According to the AP's Ben Feller, "Obama will push for higher taxes on the wealthy as a way to shrinking a choking debt and to steer money toward the programs he wants."
This seems about as safe a prediction as one can make about the political near term. If the president was clear about anything at all in his winning campaign, it was his intention to "ask" the wealthy to contribute a little more. He did not, of course, go on to explain what he intended to do if those who were so asked told him to take a hike.
The pressure will be on for higher taxes. Now. Spending cuts, if any, will come along later—if ever.
Since the president won the election, he is on solid ground in pushing for tax increases. He will be doing what he said he would do and that is as it should be. But there may be opportunity here for those who wish more rationality in our Byzantine system of taxation which is the product of years and years of dedicated log rolling and deal making. If we are looking for fairness and efficiency there are opportunities beyond merely jacking up the rates on high incomes and capital gains.
Among the possibilities:
A phasing out of the mortgage interest deduction. And why not? It incentivizes the accumulation of housing debt and we all know how well that worked out. And why should renters subsidize homeowners? The resistance will be fierce but what's a second term for, if not to do the tough things?
Likewise, a gradual repeal of the deduction for state and local taxes. Why should taxpayers in frugal states subsidize the profligates, like Illinois which, by the way, will likely be asking for a federal bailout of its broke pension system sometime during its favorite son's second term?
Count premiums for employer provided health insurance as income.
Cap charitable deductions.
And, from the Glenn Reynolds (aka Instapundit):
Reinstate the 20% excise tax on the gross receipts of movie theaters and expand it to cover DVD sales, movie downloads, and pay-per-view. If there are any fat cats who do not need special tax treatment, who should be "asked to contribute a little more," they live and work in Hollywood.
This seems like a reasonable, morning-after agenda. Does anyone, even in Washington, believe that the tax system is reasonable or fair or is an incentive for economic growth? Does anyone believe that anything other than the increased rates on higher incomes has a chance of making it through the special interest minefields of Washington?
Nah. Too much change to hope for.