Toomey’s plan–at least the tax portion of it–would increase income tax revenues by limiting deductions, particularly for mortgage interest and charitable deductions. These items taken in isolation would generally raise taxes on the upper brackets more than on the lower brackets. The plan also calls for lowering tax rates on these same brackets–e.g. the top tax rate would drop from ~35% to ~28%. The $300 billion tax increase is the difference between these two–the expected income from limiting deductions is greater than the expected loss from lowering tax rates.
However, IMO the plan falls apart when you consider real-world politics. Those deductions didn’t arise out of thin air; they are the result of special-interest lobbying which would no doubt continue even after the plan is put into place. And who, pray tell, has better lobbyists–the rich or the poor? While some of those deductions might remain eliminated, it’s more likely the ones benefitting the upper brackets would be reinstated over time–and meanwhile the top bracket has seen its tax rate drop by 20%.
IMO the Republicans are backing this plan because (1) it substantially lowers tax rates on the wealthy–even if it modestly raises their taxes in the short run–and (2) it provides a fig leaf for the charge that they are intransigent on revenues–a fig leaf they know they can easily discard down the road (after the lobbyists line their pockets asking for deductions to be reinstated).
Yes…it’s not the political system, it’s the people who vote for the politicians who are ultimately to blame. Basically, the two extremes have taken control of their respective parties and are driving us collectively against the breakers while the majority of American voters sit on the fence and are disengaged from the political process, just watching and waiting to see what will happen (while bitching and moaning about how fucked up the system is).
Think about it. If you are a Democrat in all but a swing state or district, the majority of your base is not going to be pleased if you try and compromise with The Enemy…you could see that on this board when Obama got elected and the Dems controlled the house and senate. RAM IT THROUGH! Was the battle cry. Full steam ahead! And when Obama DID try and compromise…bitch and moan about how he sold out and how he shouldn’t be re-elected. And the voters are the same way at the state and local levels. This, of course, equally applies to the Republicans. Unless they are in a swing state or district their base is not going to be pleased if they increase taxes or do any other things that are against the party line…and they REALLY aren’t going to be pleased if they compromise with those damn Democrats, who are also The Enemy. The politicians are in a Catch-22. They COULD do the right thing and compromise to try and get some sort of solution, but if they did then there are still no guarantees that their going against the party line would make a compromise happen (and, of course, they will probably be helping the opposing political party to some degree), and the most likely result is they won’t get re-elected. And even if they make the noble sacrifice and somehow the compromise happens, there are certainly no guarantees that the next batch in won’t just change everything back, or take it apart piece-meal and we’ll end up with a worst mess than we had to begin with (just keep an eye on the HCR stuff we got and lets see where it is 5 years from now).
The thing is, this might be a self correcting problem. It might actually be better if the government can’t do anything or come to a compromise, as there are some automatic cuts that will go in if they can’t AND stuff like the Bush Tax Cuts™ which are set to expire next year, IIRC (2013)…and some other things that will either cut expenditures or raise revenues. Assuming they don’t get hammered on themselves, we could have a couple more bad years and then start making a dent on the deficit. In theory anyway.
Ultimately though this is all a feature, not a bug…it’s how democracies actually ‘work’, so to speak. Or, as 'luci put it:
Personally I think that Authoritarianism isn’t more efficient, and certainly I wouldn’t use Stalin as an example of efficiency, but democracy certainly has it’s own pitfalls, especially when we let the extreme wings out of their box and get their nasty little fingers around the throats of the major parties.
This argument doesn’t support the conclusion. If politicians elected in districts (including statewide districts) where only a single party has a reasonable chance to win are pressured by constituents not to cooperate while politicians in other districts are not then the lesson to be drawn is that the problem is not with the people themselves but rather a political structure which promotes a 2 party system with uncompetitive districts. If xtisme is to be believed, xtisme is wrong.
