Plan B Math = Obama’s $3 Trillion Tax Cut
Today, the House is scheduled to vote on the Plan B Tax Increase. Roll Call reports that despite the outward displays of optimism, “Speaker John A. Boehner of Ohio struggled Wednesday to find the votes for anything that would prevent the country from going over the fiscal cliff.” Although that’s not exactly true – Republicans passed H.R.8 on August 1 – there is certainly a lot of ridiculousness surrounding Plan B that is sure to make conservatives nervous.
Some right-leaning pundits are describing the vote today as a $4.1 trillion tax cut, when calculated over the ten-year budget window. The logic goes something like this: if we are going to experience a $4.6 trillion tax hike on January 1, then only allowing a $500 billion tax hike means we are cutting taxes by $4.1 trillion. All those figures are over the ten-year window, of course.
There is just one small problem. Preventing a tax increase is not the same as cutting taxes. President Obama embraced that logic during his reelection campaign and he was rightly rebuked for his intellectual dishonesty then.
For fun, let’s apply this intellectually dishonest approach to President Obama’s initial offer, which was outrageous. Instead of being a $1.6 trillion tax hike, as Republicans in Congress decried, it would be a $3 trillion tax cut. Why? Well, if taxes were scheduled to go up by $4.6 trillion on January 1, then allowing only a $1.6 trillion tax hike means he wanted to cut taxes by $3 trillion.
See how that works?
As Heritage’s Curtis Dubay explains, it’s all a baseline game:
[A] current policy baseline would not score stopping Taxmageddon as a tax cut that increases the deficit. It would continue to project revenue of $2.445 trillion once Congress prevented Taxmageddon, because it would have previously assumed that Congress was going to extend or (in the case of the Obamacare tax increases) stop the implementation of the policies that comprise Taxmageddon.
Since it is not a tax cut, and therefore does not add to the deficit, neither spending reductions nor tax increases are necessary to offset, or pay for, stopping Taxmageddon when using a more rational, current policy baseline.
Americans deserve an honest debate. They also deserve at least one political party that stands steadfast in its opposition to taking any more money from the private sector to give to the government sector.