Elections Have Consequences, Exhibit 1: GOP Wants Higher Revenues

     A good deal of this is no doubt hand waving and spin. Still, the terms of this debate are different than they were last Summer during debt ceiling chicken. Whether or not the GOP is really prepared to walk the walk they are talking a different game now:

     "Republican lawmakers are increasingly abandoning Grover Norquist’s no-taxes pledge and declaring a willingness to raise tax revenues as part of a deal to avoid the severe austerity measures set to take effect in January."

      "On the Sunday talk shows, Sens. John McCain (R-AZ) and Lindsey Graham (R-SC) called for raising revenues by scaling back tax deductions and credits."

      “I would be very much opposed to raising tax rates, but I do believe we can close a lot of loopholes,” McCain said on “Fox News Sunday.” He said that could be achieved by imposing “a limit on the amount of deduction on charitable giving, a limit on the amount you can take on your home loan mortgage deduction.”

      Graham, who has previously spoken out against Norquist’s pledge, reiterated his position on ABC’s “This Week,” arguing that he will support higher taxes if Democrats agree to meaningful entitlement cuts.

     “I’m willing to generate revenue. It’s fair to ask my party to put revenue on the table. We’re below historic averages,” he said. “I will not raise tax rates to do it. I will cap deductions. If you cap deductions around the $30,000, $40,000 range, you can raise $1 trillion in revenue, and the people who lose their deductions are the upper-income Americans.”

     “When you’re $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece, and Republicans should put revenue on the table. We’re this far in debt. We don’t generate enough revenue,” the senator said. “I agree with Grover, we shouldn’t raise rates, but I think Grover is wrong when it comes to we can’t cap deductions and buy down debt.”

       http://tpmdc.talkingpointsmemo.com/2012/11/chambliss-mccain-graham-tax-revenues.php?ref=fpnewsfeed

       Obviously we don't want to fool ourselves. The GOP is changing its tone. It's position hasn't necessarily changed much. There are less GOPers breaking bread with Norquist-he personally is taking a hit and it's possible that in the future his own personal influence may be less as he's becoming a lightening rod.

       The GOP is still sticking to the idea that this can be done purely by closing loopholes and limiting credits and deductions.

        As to this talk about the Democrats having to come forward on entitlement reform this is a telling debate as well. Where we are is that the GOP wants entitlement reform though they don't necessarily want to be the ones to spell it out. They want Obama to go first, arguing that, after all, he has the mandate.

       http://diaryofarepublicanhater.blogspot.com/2012/11/what-does-gop-need-to-make-deal.html

      "Despite their softer rhetoric since losing the election, House Republicans publicly remain reluctant to raise new tax revenues if they aren’t used to lower rates. But on Sunday, Rep. Peter King (R-NY) signaled willingness to break from that by attacking the relevance of Norquist’s pledge on NBC’s “Meet The Press.”

      “I agree entirely with Saxby Chambliss,” King said. “A pledge you signed 20 years ago, 18 years ago, is for that Congress. For instance, if I were in Congress in 1941, I would have supported a declaration of war against Japan. I’m not going to attack Japan today.”

    “The world has changed and the economic situation is different. Ronald Reagan and Tip O’Neill realized that in the 1980s. I think everything should be on the table,” he said. “I, myself, am opposed to tax increases. The fact is the speaker and the majority leader and the president are gonna be in a room, trying to find the best package. I’m not gonna prejudge it. And I’m just saying we should not be taking iron clad positions. I have faith in John Boehner to put together a good package.”

       Some of this comes down to the GOP having to save face as well. They know Kristol was right when he said that the GOP will have to work with the President a lot more during this second term. They understand that at least on the fiscal cliff and immigration reform they have to act like they want to work with him and may have to do so in fact quite a bit. But they also want to be able to claim that they've been able to demand a few things.

       That one major motivation for the GOP is how to capitulate while seeming to save face is a proposal that would not have a raise in the top rate to 39.6% but would actually end all lower marginal tax rates for Americans with income above a certain level-$400,000 has been mentioned a lot.

        Essentially someone with income over $400,000 would not benefit from the lower marginal rates at income under $400,000 but what pay the top 35% income rate on all of their income. This would according to some experts raise their effective rates to 41%.

        No matter what, it's something to hear Lindsay Graham admit that revenue is low by historical levels. Cautious optimism remains the watchword.