Tear Down Those Tax “Shrines”

In the web-wide effort to identify winners and losers in the “fiscal cliff” battle (with the best answer, IMO, being “nobody knows” until we see how it affects the next, and massively larger, fight), one of the arguments we’ve heard cited most often is that George W. Bush was the big “winner” because his signature tax cuts finally became part of permanent law, not some temporary budget measure. This conceit, in fact, has become a big part of the progressive case that Obama got rolled. Like Republicans rationalizing votes for the tax bill, these progressives are pretending most Americans got the Bush tax cuts all over again, shiny new and fiscally lethal as they were the first time around. And both sides are using the word “enshrined” to refer to the magical effect the vote had on the tax cuts first enacted in 2001.

Sorry, I don’t buy it. Yes, the tax cuts expired on midnight of December 31, and you can easily make the argument Obama and Democrats didn’t sufficiently use that leverage in the negotiations (e.g., by getting an extension of the payroll tax cut, or some relief for the debt limit hostage the GOP is already tying up). But no, most Americans did not regard what happened as an action to restore, much less enshrine, tax cuts: it was, of course, a selectively applied tax increase, both before and after midnight. The “temporary” nature of the Bush cuts was never an advertised feature that Americans adjusted to and expected, but an inside-baseball trick by Republicans to make the cuts enactable through the budget process via reconciliation.

Sure, you can score Obama and congressional Democrats for a lack of courage in failing to take a unique opportunity to repeal the Bush tax cuts in their entirety. But let’s don’t pretend the scheduled expiration of these cuts changed their nature, other than in the consequences of complete inaction. Some of the people positively affected by the partial extension of the Bush tax cuts may credit one side or the other for making it happen. Most will not perceive anything at all as having happened, because it didn’t. That’s in sharp contrast to the situation with the payroll tax, where technically nothing happened (a scheduled expiration of a tax cut was allowed to occur), but many millions of Americans are waking up to the reality of significantly smaller paychecks that nobody much talked about during the gripping 24-7 national saga of the “fiscal cliff.”

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.