FEDERAL REVENUE ISSUE NOT DEAD

PROGRESSIVES TAKE HEART: WE CAN ELIMINATE THE BUSH TAX CUTS!

At the end of April we wrote in a post, DEFICIT SOLVED, that 75% of the federal deficit could be eliminated by simply letting the Bush Tax Cuts expire (including the middle class tax cuts) at the end of 2012 — as the legislation originally intended.

That idea seems even more relevant today as we wrangle with GOP obstinacy and refusal to consider any attempt to bring in more revenue to the federal government. So, we went back and re-read that post and concluded that progressives can take solace in knowing that even though we’ll have to swallow the current debt-crisis solution with no new taxes: we can win on the tax issue in the end — end of 2012, that is!

HERE’S A RECAP:
We started by assuming that Obama will win a second term — if a Republican wins the White House then look for permanent deficits into the future, and/or government slashed to the bare bones. But if Obama is reelected then chances are more likely than not that the House and Senate will be Republican.

Divided government would reign.

Obama won’t break his campaign promise to keep the tax cuts for the middle class in a second term, and the Republicans won’t sign on to any deal that just raises taxes on the rich.

Looks like STALEMATE, doesn’t it? Maybe not.

Since the Republicans have vowed to pass into law a bill that would make all the Bush tax breaks permanent — and here’s the good part! — when Obama is presented with such a bill he can refuse to sign it because it has tax breaks for the wealthy it. The president will then have political cover for letting all the tax breaks expire as they’re set to do at the end of 2012!

Onerous Bush tax cuts disappear and 75% of the deficit wiped out = Problem solved!