We've Taxed The Rich, Now What?
I won’t tell you that the fiscal cliff deal passed by Congress yesterday was a good thing. I think going over the cliff would have been better for the country. The spending cuts in the sequestration were more meaningful, and the tax hikes were more broad.
I don’t think we’re going to see an appetite develop among Americans for real spending reform until a broader swath of the population begins feeling some of the pain from the rapid expansion of government we’ve seen over the last several decades.
That being said, Republicans have an opportunity here. For five years now President Obama has been harping on the idea that we must address the nation’s fiscal problems by raising taxes on the rich. “The rich must pay their fair share,” the President has repeated ad nauseum.
Ok, we’ve done it. Obama and Democrats had a showdown with Congressional Republicans, and they won. They can gloat. Taxes have gone up, significantly, and especially on “the rich.” The CBO projects that this will add roughly $62 billion in new revenues to a budget that has run a deficit over $1 trillion for the last four years.
So now what? We’ve done the tax hikes. That’s over. Now another debt ceiling looms, technically the nation has already passed it, and Republicans will be in a position to call for big spending cuts while also pointing out that they’ve already gone along with Democrats and voted for tax increases.
I’m not at all convinced that Republicans will make good on the opportunity. I suspect they’ll find a way to squander it. But the window will be open.