Boehner's Cynical Offer

Yesterday John Boehner made a cynical counterproposal to the president's proposal to keep the Bush tax cuts for everyone but the wealthiest taxpayers.

Boehner's plan includes $800 billion in revenues gained by eliminating unspecified loopholes in the tax code. This is essentially a retread of the Romney/Ryan plan, which also refused to specify anything concrete.

The problem with closing loopholes is that there are thousands of them in the tax code. Half the legislation Congress passes provides tax relief to encourage one sort of economic behavior or other. Those are the very loopholes Boehner wants to eliminate.

Reagan's tax reform in the 1980s was this exact kind of rate deduction and loophole closure. Lo and behold, 30 years later we have a tax code encrusted with thousands upon thousands of tax deductions, incentives and loopholes.

That's why Boehner's proposal is the height of cynicism. Boehner knows quite well that any loopholes Congress closes in a budget deal will be as fleeting as the morning dew: they'll all be immediately replaced by new deductions and incentives to "help the job creators create more jobs."

Tax rate increases are the only durable method to raise revenues, and that's why the Republicans are so adamantly against them. They know closing loopholes is just a temporary cosmetic fix. And that's why conservative Republicans are pushing back against the very plan they supported just a few weeks ago when it was the centerpiece of the Romney campaign. They have to provide the public the illusion that they will somehow be making a compromise by accepting the elimination of loopholes. The whole loophole thing is just another Republican scam.

The only people who've gotten bonuses and salary increases over the last four years have been the 1%. Middle- and low-income workers' wages have declined in real terms. For that reason, raising tax rates on the 1% is is the only way to make the wealthy pay their fair share.

So, yes, the president should accept Boehner's offer to close loopholes. The tax code is larded with crap that benefits the few at the expense of the many. But the wealthy still need to pay taxes at a higher rate, because they've increased corporate profits by laying off some workers and milking the remaining workers for increased productivity while holding their wages down.

And the biggest loophole of all, the 15% rich man's special tax rate on dividends and capital gains, should be at the top of the president's list of rates to increase.