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Federal Tax Fight; We’ll Do it Again in ’12

Original Article

The sweeping tax deal worked out by President Obama and (mainly, it appears) the Republican leaders in Congress is the first fruit of the 2010 GOP victories in the House and, to a lesser degree in the Senate. Without those victories, no deal.

There is some question whether the Democrats led by Speaker Pelosi and Majority Leader Reid are going to go along. They may be fuming tonight, who knows? (Many liberal groups are livid.) They really are stuck now. If they don’t pass this deal, they spoil any chance for any other Lame Duck session legislation and will be blamed when the deal is enacted later—and with great disruptions—in the new Congressional session that begins in less than a month.

But this is certain: the decision to make only a two year extension in the rate for high earners and the 35 percent tax cap on estates over $5 million (the “death tax”) guarantees that these issues will be right back in the 2012 election debate. Maybe the White House thinks the public will back tax increases then, decoupled as they apparently will be from general tax rates. If so, President Obama, as a candidate (presumably), will benefit. But it may be that the public really don’t want any tax increases, which seemed to be their mood in last month’s election. If that is the case, it was a bad mistake for the President to arrange for the whole debate to get kicked into the next election cycle.

Bruce Chapman

Cofounder and Chairman of the Board of Discovery Institute
Bruce Chapman has had a long career in American politics and public policy at the city, state, national, and international levels. Elected to the Seattle City Council and as Washington State's Secretary of State, he also served in several leadership posts in the Reagan administration, including ambassador. In 1991, he founded the public policy think tank Discovery Institute, where he currently serves as Chairman of the Board and director of the Chapman Center on Citizen Leadership.