Could Taxmaggedon be Solved BEFORE the Lame Duck?
That would be the safer, more intelligent thing to do, right? All too often in Washington, contentious yet uber-important legislation is pushed off until the lame duck session of Congress to avoid election-year attacks. We saw this in December of 2010; just days before the 2001 and 2003 tax cuts were set to expire, meaning a massive tax hike on the American people, the current rates were extended for another two years.
During that lame duck session, the Senate also ratified the New START Treaty, which amounts to unilaterally disarmament without any assurances that Russia would do the same (and thus far they are not honoring their part of the treaty, big surprise).
This year, the lame duck session is seen by many Washington insiders as the ideal time to strike a grand bargain to avoid the “fiscal cliff,” or “taxmageddon.” This disaster would hit America with a $494 billion tax hike, the largest tax hike in history. To get to that number, a storm of expiring tax cuts and a slew of new tax hikes come together. The Heritage Foundation has it all listed in this handy but frightening chart:
But we might not have to wait for the lame duck session or last minute for this monstrosity to be averted. House Majority Leader Eric Cantor (R-VA) sent a memo to House Republicans laying out their summer legislative agenda, and part of that strategy includes considering legislation that would prevent the pending tax hikes as early as July, months before they’re set to expire. Getting a head start on something is not generally done in Washington.
The announcement came just a couple days before European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy sent a letter to members of the European Union suggesting they urge the U.S. to avert taxmaggedon:
“In this regard, the EU should urge the US and Japan to implement credible medium-term fiscal consolidation plans, in particular to avoid the ‘fiscal cliff’ in the US at the end of the year.”
Europe’s own debt trouble aside, if even they know that taxmageddon will threaten our recovery, we should all be worried. House Republicans would be wise to take this issue off the table before the deadline begins to close in. Not only could they put forward a clear marker for the American people, but it would also avoid creating the uncertainty that stems from lawmakers who are determined to raise taxes.