The most fiscally irresponsible thing we do in Washington

October 18, 2012

Pretty much everything you have heard about taxes in this entire election starts from the same premise: It assumes the Bush tax cuts don't cost any money.

Former President George Bush. / Saul Loeb/AFP/Getty

Remember: The Bush tax cuts expire at the end of this year. All of them. If we're going to extend them, it requires new legislation. The Joint Tax Committee will tell Congress, correctly, that that legislation will cost trillions of dollars. But pretty much everyone in Washington has agreed to pretend that that's not the case. They've all decided to treat the budget as if the Bush tax cuts have already been made permanent.

This is true for everything Obama says. When you hear him talk about his intention to raise a trillion dollars by ending the Bush tax cuts for the rich? That's a calculation that assumes the Bush tax cuts have already been made permanent. If you don't assume that, then Obama's plan isn't a tax increase of a trillion dollars. It's a tax cut of trillions of dollars.

This is also true for everything Romney says. The arguments about his $5 trillion tax cut and whether or not he'll pay for it are all assuming the Bush tax cuts have already been made permanent. But if Romney has to start by making the Bush tax cuts permanent, he'll be signing trillions of dollars of tax cuts into law before he even gets to his own tax cuts.

Proponents of this kind of thinking argue that it's silly and abstract to say that keeping tax rates where they are is raising taxes. That's fine. They're kind of right about that. But it's crucial to say that passing legislation to keep taxes where they are will cost money. Lots of money. Tons of money. And the most fiscally irresponsible thing we do in Washington is pretend otherwise.

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Suzy Khimm · October 18, 2012