THE PRICE TAG…. When it comes to the fight over tax policy, we’re used to dealing with a handful of price tags. The original Democratic plan — permanent cuts for the middle-class; Clinton-era top rates for the wealthy — was projected to cost $3.2 trillion over the next decade. The Republican plan — Bush-era rates for everyone, indefinitely — came in at $4 trillion. (The Schumer compromise’s price tag was in between the two, at $3.6 trillion.)
But at this point, it looks like all of these plans are effectively off the table. Republicans killed the Democratic plan in the Senate, and the GOP proposal couldn’t get support from the House, Senate, or White House. By all indications, we’re talking about a two-year extension of the status quo.
And what would that cost? To hear Republicans tell it, nothing, since it’s just keeping things where they already are. But the GOP isn’t especially good at arithmetic. The New York Times‘ David Leonhardt noted the actual number over the weekend.
$60 Billion: The approximate amount that extending the Bush tax cuts on income above $250,000 a year — which Congress seems on the verge of doing — will cost a year, in inflation-adjusted terms.
Now, Leonhardt goes on to raise several important observations about how that money could be put to better use, and his piece is worth taking a look at. Also note, if there is a deal, the final price tag of the agreement will be well over this figure, because of the (comparably minor) costs associated with extending unemployment benefits.
That said, this $60 billion figure is the number we’re dealing with in the tax fight. Just FYI.
Update: A reader encouraged me to clarify this, so to re-emphasize, it’s $60 billion per year. What’s more, it’s not the cost of the total tax package, only the extra cost of what Republicans want (breaks for those above $250k), over and above what Democrats want (breaks for those below $250k).