The tax-and-spending bill approved by Congress represents nothing but a flawed approach to the budget, according to a
Wall Street Journal editorial.
“The Senate-White House compromise grudgingly passed by the House is a Beltway classic: the biggest tax increase in 20 years in return for spending increases, and all spun for political purposes as a ‘tax cut for the middle class,’” Journal editors write.
Among other tax increases, the agreement raises rates on individuals with annual income of more than $400,000. The wealthy will see their dividend and capital gains taxes increase too.
“Mr. Obama said he wants to pursue ‘tax reform’ this year, but the Senate-White House bill is a walking repudiation of the concept,” The Journal states. “It's especially embarrassing that Republicans went along with this, given their 2012 campaign support for fewer loopholes in exchange for lower rates.”
The bill doesn’t even cut spending, increasing it by at least $30 billion through a continuation of extra jobless benefits this year. Automatic spending cuts were put off for two months. “So in February we can all witness the delights of another phony showdown that will result in more phony deficit reduction,” Journal editors write. “Maybe they can combine those with a phony debt-limit fight too.”
But there is a silver lining, the editorial says. “This may be the high-water mark of Mr. Obama's redistributionist tax agenda. The President has had unusual leverage over Republicans because he just won re-election and because taxes were going to go up even if they did nothing.”
From now on the GOP must realize it can’t bargain with Obama, the editors maintain. “House Republicans should pursue their own agenda and let Mr. Obama and Senate Democrats pursue theirs. Mr. Obama has his tax triumph. Let it be his last.”
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