In a big development last week, the White House short-circuited Harry Reid’s efforts to put together a tax extender deal with Republicans that included his pet break for state sales taxes but didn’t include the low-income EITC or child tax credit. A lot of heat has been aimed at Reid for this strategy (which he defended on grounds that a later deal to save the EITC and child care credit could be put together in tandem with the corporate tax “reform” GOPer want to pursue in 2015). But less attention was paid to the categorical refusal of Republicans to cut po’ folks in on the tax bonanza. Jonathan Chait reminds us that a fateful drift towards favoring higher taxes on the poor has been taking over the GOP for a good while:
Traditionally, the two parties have agreed to extend all the tax cuts together at once. It was not exactly what either party wanted — Democrats didn’t like bleeding revenue from the Treasury every year, and Republicans didn’t like extending tax cuts to low-income workers — but the compromise suited both sides well enough that nobody cared to blow it up. Now it’s getting blown up.
Brian Faler and Rachel Bade report that Obama’s immigration relief plan is the proximate cause. Newly legalized workers will pay taxes, and thus be eligible for tax breaks. “If Republicans agreed to extend [those tax breaks] now,” Faler and Bade report, “it would look like they were voting to expand government benefits to illegal immigrants.”
But that’s just an excuse that obscures a deeper problem:
Large elements of the conservative party have spent the Obama years simmering with rage at the insufficiently high tax rates paid by low-income workers. Mitt Romney’s candid rant against the 47% percent who (allegedly) pay no taxes merely recycled a right-wing meme. Since Romney’s defeat, some Republicans have gently urged their party to ease up of their campaign to force low-income workers to pay more taxes. But adding the cultural-legal panic to the preexisting class-war panic was apparently enough to turn the GOP’s grudging acceptance of the low-income tax breaks into full-scale opposition.
It’s bad enough that “lucky duckies” would continue to “avoid” net federal income taxes. That they would include even more of those people via “amnesty” (an unlikely contingency but one that could not entirely be ruled out) was a compassionate bridge too far.