As you have heard, the tax-cut compromise was enacted last night, and will become law as soon as President Obama signs it. I’d been on the radio all over the country explaining why it’s bad, but I guess Congress didn’t listen to me!
I just want to make two points today, so I’ll keep this short. First, the House Democrats were really disappointing. Everyone expected them to add an amendment to increase the estate tax on estates over $3.5 million, giving them some chance to negotiate a better deal from the Senate. They were supposed to have the votes for that, but they didn’t do it.
By the way, I keep hearing conservatives call it the “death tax,” as if that’s supposed to be bad. Why? In the UK, “death duties” were introduced by the Labour government of the 1940s, specifically to break up the hold of the old aristocracy on the countryside. It was wildly popular under that name! Maybe we should be more straightforward here.
But on to my second point. Today’s Washington Post reports that:
Key lawmakers in both parties have embraced a deficit-reduction plan produced by Obama’s fiscal commission, which includes a tax overhaul that would lower rates across the board but raise additional revenue by closing dozens of long-standing loopholes, such as the mortgage-interest deduction claimed by many homeowners. Meanwhile, the relative ease with which Obama and the GOP were able to strike a deal over the Bush cuts has raised hopes on both sides for productive talks in the future.
In other words, now that they’ve warmed up by preserving the Bush tax cuts and undermining Social Security with the “payroll tax holiday,” Obama, the Republicans, and the Democratic leaders in Congress are going to go on to pursue the wholesale attack on Social Security called for by the deficit-reduction commission. That may be the worst part of the whole deal.
What do you think? And what do you think those opposed to the deal should do now?