Over email, Bruce Bartlett observes:
According to press reports, in his budget Obama will allow many of the Bush tax cuts to expire next year. Republicans charge that this constitutes the largest tax increase in history. I think it is important to remember that the reason the Bush tax cuts are expiring is because that’s the way Republicans wrote the legislation. If anyone is responsible for increasing taxes, they are.
I believe that Republicans could have had permanent tax cuts which would have been better for the economy in the first place. But they would have had to negotiate with the Democrats. They preferred not to do so, believing that they could just extend their temporary tax cuts forever. I warned for years that this was a stupid strategy, but was ignored. Now the chickens have come home to roost.
Indeed. Recall that the purpose of writing the sunsets into law was to bring the “ten-year cost” of the cuts down. Basically, they wrote a tax cut bill that was too expensive to pass. Then instead of actually moderating the scale of their agenda, they made the cost appear smaller by arbitrarily phasing the cuts out under the theory that they could then turn around and accuse adversaries of implementing a huge tax increase if they refused to make the cuts permanent. What I guess they didn’t count on in this game of legislative chicken was that huge electoral gains for the Democrats in 2006 and 2008 have now made it easy to let the law operate as written and phase the cuts out. In an alternate reality, the Bush administration could have struck a deal with Democratic leaders for a smaller, less regressive, but permanent tax cut whose actual cost would have been in the neighborhood of the fake cost of the Bush tax cuts. That wouldn’t have made me smile, but it would have been better in line with supply-side theory (whose logic requires the tax cuts to be permanent) and better advanced long-term conservative policy goals. Unfortunately for them — but at the end of the day, also unfortunately for the country — many Republican political leaders have chosen to take advice primarily from stupid people. And a certain number of other smart people have been more interested in being team players than in telling said political leaders the truth.