Paul Ryan and Patty Murray think they can raise revenues without raising taxes

December 4, 2013

The budget deal that Rep. Paul Ryan and Sen. Patty Murray are discussing includes new revenue. But it excludes new taxes.


Rep. Paul Ryan and Sen. Patty Murray, revenue-raisers or spending-cutters? (Jacquelyn Martin/AP)

They're accomplishing this amazing feat of budgetary semantics by selling off government assets, auctioning spectrum and tweaking federal employee pensions. The money these policies raise can be categorized as revenues. But none of these policies can be even loosely described as a tax increase.

That means Democrats can say the deal wasn't all spending cuts, Republicans can say the deal didn't include any tax increases, and angels can blow their trumpets, for lo, a budget agreement might finally heal this ravaged land.

This is evidence, in case any more of it was needed, that Washington's obsession with whether you characterize a particular policy as "cutting spending" or "raising revenues" needs to end.

How you feel about increasing the tax rate on capital gains income should have literally nothing to do with how you feel about auctioning off wireless spectrum. One is a question about incentives for investment. The other is a question about the best way to allocate a scarce resource that could decide the future of wireless technology.

Similarly, how you feel about increasing the tax rate on individual income should have literally nothing to do with how you feel about giving people money to buy bigger homes. One is a question about the incentive to work. The other is a question about housing policy.

Whether you want to reduce the total money that goes to charity or reduce the total money that goes to defense spending is an interesting, hard question that drills down to core beliefs about what government should and shouldn't do. But in contemporary American politics, it's actually a very easy question: Do you support higher taxes or don't you?

Instead of working through these individual policy questions in budget deals, both parties increasingly organize their opinions based on an abstract preference for higher or lower revenues. How those revenues or spending cuts are actually attained is a second-order concern, which is why, today, sequestration is chopping away at the budget. It's an insane way to try and set national priorities.

Which doesn't mean Ryan and Murray don't somehow have to accommodate it. American politics increasingly organizes itself around the question of tax increases, and the Republican and the Democrat have to get their deal through the political system. But it's going to be a much worse deal than would be possible in a world where the two parties were solely concerned with what a budget deal actually does rather than how the money it raises can be described.

Related: 

The reality of tax reform: Less charity, smaller homes, higher state taxes.

Higher taxes shouldn't be the Democrats' top priority.

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