Jul 04, 2011 at 4:09 pm
This is what I thought might happen:
Republicans make sounds like they’re agreeing to revenues in the budget deal, but then take it all back with two little words: revenue neutral.
Republican Sens McCain and Cornyn made news over the weekend by suggesting they’d be open not to higher tax rates, but to closing some tax loopholes and thus raising some revenue. President Obama and the D’s have been hammering pretty hard on this, focusing on tax breaks for private jets, oil companies, and hedge fund managers.
But according to the reports, Cornyn at least has been saying these changes have to be revenue neutral, meaning any revenue gained from closing a loophole has to be given back through lower tax rates. In other words, no revenues for deficit reduction, and thus no real contribution to the budget negotiations.
Democrats insisting on revenues in the deal can’t accept this. In fact, a deal that has trillions in spending cuts “balanced” against a few hundred billion in revenues through a few loophole closures isn’t much of a deal at all.
As I show here, there is real money available through ending these tax breaks. If that’s where the deal takes us, let’s really go there.
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