Higher Taxes And Epic Tax Fight Are On The Horizon
By Janet Novack
It seems obvious that the legislation President Obama has just signed raising the national debt ceiling in return for $2.4 trillion in deficit cuts won’t lead to tax hikes or the sort of loophole- closing, revenue raising tax reform that the President, his bipartisan deficit closing commission and the Senate’s bipartisan Gang of Six have all called for.
That’s not because the terms of the new law prohibit a newly created Congressional committee from including tax hikes or tax reform in the $1.5 trillion in savings it must come up with by Nov. 23rd. (If the six Republicans and six Democrats on the committee can’t agree on savings or the House or Senate rejects the deal, then big automatic cuts in defense and domestic programs, including Medicare, kick in.)
Nope. This committee won’t raise taxes because Republicans simply won’t agree to it. “What we’ve learned from this go round is when the Republicans say they’re not going to raise revenues to deal with the deficit, they mean it and they’re ready to go to the brink over it,’’ says AlliantGroup National Managing Director Dean Zerbe, a Forbes contributor and former Republican Senate tax counsel.
That means no plan with tax increases can get a majority vote and the panel could end up deadlocked–unless a centrist Democrat is ready to sign on to a Republican plan for $1.5 trillion in cuts (including, likely, to Medicare and Social Security) without any tax increases. (On the Senate floor today, before voting on the deficit plan began, Senate Majority Leader Harry Reid, D-NV, vowed no deal would be reached without higher taxes included.)