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To Give In, or Not to Give In: That Is Not the Question

1:31 PM, Dec 11, 2012 • By JEFFREY H. ANDERSON
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There is a lot of talk about whether Republicans should "give in" on raising taxes on the top 2 percent of income-earners.  But the question isn't whether Republicans should "give in," but how they should react to a situation in which tax rates on that portion of Americans are going to rise whether Republicans want them to rise or not.  If no deal is struck to keep us from going over the inaptly named "fiscal cliff"—only in Washington could a step designed to slow the rate of increase of our $16,000,000,000,000 debt be coined a "fiscal cliff"—taxes on the 2 percent will rise automatically (along with everyone else's taxes).  So the notion that Republicans can keep tax rates on the top 2 percent from rising rests on the belief that they can somehow convince President Obama to agree to stop them from rising. They might as well try to convince him to repeal Obamacare.

Debt Deal

So, if taxes on the top 2 percent of income-earners are going to rise regardless of Republicans' rightful opposition to that notion, what should the GOP do?

House Republicans would be well served to pass legislation to stop tax rates from rising on the other 98 percent of Americans, coupled with some spending cuts (whether to entitlements or otherwise) to offset the projected revenue loss. (They should also add a requirement that if the Senate does not pass a budget in a given year, then spending cannot rise from the prior year's levels.)  Then taxes on the top 2 percent will go up on January 1—as they will in any event—but Obama will first have to decide whether he wants to sign the GOP's bill to keep taxes on the 98 percent from going up too. 

If Obama refuses to sign such legislation (or if the Democrats in the Senate refuse to pass it and send it to Obama), it would be awfully hard for the president to make that result look like the GOP was protecting the "rich" (given that the "rich's" taxes would go up)—as he will do if Republicans don't pass such legislation. If Obama doesn't take the deal, it would be pretty clear that he cares more about keeping spending high (or "protecting entitlements") than about keeping middle-class taxes low, while the GOP will have passed legislation to prevent a middle-class tax hike.  If Obama does take the deal, the GOP will at least look like it led and can claim victory, and it will at least have gotten some spending cuts to something other than defense.

In taking this course of action, the GOP wouldn't be "giving in," and it wouldn't be voting to raise anyone's taxes.  It would be dealing with the political reality of the moment, keeping an inevitable tax hike on some Americans from extending to all Americans, and preventing a scenario in which Obama celebrates the New Year by sending proposed legislation to the House that would cut 98 percent of Americans' taxes—thereby enabling Barack Obama, shameless spendthrift and tax-hiker, to claim the mantle of tax-cutter.

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