GOP mulls a tax increase
Republicans on the supercommittee suggested a compromise plan that would raise $250 billion in new revenue over the next decade by limiting deductions for upper-income households.
House Republican leaders were trying this week to convince conservative lawmakers to accept a modest tax increase, as the congressional supercommittee raced to cobble together a deficit-reduction deal before its looming deadline. The bipartisan group must identify at least $1.2 trillion in savings by Nov. 23, or face triggering an automatic $1.2 trillion in cuts in domestic and defense spending. Republicans on the panel, who had opposed tax increases as part of a deficit-reduction deal, proposed a compromise plan this week that would raise $250 billion in new revenue over the next decade by limiting deductions for upper-income households. In return, Democrats would accept more than $1 trillion in spending cuts, and agree to lock in the Bush tax cuts beyond 2012, when they are due to expire. For the deal to be approved, Republican leaders will have to suppress a revolt from anti-tax conservatives in the House, while Democrats will have to settle for much less than the $800 billion in new taxes they proposed.
At last, Grover Norquist’s spell has been broken, said The New York Times in an editorial. The “brass-knuckled” president of Americans for Tax Reform wields enormous power in Washington, thanks to the “simplistic pledge” he extracts from nearly all Republican lawmakers to “never, ever raise taxes.” But some members of the GOP are finally acknowledging that the deficit cannot be closed without tax increases. “The only allegiance they owe is to their constituents, not to Mr. Norquist.”
But the pledge exists for a reason, said Michael Tanner in NationalReview.com. Everyone knows if you give Democrats an inch on tax cuts, they’ll take a mile—and then spend whatever new revenues are raised. Besides, there’s no need for compromise. If the supercommittee fails, there’s a “perfectly adequate outcome” in the $1.2 trillion in cuts guaranteed by the trigger mechanism. If failure means “more budget cuts and less taxes,” then “bring it on.”
But now that both parties are retreating from their “hard-line positions,” said Jay Newton-Small in Time.com, failure isn’t inevitable. To forge something both parties can swallow, lawmakers may resort to the “classic Washington maneuver” of agreeing on a framework for spending cuts and tax reform, then punting the details down the road. With the supercommittee running out of time, the odds of compromise are “edging up from zero.”