Reaction to the tax deal is all over the lot, on both sides of the political spectrum. Paul Mirengoff thinks it is a very good deal for Republicans (John Hinderaker would go further and label it a great deal). Grover Norquist says it is a much bigger victory for Republicans than recognized. Mark Levin thinks it is a bad deal, and Hugh Hewitt is deeply dispirited.
Jonathan Chait thinks Obama got more from the Republicans than Chait thought he would. Jonathan Bernstein thinks it is actually a win for the Democrats. The New York Times thinks it is a disappointing retreat by the White House. Obama himself did not sound very happy.
We’ll find out who was right in two years, when all the issues will resurface in the middle of a presidential election.
But it is not too soon to note the intellectual collapse of one of Obama’s principal arguments. For the past two years, he castigated the Bush tax cuts as breaks for “millionaires and billionaires,” even though the across-the-board cuts primarily benefited people in the lower brackets (the proportion of millionaires and billionaires among taxpayers is one-third of 1 percent, according to the latest IRS statistics). In order to raise any real money from “millionaires and billionaires,” Obama had to define them as individuals making one-fifth of a million dollars (one-fourth in the case of couples) – because there were 10 times as many people in that group as real millionaires, and therefore (applying the Willy Sutton principle of public policy) that was the place to go.
The White House ended up opposing a “compromise” under which taxes would be raised only on real millionaires, since there was not enough money in that group to make that resolution sufficiently remunerative for the government. More than taxing millionaires and billionaires, the White House really wanted to tax the non-millionaires. When that proved impossible, the White House went in a different direction.
In contrast, the Republicans were unified around a set of principles easier to explain and defend: don’t raise taxes in a recession; don’t increase taxes on employers if you want more employment; don’t ask the public, which is fairly crying out for you to cut spending, to send you $700 billion more to spend. These principles are unlikely to be proved wrong in two years.