The discussion about “extending” the Bush tax cuts beyond this coming January is a worthwhile debate, but the Republicans have made a tactical error by accepting the premise that we will be “extending tax cuts” rather than increasing taxes. When John Boehner appeared on Face the Nation and agreed that he would extend some of the tax cuts even if he could not extend all of them, he made the same mistake.
The reality is that this debate is not about tax cuts.
If we do nothing, then tax rates will increase in January. To call this a “tax cut” simply ignores reality and accepts a false premise. If tax rates stay the same, no one gets a tax cut. If tax rates go up, then people will pay more in taxes. That is what those of us in the reality-based community call a tax increase.
Republicans need to stop talking about “extending tax cuts” because in reality rates will merely stay the same. Republicans have been on offense politically all year long, so there is no reason to punt the ball on this issue. Republican candidates around the nation – and the Republican leadership – need to start challenging Democrats on why they support tax increases scheduled to take effect this January.
In a sluggish economy that saw the unemployment rate go from 7.7% in January 2009 to 10% by the end of the year, we do not need to have a tax increase on anyone. If we increase taxes at this time, we will discourage investment and job creation. Democrats can whine about “tax cuts for the rich” all they want, but it is the people in higher-income brackets (including businesses) who are creating jobs though investment.
Is it a surprise that economic growth has been sluggish with these tax increases on the horizon? It shouldn’t be. Stopping scheduled tax increases is a political winner – but Republicans need to start framing it properly.