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CNBNews Op-Ed: GOP Abandons Good Policy in Fiscal Cliff Deal

 

By Jedediah Bila

By now you’ve heard that the fiscal cliff deal passed. Does it address the real fiscal cliff we’re standing on, also known as our $16.3 T debt? Not in the least. Does it dismantle the divisive class-warfare tactics that are destroying our country? No. In fact, it supports Obama’s “fair share” campaign promise to hike taxes on “the rich” and makes some Republicans–I’m looking at you, Paul Ryan–look awfully silly for spending months campaigning against class warfare only to endorse it in the name of compromise. Grover Norquist even embarrassed himself by labeling the deal a tax-cutter because the Bush tax cuts had expired at midnight the night before.

You know, Republicans, if you spent half as much time marketing good policy as you do bending over backwards to please your ideological opponents, we might actually have a deal worth talking about.

In addition to the basics, there are some other interesting facts to note about this deal.

ABC News reports:

But it also includes these:

  • $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States.  Producers can expense up to $15 million of costs for their projects.
  • $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
  • $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.
  • $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
  • $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
  • $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

*Note the price tags above reflect estimated forgone tax revenue if current credits – which have been due to expire – are extended for one year as included in the Senate bill, per Joint Committee on Taxation.

Jim Pethokoukis writes:

What will Americans pay in taxes this year vs. last year in light of the fiscal cliff deal? Well, let’s run the numbers (with some help from JPMorgan):

– Payroll tax hike: $125 billion

– Income tax hike and the phaseout of exemptions: $35-50 billion

– Investment tax hike: $5 billion

– PPACA healthcare taxes: $38 billion

So that works out to roughly $220 billion, or 1.2% of GDP. It’s a deal that, as The Washington Post puts it, ”takes money out of the hands of many Americans, sucking it out of the economy and slowing economic activity.”

Obama made it clear last night that he has no interest in negotiating when it comes to the debt ceiling. He has also made it clear that this is the start of his tax-hike demands, not the end.

To those who believe that current GOP leadership–you know, the folks who pushed this horrific deal–will fight tooth and nail to oppose the debt ceiling hike and dig in their heels for real spending cuts (no baseline budgeting nonsense), I have a bridge to sell you. It sits above youth-restoring water and is inhabited by wish-granting unicorns.

Also, what happens when Obama asks for round two of tax hikes on the rich? Will the GOP suddenly decide they oppose class warfare again after backing it in this deal? Do tell me how that makes sense.

I understand the value of cooperation, but when you compromise all of your key principles and fight for none of the things you’ve claimed to care about, it’s safe to say you’ve lost.



 

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