There has been a lot of ink spilled over the failure of the congressional “supercommittee” to find a path toward systemic, long-term deficit reduction.
After digging through the various accounts of what went wrong, it strikes me that the collapse of the effort boils down to a fairly simple ideological difference over taxes.
Republicans put forward a series of proposals which would have effectively locked in the pattern of taxation established by President George W. Bush, one that reduced the tax burden on America’s wealthiest citizens.
Yes, the plan developed by Sen. Pat Toomey would have boosted revenue somewhat by closing high-end tax loopholes, but the concept essentially institutionalized the notion that capital gains taxes and estate taxes should remain low or nonexistent.
Ultimately, the Toomey plan would have placed the largest burden of deficit reduction on America’s middle and lower classes, not by raising their taxes so much, but by cutting the programs, public sector jobs and services that many families rely upon.
After some early uncertainty, meanwhile, Democrats appear to have solidified their stance around the notion that America’s wealthiest citizens need to contribute significantly more to Federal revenues, both to pay for government programs and cut the deficit.
They hope to return the nation to upper-end taxation rates more in line with those seen during the Clinton years.
Yes, President Barack Obama put Social Security, Medicare and other entitlements on the table for negotiated cuts. But the real core of the Democratic plan appears to be to allow the Bush-era tax cuts to expire at the end of 2012.
The good news here is that this ideological log-jam gives us exactly what democracies need in an election season: a clear choice.
Voters who believe that income tax rates on upper-wage earners are too high and that further tax hikes will stifle investment, innovation and job creation in the middle of a painful economic slump, have a party that shares that conviction whole-heartedly.
Voters, meanwhile, who believe that the Bush-era tax cuts were a major give-away to the wealthy, contributing mightily to dangerous national deficits at a time when the US faced two wars and historic economic challenges at home — well, they have a party that shares their views.
My sense is that Republicans and Democrats feel pretty comfortable marching under these banners over the next twelve months.
Both sides think they have a winning ideology, one that will capture the hearts and hopes of the American people.
What do you think? Do either of these approaches fit your sense of where America needs to go?