Saturday, December 2, 2017

Schrodingers Tax Hike: Paul Krugman

Schroedinger's Tax Hike

paul krugman

Yes, I know that's supposed to be an umlaut in the title. I just can't persuade WordPress to do it.

So: There are many amazing things about the Republican tax pitch, where by "amazing" I mean terrible. But possibly the most amazing of all is the attempt to have it both ways on the question of middle-class taxes.

The Senate bill, as written, tries to be long-run deficit-neutral — allowing use of the Byrd rule to bypass a filibuster — by offsetting huge corporate tax cuts with higher taxes on individuals, so that by 2027 half the population, and most of the middle-class, would see taxes go up. But those tax hikes are initially offset by a variety of temporary tax breaks.

Now, Republicans are arguing that those tax breaks won't actually be temporary, that future Congresses will extend them. But they also need to assume that those tax breaks really will expire in order to meet their budget numbers. So the temporary tax breaks need, for political purposes, to be both alive and dead.

If they succeed in this exercise in quantum budgeting, we'll eventually open the box, collapsing the wave function, and discover whether the budget promise or the tax claim was a lie. But for now, they want to hold it all in suspension. Once upon a time you wouldn't have imagined they could get away with it. Now …

John Case
Harpers Ferry, WV

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