The Bush Era Tax Cuts Are Going to Be Permanent – Get Used to It

Policy for the World We Live In 


 

Over at Tax.com a gentleman by the name of David Windish is making the point that by December 2012 the Bush era tax cuts will be more than a decade old and will have been a fixture of the tax system, not a temporary measure.



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The “Bush tax structure” will be in place for 12 years. Talking about the “Bush tax cuts” as some sort of temporary thing just doesn’t reflect reality. Business and individual taxpayers have been making decisions for more than a decade based on our current tax structure. They are used to it. It is familiar and comfortable (well, maybe not comfortable, but at least familiar).

The point, those who think the Bush era tax cuts can or will be allowed to lapse after December 2012 are not thinking about reality.  The only reason these tax changes had a ten year life was that a non-infinite life was necessary for the parliamentary contortions necessary to get them to pass. 

In December 2012 (or January 2013) there are four things that will, or will not happen.

1. The Congress will not pass any law which extends only the tax cuts for those making less than $250,000.

2. The Congress will pass a law extending or making permanent all of the Bush era tax cuts.

3. The President, if it is a Republican will sign such a law.

4. The President, if it is Mr. Obama will sign such a law.

Anyone advocating tax policy needs to start with what the law is today, and look at changes from.  The idea that the U. S. will go back to Clinton era tax rates is not credible.

Also, anyone advocating tax policy needs to start with the position that revenue increases will not happen.  The reason for this is that revenue increases will not happen.