Republicans To Accept Revenue Increases to Reduce Deficit As Long as They Are Offset by Revenue Decreases to Increase the Deficit

Economic Policy and the Deficit – The Lunacy Lives On

The lack of agreement in the negotiations between Republicans and the Obama Administration has been over whether or not any revenue increases, in the form of higher taxe rates or the change in various loopholes of the tax code that allow lower taxes for large corporations and wealthy taxpayers, would be included in a deal.  Democrats have insisted that because the pain of cutting spending is so great on the old, the sick, the young, the disabled, the student, the poor etc, that some of that proposed spending decrease be reduced by raising revenue from wealthy taxpayers and/or corporations.

The Republican position has now been set out by Eric Cantor, (R, Va)  Majority Leader of the House.

I have said from day one, we are not for tax hikes on the American people or businesses, and if the president wants to talk loopholes, we'll be glad to talk loopholes," Mr. Cantor said. "We are not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else."

Mr. Cantor stressed that any plan would have to be revenue neutral, meaning the increased federal revenues from closing business deductions would have to fully be directed toward other types of tax cuts.

Yes, you are reading the correctly.  Revenue increases to close the deficit are ok as long as there are offsetting revenue decreases. 

The interesting thing here is how lacking in intelligence the Republicans find the Democrats and the public in general.  The Wall Street Journal headlines the story as a “Possible Tax Compromise” although exactly what the Republicans are compromising on is totally missing.