The tax plan put forward this week by Republican leaders in Congress would add nearly $4 trillion to the national debt and would be offset only by a $300 billion spending freeze, a Washington Post analysis states.
While the cost of the Tax Hike Prevention Act of 2010 hasn’t been calculated yet, the Post reports that a similar but “slightly more expensive” plan analyzed by the non-partisan Congressional Budget Office found it would cost $3.9 trillion over 10 years, making it roughly four times as expensive as the Democrats’ health reforms, which will cost less than $1 trillion over the same period.
The Republican tax bill, introduced this week by Senate Minority Leader Mitch McConnell (R-KY), aims to prevent the Democratic-controlled Congress from letting the Bush tax cuts of 2001 and 2003 expire. The tax reductions will expire at the end of the year if they are not extended.
The Post notes that an accompanying spending freeze proposed by McConnell would save $300 billion, which the newspaper describes as a “drop in the bucket” compared to the cost of the tax cut extension.
The plan’s hefty price tag, coming at a time when many in the Republican grassroots are growing alarmed about skyrocketing budget deficits, has provided the Democrats with fuel for the mid-term elections, as they seek to paint the GOP as dishonest or hypocritical when claiming to be the party of fiscal responsibility.
The Democrats’ plan for the tax cuts hasn’t been fully worked out yet, but the Post reports that President Obama’s favored option — allowing the tax cuts to expire for households earning more than $250,000 a year, and making them permanent for everyone else — would raise the deficit about $1.4 trillion.
Pat Garofalo at ThinkProgress reports that the GOP’s plan includes a cut to the estate tax “that would gift $91 billion to the richest 0.25 percent of households.”
The Republican tax plan comes despite recent polls consistently showing that a plurality of Americans want to see the tax cuts for the rich expire. The latest poll, conducted for CBS News and the New York Times, finds 53 percent in favor of rescinding the tax cuts, with 38 percent opposing the move.
In a US News & World Report column, Democratic strategist Peter Fenn describes McConnell’s proposal as “scary” and says it uses “Halloween math.”
Is this a conservative taxing and spending prescription? Is this coming from the same party that has been complaining about out-of-control deficits? Who urges us to tighten our belts? Who professes to solve our economic problems?
This is ideological politics, not pragmatic public policy. It is the single-minded mantra of tax cuts as the answer to every problem, when it actually exacerbates the problem.
Yet despite the criticism and the price tag, GOP leaders appear to be rallying to the plan. House Minority Leader John Boehner (R-OH), who just this past weekend indicated he would be willing to accept the Democrats’ plan to end the tax cuts for the rich, appeared to have changed his mind by Wednesday. The Washington Post reports:
At a news conference on Capitol Hill, Boehner repeatedly emphasized that he would support only legislation that kept in place all of the tax cuts. He sidestepped questions about how he and Republicans would vote if Democrats insisted on pushing through a measure that ends the tax cut on household incomes of more than $250,000 a year.