Revenue vs. “Revenue”

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A couple of times recently I’ve buried a point that really deserves to be front and center. Here it is: Republicans have not agreed to increase taxes. In John Boehner’s letter to President Obama on Monday, he said a grand total of two things about taxes:

  1. Republicans continue to oppose higher marginal tax rates.
  2. Instead, new revenue should come from “pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates.”

You have to perform some conservative Kremlinology to decode this, but it’s not really that hard. Recall that last year, during the debt ceiling talks, Boehner agreed to $800 billion in new revenue. But this turned out to be revenue in name only: It came mostly from dynamic scoring, the supply-side pixie dust that says lower tax rates supercharge economic growth and therefore produce more tax revenue automatically. The media post-mortems were all a little fuzzy on this point, but they mostly seem to suggest that the loopholes Boehner agreed to close were primarily to make up for the lower rates. The net new revenue came almost entirely from dynamic scoring.

The same thing is going on here. Boehner’s letter was signed by Eric Cantor and Paul Ryan, but note exactly what it said. They want to close loopholes “while lowering tax rates.” This suggests that they think the loophole closings will make up for the lower rates but not produce any net new revenue. That will come from the pro-growth magic of rate-lowering and base-broadening.

I know I open myself up to charges of excessive cynicism here. But Boehner, Cantor, and Ryan can prove me wrong with just a few plain words. So far they haven’t, and their public letter was phrased very carefully indeed. No matter how much the Washington pundit class wants to believe it, they very decidedly haven’t agreed, even in principle, to higher taxes. Anyone who thinks they have should just ask them directly.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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