Why Republicans Are Wrong When They Say 'Nobody's Talking About Tax Cuts'

November 29, 2010 2:24 pm ET — Matt Finkelstein

In the major policy debates of the past two years, Republican lawmakers have adhered faithfully to pre-ordained talking points to make their argument.  For instance, following the instructions of GOP "word doctor" Frank Luntz, conservatives framed health care reform as a "government takeover" and the crackdown on Wall Street as a "permanent bailout," even though both phrases clearly distorted the issues at hand.   

The ongoing tax debate is no different. In addition to the phony claim that letting the Bush tax cuts expire would disproportionately affect small business owners, Republican leaders are clinging to one sentence designed to upend the terms of the conversation: "Nobody is talking about tax cuts."

According to the conservative argument, every American taxpayer faces one of two scenarios next year: taxes will go up or they will stay the same. But tax cuts, they say, aren't in the cards. As Senate Minority Mitch McConnell (R-KY) put it, the Bush tax cuts constitute "existing tax policy" that has "been in place for ten years," and Republicans don't want to change anything.

  • REP. KEVIN MCCARTHY (R-CA): There's no tax cut. You're going to keep the same tax system or increase taxes.
  • SEN. JON KYL (R-AZ): But let me make something very clear. Nobody is talking about tax cuts. We've had the rates in existence now for 10 years. All Republicans are saying is keep them in place, don't raise taxes on anyone.
  • REP. MIKE PENCE (R-IN): You know, I'll tell you, right now, on this tax increase issue, remember, we're not talking about tax cuts, we're talking about preserving the current tax relief that's on the books and making that permanent.
  • REP. ERIC CANTOR (R-VA): First of all, as far as the tax rates are concerned, you know, so many people are talking about tax cuts, when the reality is, one of two things is going to happen January 1, 2011: Either your tax rates are going to go up or they're going to stay the same. Nobody's talking about any tax cuts.

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While it's true that tax rates will not be lower next year than they are today, the Republican formulation is deceptively simplistic.

The reality is that "existing tax policy," which was written by Republicans, actually calls for the Bush tax cuts to sunset on December 31. At that point, the GOP-supported Bush tax cuts will end forever and the GOP-supported Bush tax hikes will kick in. (Many conservatives are erroneously calling this scheduled increase the "largest" in history, though they conveniently blame it on President Obama.)

Given the circumstances, Obama and Congress face an unpleasant choice. They can either extend tax cuts that produced monstrous deficits and failed to create economic growth, or they can allow the tax cuts to expire as scheduled and get attacked for raising taxes. Obama is hoping to strike a middle ground that would provide permanent relief for the middle class while restoring tax rates for the richest Americans to pre-Bush levels.

Republicans are trying to hijack the debate, but the facts are clear. When the clock strikes midnight on New Year's Eve, every taxpayer will be responsible for some level of contribution to the government. Congress is debating whether or not to make that contribution lower — for some or all Americans — than it would be under current law. If that's not "talking about tax cuts," then what is?