Tax Cut's That Don't Excite the GOP

    It's been interesting that Norquist gave his blessing to allowing the payroll tax holiday to expire. At this point it looks like the may get a deal but even if so only after some struggle where the GOP tried to add all kinds of riders-the XL pipeline, etc.-and even now there's the debate about "how to pay for them" that is unusual for the GOP. They normally argue tax cuts are good in and of themselves and why should they be paid for? If they aren't payed for that only starves the beast.

    Then too they insisted that next year can stay one more year at 4.3% of payroll taxes but not drop further as Obama proposed to 3.1%. What we're learning is that they don't love tax cuts per se only certain types.

   Norquist's agnosticism about letting this holiday expire is interesting. He says he doesn't see why allowing a temporary tax cut to be permanent is a tax hike. Actually that's not an unreasonable position. However what strikes me  is what he said during the debate about whether or not to extend the Bush tax cuts. In that case even though those too were temporary and were supposed to have expired this year, allowing them to was called by him and the rest of the conservatives a tax hike.

   So what is the difference? After seeing the awful tax plans of Perry, Cain and now Gingrich it's clear. Tax cuts for the rich are good in and of themselves and of course can be assumed to "trickle down", that is supply side economics.

  However demand side tax cuts-which is what tax cuts for the nonrich are need to be paid for. Cain had a plan where most Americans would actually see their taxes go up. Gingrich's plan would cost more than the entire supposed Meidcare shortfall yet there's no talk of how to pay for it.

  Also you have the oft repeated canard that "50% of Americans don't pay tax" which is patently false when you factor in payroll and state consumption and other state taxes.

  While the conservatives love to act as if it's nefarious to consider the distributional effects of various tax policies-all that should matter is growth-in reality they too make choices that are far from unbiased with regard to distribution.