Jun 21, 2011 at 9:21 am
Ezra reports that Republicans who have been stonewalling on tax revenues in the budget deal might be open to cutting some tax expenditures. These are the $1 trillion or so of “spending through the tax code” that everyone theoretically wants to go after until you start indicating which ones should go.
That’s Ezra’s point: that even if they go there, they’re unlikely to want to “raise serious amounts of revenue.”
I’ve got an additional concern, though. They may not want that revenue to go to deficit reduction. The mantra on this aspect of tax policy is “broaden the base, lower the rates.” But that latter part is dialable, meaning you can lower the rates far enough to give back all the revenue you just gained from closing the loopholes. In Ryan world, e.g., any base broadening tends to be fully returned to upper end taxpayers through lower tax rates–i.e., it’s revenue neutral, so it doesn’t help with deficit reduction.
So this may be a positive development, but we’re not there yet.
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