There's some attempt to put a positive spin on the tax bill approved early this morning by the Senate on the grounds that it raises taxes only by an estimated $600 billion over ten years rather than the $1.6 trillion over ten years that was President Obama's post-election opening demand. Don't buy that.
One important indication is that Rand Paul and Marco Rubio both voted against the bill.
Another important indication is that the Senate and the House both are probably going to vote on it not only without the seven-day public examination period recommended by Grover Norquist, but without even the three-day preview that had been promised by Boehner's Pledge.
A third indication is the Washington Post's report that "When considered as a percentage of the size of the nation's overall economy, the increase in taxes set to occur Tuesday is likely to be largest in about 50 years, according to a study of previous tax policy changes by Jerry Tempalski, a tax analyst in the Treasury Department."
Fourth, it's not clear that the $600 billion number for the tax increase over ten years includes the effect of the expiration of the payroll tax cut, which, over ten years, could actually add up to something like $1 trillion, making the total tax increase more in the range of Mr. Obama's original demand.
Finally, rather than (or in addition to) simply slapping the old Clinton 39.6% top tax rate on incomes above $450,000 for joint filers, the economist David Malpass of Encima Global reports that "For incomes above $450,000, the bill also appears to take away the lower tax brackets, applying a 35% rate to all income up through $450,000." New Yorkers know this as a "benefits recapture" provision, and if Mr. Malpass is correct that it's there, it's not pretty.
Reader comments on this item
Comment on this item
Subscribe to the Mailing List