Tax Analysts Blog

Election is a Referendum on Tax Hikes

Posted on Oct 9, 2012

As noted in a prior post, the critical question for the degree of progress on fiscal policy after the election is the Republican stance on tax increases. This morning's Financial Times reports "a senior Republican aid" in the House arguing that if Obama is elected "we're not going to have much leverage" and "you might actually given in on [tax hikes for households with incomes over] $250,000." The article also reports a "top Republican aid" saying "the focus on whether to increase taxes on top earners is irrelevant." [That's a quote of the journalist's reporting, not of the aid.] The bottom line: "the hard line on high-end tax cuts seems to be shifting."

But all that is premised on a Republican victory. And if you hadn't noticed Romney is surging in the polls. In the Washington Post Ezra Klein points out that if Romney wins Republicans will also likely have control of both houses of Congress. And he will take the path of least resistance. "When he needs to lurch to the right, off he goes." Emboldened House Republicans will keep tax increases out of the big tax bill that Romney will seek to pass in 2013.

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