I’d figured that the “deal” over taxes was going to have permanent extensions on your first $250,000 of taxable income and temporary extensions for those of you lucky enough to have income over that. Having the upper income tax cuts get re-litigated in 2012 is good politics for the Democrats if you get ‘decoupling’ like that — having the debate solely on taxable income over $250,000. But apparently they’re temporary for everyone. Which means you’re going to have this exact same debate in 2012. Which, for those of you following at home, is not a very good thing.
In theory that might not be a bad thing. But after the whiff in September and now this cave, I’m having a certain lack of confidence in their ability to manage this one.
On the other hand, Ezra Klein argues that this might amount to a win for the White House on mid-term political and even policy grounds because of the stimulative effect of the tax cuts and the UI re-up combined. His argument being that there’s enough stimulus contained in the deal to measurably improve the economy by 2012 and thus the president’s chances of reelection. Not only that, but create a better political climate to re-litigate the tax question. I think Ezra may be on to something (I’ll have to give it some thought). But I find myself in a position somewhat similar to that he acribes to a lot of folks on the Hill: it might be brilliant. But it’s getting hard to believe it’s not brilliant by accident.
