Beware of Revenue Neutrality

July 4th, 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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3 comments in reply to "Beware of Revenue Neutrality"

  1. Tyler says:

    John Cornyn is not an honest broker. He, like the rest of his party, is using the debt ceiling to advance his ideology. Lower taxes to balance the budget? What’s next, privatizing Medicare to save it?

    These people need to be put out of power for good. 2012 needs to be a wave election for liberals.

    • Michael says:

      There’d have to be a pretty impressive wave of Dem primaries first for that to be true.

  2. Michael Shaw says:

    Whatever “deal” both party’s arrive at, you can be sure it will not benefit the bulk of most Americans. If democrats save what’s left of the New Deal they will lose a whole lot of corporate campaign finance. If they do not protect these programs they will lose a whole lot of votes. Either way Wall Street wins because there is no third party alternative running for president. Even Nader is sick of trying to run, fighting both democrats and republicans to get on state ballots, only to find people who asked him to run once again voting for the “lesser” of two evils. Once there might have been some validity to doing that and perhaps there still is concerning those 80 or so democratic house members who voted for the People’s Budget, but the rest of them are all in Wall Streets pockets so how on earth will “We the People” ever get a fair deal from either party? I see Obama breaking his promise while explaining how this was the best deal he could get. Well I won’t buy it and neither will millions of his constituents. Either Obama will win from the absurdity of his republican rivals, or one of the GOP’s worse fruitcakes will win. We will lose, as will this once great but now corporately controlled nation.