By Jon Kyl, Rob Portman, Pat Toomey, Jeb Hensarling, Fred Upton and Dave Camp, Published: November 25
We do not choose to add more to the blame game for failure of the Joint Select Committee on Deficit Reduction , but one Democratic talking point needs debunking: that the talks failed because of Republicans’ attachment to the Bush tax cuts.
The untold story of the negotiations is the significance of the Republican offer of fundamental tax reform. It is critical to understand the interplay between the proposal (dubbed the “Toomey plan”) and existing tax law.
First, a bit of history. The 2001 and 2003 changes to the tax code reduced marginal rates for all taxpayers as well as the rates for capital gains, dividends and the death tax. For technical reasons, all of these provisions expire at the end of next year — meaning that if Congress does not act, Americans will face the largest tax increase in our history.
This prospect has put a wet blanket over job creation and economic recovery. It would be the wrong medicine for our ailing economy. As President Obama has famously said, “You don’t raise taxes in a recession.” Partially to avoid this result, but also to try to meet the Democrats partway — given their absolute insistence on big, new tax increases — Republicans offered a proposal that would have both reformed the current code and produced significant new tax revenue.