A common saying (sometimes attributed to Samuel Francis, but I first heard it before he is supposed to have said it) inside the DC Beltway, at least among fiscal conservatives, is that America has two political parties: the Evil Party and the Stupid Party. It appears to the Antiplanner that the Stupid Party has once again found itself in a no-win situation over the co-called fiscal cliff.
Republicans have promised no increase in taxes, while Democrats want to increase taxes only on the rich–those who earn more than $250,000 a year. The latest Obama plan projects that such a tax increase will yield about $140 billion a year over the next ten years. Since fewer than 3 million tax filers earn more than $250,000 a year, that works out to an average $50,000 or so increase in annual taxes per person.
The idea of creating a fiscal cliff–a deadline by which Congress must reduce deficits or face automatic tax increases and spending cuts–may have sounded great to fiscal conservatives when it was first proposed. It doesn’t look so good now. If Republicans agree to Obama’s tax increase, they will be accused of breaking their promises. If they allow the country to go over the cliff, Democrats will respond next year with a middle-class tax cut that Republicans will find difficult to reject, else they’ll be blamed by all taxpayers, not just the wealthy ones, for raising rates. Either way, Dems win, Reps lose.
