Should Democrats Allow Us To Go Over That Cliff?

On Wednesday night’s edition of The Last Word, Lawrence O’Donnell, brilliantly, suggested a Democratic strategy for winning the war on taxes, in terms of getting rates raised on the top two percent of wealthy Americans.

He simply urged Democrats to let all of the Bush tax cuts expire on January 1 (go “over the cliff”) and then immediately introduce a bill to cut taxes only for those making $250,000 or less, leaving the Clinton-era rates in place for the wealthy. He argued that given the Republican Party’s undying loyalty to Grover Norquist and his tax pledge, they would have no choice but to support the Democratic proposal. How could they defend not voting for a tax cut for 98% of Americans?

O’Donnell reminded viewers that they would have to tolerate a short period in January where their taxes would go up, but after the legislation passed they would get a retroactive refund of those increased taxes.

Now, as I say, this appears to me to be a brilliant strategy and one that has potential. My only concern is that those Bush tax cuts for everyone under $250,000 should not become permanent, but should be modified in the future, after the economy has sufficiently recovered, so as to  help get and keep our fiscal house in order.

Other than that, it may be a strategy that works, although as O’Donnell suggested, Democrats may not have the, uh, huevos to pull it off. We shall see, but it remains an interesting concept.

3 Comments

  1. Early 2013 is bound to be an interesting year for other reasons as well. If Romney wins and carries out his promise to “kill ObamaCare”, reality is going to hit in an ugly way. He will be scrambling to replace it with . . . something. Is anybody so naive as to think there’s a real plan for doing that in a desk drawer somewhere? Going to be messier than scrambled . . . huevos.

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  2. ansonburlingame

     /  July 19, 2012

    “Brillant” uhhh! Maybe in a political sense but not economically.

    Even the Chairman of the FED is now suggesting another recession is headed our way and ANY tax increase will only accelerate that next recession, not delay or prevent it.

    Obama has consistently pushed for INCREASING taxes on the rich since he came into office. Rescinding the Bush tax cuts on the rich is in fact a tax increase on the rich. Call it what it is.

    But the GOP has prevented Obama from doing so for now almost 4 years and progressives are trying to use politics, again, to raise taxes on the rich only. We will have to wait and see how it the politics plays out, again, this time around.

    As well this whole argument is over about a $70 Billion a year change in federal revenues which as I have noted many times is a drop in our fiscal year defict bucket. We are looking at a defict in the range, again, of about $1.5 Trillion. Making this change would lower the deficit to $1.43 Trillion IF and only IF all that increase in federal revenue went to deficit reductions ONLY, which you KNOW will not happen as well.

    Face it, everyone, please. Both sides, GOP and Dems, are merely tinkering around the edges of economic issues. NO ONE has the politcal will or “guts” to do what really needs to be done.

    What is that you ask? It is to increase federal revenues AND cut federal spending drastically to move towards a balanced budget and STAY there with such a budget for the foreseeable future. We have not even tried to do that for 50 long years now and are dealing with such consequences.

    Answer this question, progressives. How much money each year should the federal government spend? Is the number $2.5 Trillion, $3.0 Trillion, $3.5 Trillion, $4.0 Trillion, or pick a number.

    THEN go read Jim Wheeler’s latest blog and listen carefully to the linked audio program suggesting DRASTIC changes to our tax policies to achieve such spending goals.

    Yes, the six recommendations contained in that audio program are truly DIFFERENT, even radical. But our economy is in such a mess right now and heading towards an even greater mess in the future that major and different ways of funding the federal government are called for.

    Since WWII at least Western Democracies have gravely overspent for both social and defense reasons. That must come to a close if Western Democracies are to flourish in the future. Taken as a whole the $17 Trillion EU GDP plus the $15 Trillion American GDP is insuffincent to support the level of government spending in such democracies, year in and year out.

    No way are those democracies, as a whole or in part going to be able to “growth their way back to prosperity”. Prosperity must be redefined instead.

    That is the underlying political problem confronting all of us in Europe and America today. And what the American political parties are proposing right now do little or nothing to resolve such huge issues, in my view.

    Anson

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  3. Perfect. Bold. Shared.

    Thanks!

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