Debt Ceiling Deal and New Taxes

As progressives sift through the entrails of the budget deal, there is some guarded optimism on two grounds.

First, despite claims by House Speaker John Boehner, it turns out tax increases, or other revenue enhancements such as loophole closings, would count towards the $1.5 trillion dollars in mandatory deficit reduction to which Congress and President Obama agreed.

The details are mind-numbingly technical, but for fiscal masochists, the Center on Budget and Priorities has a good explanation.

Also, the Bush tax cuts automatically expire at the end of 2012. So all Congress and the president have to do is . . . nothing, and $830 billion more in revenue pours into the Treasury’s coffers, presumably reducing the need for spending cuts dollar for dollar. Actually, that figure just counts the money from extending the cuts for the wealthiest two percent. Congress would have to act affirmatively in order to prevent tax increases from hitting the bottom 98 percent, which it would surely do.

In Barack Obama’s Washington, where progressives grasp at straws, this passes for good news.

But here’s the bad news, in three parts.

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