This Is Supercommittee Republicans' Idea of a Tax Increase

In this morning's article on the supercommittee's widely expected failure to come to an agreement to reduce the deficit, I laid blame at the feet of Republicans, who rejected what struck me as a fair, even right-of-center, proposal from Democrats to cut the deficit by $3 trillion, with $1.2 trillion in new tax revenue and $500 billion in Social Security and health care spending cuts.

The pushback to this piece has focused on a plan by Sen. Pat Toomey of Pennsylvania to raise taxes by as much as $300 billion. Robert Samuelson writes:

Contrary to much press coverage, the committee's Republicans opened the door to compromise by abandoning -- as they should have -- opposition to tax increases. Sen. Pat Toomey of Pennsylvania proposed a tax "reform" that would raise income taxes by $250 billion over a decade. First, he would impose across-the-board reductions of most itemized deductions and use the resulting revenue gains to cut all tax rates. Next, he would adjust the rates for the top two brackets so that they'd be high enough to produce the $250 billion. All the tax increase would fall on people in the top brackets.

Toomey's plan is a reincarnation of this plan, drawn up by former Reagan adviser Martin Feldstein and Maya MacGuineas from the Committee for a Responsible Federal Budget, to limit deductions for richer households. (Quick tax explainer: You can either raise tax revenue with higher rates or lower deductions. Most economists agree that we should focus on stripping out deductions before adding higher marginal rates.) But whereas Feldstein and MacGuineas raised an additional $250 billion in one year, Toomey's would raise $250 billion over ten years. He offsets the vast majority of the tax increase by reducing tax rates by a fifth for rich families.

So, did Republicans propose a tax increase? Yes, they did. They proposed a tax increase so small that it amounts to pennies on a plan drawn up by an former adviser to Reagan and a former adviser to John McCain.

There are plenty of conservatives with smart ideas about fixing our tax code. Their ideas didn't make it into the supercommittee.

>

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In