the Obama administration validate those assumptions on the tax cut fight, not only are we going to end up with some bad tax policy, we're also going to be setting the stage for a two full years of backsliding.

As brooklynbadboy argued earlier today, now is the time to go on offense -- when Republicans are least expecting it.

President Obama should turn the tables on that argument by pointing out, repeatedly, the truth: It was President Bush and Republicans who created this expiring tax cut business in the first place. By making it clear that it is Republicans who created this mess, he can then step in with a new "Obama Permanent Tax Cut for the Middle Class." The only way to win this thing is to outflank the GOP and go on offense, not continuing to offer a weak posture that only encourages them to keep moving the goalposts.

President Obama has already said he'll oppose a permanent extension of tax cuts on income over $250,000. I'm not convinced that's a tactical error, but only if it is also combined with an equally forceful insistence on making tax cuts permanent on all income below $250,000. We like to call those "middle-class" tax cuts, but the reality is those are tax cuts that go to every single taxpayer. They are fair and everybody gets treated the same.

Republicans want to hold those tax cuts hostage in order to get a permanent extension of tax cuts that only go to people making more than $250,000 per year. Failing that, they don't want anybody to get a permanent tax cut -- they want to keep their hostage-taking leverage for the next time this battle is waged.

President Obama has an opportunity to here to do what Congressional Democrats refused to do last fall: beat Republicans at their own game by calling their bluff and revealing the GOP's true agenda. Conventional wisdom is that Democrats can't afford to let taxes go up, but that presumes Democrats should be blamed if taxes go up. If Democrats make that presumption before even sitting down to negotiate, they've lost before the game has even started.

President Obama should stand firm on his position that the across-the-board tax cuts should be made permanent -- and that Republicans shouldn't use them as leverage to obtain special tax cuts for the wealthy. A temporary compromise is on the table for the upper-income tax cuts, but only should be agreed to if tax cuts on income below $250,000 are made permanent. If Republicans want to make the case that across-the-board tax cuts should only be made permanent if we also make permanent the tax cuts targeting income over $250,000, let them go right ahead and make that case.

And If Republicans refuse to negotiate, then the last thing Democrats should do is accept blame for raising taxes. As bbb argued, it's Republicans who made them expire in the first place. And if they won't negotiate now, then it's Republicans who are the ones responsible for raising taxes.

The only thing Democrats have to fear at this point is fear itself. Failure on the tax cut debate is not an option.

Daily Kos / By Jed Lewison | Sourced from

Posted at November 9, 2010, 1:20pm

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