On Taxes and Dealmaking in Congress

Update, 4:06pm:
Technically speaking, the current legislation being pushed by the GOP does not raise taxes by itself. No, the tax increase is happening because the GOP put an expiration date on the Bush tax cuts, even though they had total control of the Congress and the White House at various times during the past decade. So, we can thank the GOP for putting us in the current position where tax cuts are automatically set to expire.

The current deal is being rationalized by Republicans as the most that can be done in the light of the GOP-mandated tax increase that is now happening thanks to the expiration of the tax cuts. In reality, of course, this is NOT the best that can be hoped for. The GOP has a veto on all federal legislation in the form of its House Majority. So the GOP could simply refuse to approve any budget until the tax cuts are extended permanently. The GOP does not have the guts or the desire to do this of course, so get ready for a tax increase.

Also, this Plan B will be vetoed anyway, so the current deal is just about sending a message. If they’re in the business of sending a message right now, why not send the message that tax increases are not to be tolerated? Even when they know that their bill is DOA, they choose to accept a tax increase rather than take a principled position against taxes.

Original Post:

There’s a lot of talk about cutting tax deals in Congress these days. I recently criticized Justin Amash for saying he would be open to tax increases if it led to concessions from the other side on some kind of taxing and spending deal. I was criticized by more than one reader for not looking carefully at the context of the situation.

Now, we have Grover Norquist signing off on a tax increase [Plan B] because it “permanently prevents” tax increases on people making less than $1 million.


Amash was justifying his own deal-making on the grounds that accepting a tax increase would somehow permanently cut spending.

Any time a politico talks about “permanently” preventing tax increases or permanently cutting spending, or claims some other unrealized benefit in the future as a result of some deal, you can stop listening.

The fact of the matter is that no Congress can bind a future Congress to any agreement. So, Norquist’s (and the GOP leadership’s) “permanent” prohibition on future taxes is pure nonsense. It’s about as substantial as cotton candy. It means nothing. It can be overturned with a majority vote in Congress at any time. The only way any of these deals could be enforceable in the future would be if they were adopted as constitutional amendments. Similarly, things like 10-year or 30-year plans to balance the budget, like the Paul Ryan plan, are testaments to the imperishable gullibility of Republican voters.
So, when these deals are struck, the people who are signing off on tax increases for some imaginary benefit in the future should really say “Well, we signed off on a higher tax rate, but in our fanciful version of the future, our buckling under on this issue will prevent taxes from ever going up.”

Translation: “Taxes will go up, and we can’t guarantee you anything in return for this except the higher tax rates we just agreed to.”

This is nothing more than politics and attempts by lobbyists and politicians to claim that they struck a blow for liberty when they really did nothing of the sort.

Congressional deals of this sort mean nothing. They are unenforceable. The promised benefits will never be delivered. What does matter is principled opposition to more taxes and more spending.

I might also point out that the Income Tax was adopted when voters were promised that the income tax would be applied to millionaires only. That was in 1913. I’m sure the Grover Norquists of 100 years ago told us that the “deal” would ensure that the income tax would never be applied to non-millionaires, and we had to sign off on this to balance the budget. Fiscal responsibility demanded it. Those who opposed the new tax were just old fashioned, politically naive, and not savvy enough to see how in the future it would prevent tax increases on ordinary people. A great deal, indeed.

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12:11 pm on December 20, 2012