GOP offer too modest
Republicans on the Congressional debt committee are proposing a big cut in tax rates for the rich, but calling it a tax increase. To be fair, they are also talking about a cap on itemized deductions. But while the tax rate reductions are quite specific, the cap proposal appears intentionally vague.
They wonder why Democrats on the so-called Super Committee are not enthusiastically embracing this great concession offer.
We suppose the fact that Republicans are willing to put the term "tax revenue increase" on the table at all should be cause for some optimism, but certainly not a lot. Chances remain low that the bipartisan committee will meet its goal of a $1.2 trillion debt reduction plan over 10 years by the Nov. 23 deadline.
Republican Sen. Pat Toomey of Pennsylvania has floated the proposal for $400 billion in additional tax revenue. But $110 billion of that anticipated revenue is based on expectations of economic growth and improved compliance. Without the rosy assumptions, the boost in revenues calculates to be $290 billion, according to information released by Toomey's staff, a modest total given the size of the problem.
And it is arguably not a boost in revenues at all.
What Sen. Toomey is proposing is placing a cap on itemized deductions tied to adjusted gross income. Fewer deductions would mean higher tax revenues. Details are lacking.
But most of the proposal looks like a tax cut. It would reduce all six income tax rates by roughly 20 percent, with the top rate for the richest people falling from 35 percent to 28 percent.
Republicans are going to have to do better than that if they genuinely want a compromise. By all indications, the 99 percent are tired of the degree to which tax policy has benefited the most wealthy. Absent a deal, Democrats will be happy to run on a platform of asking the very well off to sacrifice more.
The best budget deal, for all, would be a genuine compromise on spending cuts and tax increases, one that demonstrates that at some level government can still work. That would send a positive message to the markets and Main Street and restore some of the confidence necessary for a genuine economic recovery.
"The revenue number is far short of what's needed to get a deal," Maya McGuineas, president of the non-partisan Committee for a Responsible Federal Budget, said of the GOP Super Committee proposal.
Yet it is an opening. Many Democrats have already conceded there must be significant cuts in spending, with entitlement programs on the table. Maybe our pessimism is misplaced - but probably not.
The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.
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