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Who Wants to Be the One to Sell Out on Taxes?

By Joseph Lawler on 6.23.11 @ 5:14PM

Now that the debt ceiling talks have reached the point where Democrats are demanding tax increases, Eric Cantor and Jon Kyl are claiming that tax hikes are above their paygrade, withdrawing from the bipartisan negotiations led by Joe Biden, and leaving the matter up to John Boehner and the president. From Talking Points Memo:

"We've reached the point where the dynamic needs to change,'' Cantor said. "It is up to the president to come in and talk to the speaker. We've reached the end of this phase. Now is the time for these talks to go into abeyance."

After the Biden-led talks reportedly reached a rough outline of agreement on spending cuts, tax cuts were inevitably going to be the sticking point for negotiations. Of course Cantor doesn't want to be the one held responsible for caving on tax increases. In recent days, Boehner and McConnell have been increasingly vocal about their opposition to any tax hikes. If anyone has to compromise with Democrats, Cantor would prefer that it were Boehner.

Cantor's exit increases the possibility that Boehner does hammer out a compromise with Obama, one that includes ending various tax breaks. In that case, Boehner gets the deal done, but loses standing among conservatives -- possibly to Cantor's benefit.

By removing himself from the talks, though, Cantor may at the same time have improved the GOP's leverage. Boehner has been adamant in his opposition to raising taxes, and now he has the last word. He can control the timeline of the negotiations, and he has a plausible explanation for making huge demands on Obama -- namely, that he's afraid for his job if he's the one to sell out the party on taxes.

View all comments (17) | Leave a comment

RT| 6.23.11 @ 5:31PM

The CBO is the problem. They "score" tax increases as adding to revenue and tax cuts as hurting revenue, completely ignoring history and common sense.

Boehner needs to stand firm and say NO to any job killing tax increases. In fact he should insist on tax cuts AND spending cuts. Then the Dems will be the ones to walk out and the ones to take the heat when we hit the debt ceiling and hit a wall of financial pain.

If Boehner doesn't have the guts to stand toe-to-toe with the Democrats then President Palin will do it and Boehner will find himself filling out a job application at the local tanning salon.

DRed| 6.23.11 @ 6:03PM

It's total common sense. You reduce the tax rate, and thus collect less money, and therefore you gain revenue.

Look, I understand what you're going to say. But historically, reducing taxes only raises revenue per capita when tax rates were much, much higher than they are now.

Teflon93| 6.23.11 @ 6:07PM

Except that's not true. Look at the projected vs actual revenues, which continue to run under CBO projections. Veronique de Rugy has covered this extensively.

Raising marginal tax rates always yields less revenue than projected for the simple reason that it creates incentives to avoid paying the tax in the first place. This country was founded in large part due to the tax avoidance scheme we call the Boston Tea Party---as was the coffee industry.

DRed| 6.23.11 @ 6:35PM

I'm not concerned with projected revenue. I'm talking about raising real revenue. If we raise taxes, and raise less money than projected by the CBO, but more than we would have taken in then if we'd cut taxes even further, then that would still reduce the deficit more effectively, no? Or am I failing to understand your argument? I'll try to find some of de Rugy's work.

Truth to Power| 6.23.11 @ 7:07PM

Get used to the idea that Republicans will not be tax collectors for Democrats. You have come to your unsustainable end. Live with it. Lets see the plan from Obama or really his brains, Reid and Pelosi. I won't be holding my breath. They will all demagogue until the election and then they will be gone. You are not a serious person, DRed. No talking point spouting person ever could be.

Clint| 6.23.11 @ 7:44PM

"At higher and higher rates people are less inclined to earn money at the margin and more inclined to take countermeasures. Eventually a point is reached when a marginal increase in tax rates produces less aggregate tax revenue than at the lower rate that existed prior to the increase. This point is the apex of the Laffer Curve and is depicted on the graph at between 35% and 40%. Economists debate the precise point at which tax revenues begin to decline, but there is no serious disagreement about the overall shape of the curve. High marginal tax rates are not only unproductive but counterproductive."

LC JB| 6.24.11 @ 1:17PM

Agreed fully. It will be a real test of the Great 2010 Electoral Massacre seeing if the repubs in congress sell us out. Our side MUST be willing to slug it out and walking out, like this time to the Dems. My fear is that they will be afraid of being called reckless, irresponsible and the inevitable litany of demagoguery from the left media. Nothing Boehner has done so far has impressed me as showing he has the resolve to ignore the media and do the job he was given.

Michael L. Hauschild| 6.23.11 @ 5:48PM

My trust of Boehner is inversely proportional to the melanin in his epidermis, and he my friends is one tan bastard.

lydia| 6.24.11 @ 8:57AM

The answer is Boehner will agree to tax increases. He'll do it because he is a weak little Beltway apparatchik who just wants David Gregory to love him a little bit.
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Teflon93| 6.23.11 @ 6:08PM

The answer is Boehner will agree to tax increases. He'll do it because he is a weak little Beltway apparatchik who just wants David Gregory to love him a little bit.

Mike| 6.23.11 @ 6:31PM

Boehner, instead of being a total idiot, may be more like Reagan than I have given him credit for being. Maybe he is able to compromise. Maybe he is able to be pragmatic and maybe he knows we need revenue and cuts in order to deal with our financial problems. Maybe. I hope so, but I'm not holding my breath.

Truth to Power| 6.23.11 @ 7:12PM

Pragmatic means suicide for the Republican leadership and then suicide for the country. This could have been accomplished Mike-style before the 2010 elections but the Democratic leadership including that idiot of a President were too busy lying. Now they want to demagogue. The bunch of them needs to be thrown out. They are totally unsustainable and incapable of leadership.

Ryan Ellis| 6.23.11 @ 6:45PM

Boehner will not agree to tax hikes for two reasons: first, he is opposed to them. Second, virtually every House Republican is opposed to them. He won't and can't do what you're speculating here.