Diary

On the Tax Deal

It seems alright. I’m not excited about it, but hey, a compromise is a compromise. Though when it comes to what we can take away from the whole thing, I agree with El Rushbo: the Congressional leadership of us Republicans are not very good negotiators. We could have gotten quite a bit more; there was really no chance that Obama wouldn’t come to any terms whatsoever. He needs the support of the middle classes more than he needs the die-hard progressives in any case. There was no way that Obama would have sat the whole thing out to spite the wealthy.

What I’m least happy about is the return of the inheritance tax and the increased jobless giveaways for another 13 months.

From Washington Post:

The Obama-GOP compromise would (1) extend all the tax cuts that are set to expire Dec. 31, including for the wealthiest households; (2) continue long-term unemployment benefits through the end of next year; (3) give businesses a major tax break to encourage capital investment; and (4) provide working couples as much as $4,200 in extra cash in 2011 through a one-year payroll-tax holiday…

Republicans were still pressing on the estate tax, demanding more generous terms that would exempt estates worth up to $10 million for couples and impose a rate above that amount of only 35 percent. On Monday, Biden made a counteroffer: The GOP could have a relaxed estate tax in exchange for a two-year extension of refundable tax credits created in the 2009 stimulus package that benefit college students and working-class families.

McConnell agreed, and a deal was struck late Monday that would give Democrats at least $100 billion more in middle-class benefits than the GOP would win for the wealthiest taxpayers, senior administration officials said.

We did get plenty, but I think that the unemployment goodies could have been pushed to fewer months and we could have kept the inheritance tax out of the picture entirely. Oh well. You can’t win them all.

On the other hand, I must admit that the return of an inheritance tax isn’t so bad in this crisis, provided it’s low and temporary. I can certainly think of worse taxes (VAT, anyone?) and between a heavy increase in income tax and a mild increase in inheritance tax, I’ll take the “death tax.”

I don’t buy the arguments about “we’ll have a double-dip recession if this isn’t passed”. No, we’ll have a double-dip recession if the tax rates suddenly sky-rocket, but it doesn’t necessarily follow that this particular bill will be the only one that we’ll ever agree on. But I digress…

Besides, this isn’t indicative of a major failing for the GOP. Think about it. First people are unsatisfied with Congress’ job, then we get a big win in Congress, and now we’re changing how business is done in Washington by implementing pro-business legislation! Quite a turn-around, no? I might add that if we don’t pass anything and the tax rates get hiked by inaction, the public might think that the GOP really is being obstructionist for obstructionism’s sake and not thinking about the good of the country, which is the very opposite of our intentions. On the other hand, the broad public (of which we are a part, I might add) supports this deal very heavily, no matter what they may think about specific parts. We could easily take the credit for this deal and reap the boost that follows. Perhaps it could even be turned into momentum for next year, get the ball rolling a bit before the New Year.

For some of my fellow conservatives who are outraged, my message is to lighten up a bit. This is a fair deal. Not excellent, true– not by a long shot– but I’m not for pushing our luck all at once. Hold your nose and let it pass. How do I know that it’s a good deal? Congressional Democrats and Paul Krugman despise it with all their mights. That’s good enough for me.