Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Tuesday, August 02, 2011 :::

It's possible that if I read up a bit on the new budget deal I would figure this out myself, but, while it's been spun as having no tax hikes, it seems to me that it dramatically increases the likelihood that taxes in 2013 will go up to 2000 levels. Can someone paying closer attention than I am comment on that?

::: posted by dWj at 11:06 AM

Based on what Hennessey said, it's maybe a little more likely, but not dramatically more likely.

In particular, the baseline against which deficit cuts out of the committee are to be measured is current law. So if they propose that the top marginal tax rate go to 39.6% (if I remember the Clinton rates correctly), they don't gain anything from that. Tax hikes that aren't part of current law do count, so if they reduce the depreciable life of a corporate jet from 7 years back to 5, they can prevent however much in spending cuts would offset that tax hike. It might not pay for an entire cowboy poetry festival, but it should pay for the drinks, assuming the cowboys are teetotalers.

The deal does create a point of order in the Senate that would prevent future tax rates from being lowered to current rates unless the tax cuts are paid for. This point of order can be waived by a vote of sixty Senators. I thought that was pretty funny.
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Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

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