Rep. Hensarling Touts "Progressivity" Of Regressive GOP Tax Plan
After the official collapse of the super committee on debt reduction, Republicans are in full attack mode, blaming the fruitless culmination of the bipartisan talks on Democrats and President Obama. Today, the GOP super committee co-chair, Rep. Jeb Hensarling (TX), made his case on the Wall Street Journal op-ed page. In a column titled "Why the Super Committee Failed," Hensarling complains that Republicans budged on taxes, but Democrats would not accept anything other than a "massive tax increase."
Republicans were willing to agree to additional tax revenue, but only in the context of fundamental pro-growth tax reform that would broaden the base, lower rates, and maintain current levels of progressivity. [...]
Unfortunately, the committee's challenge was made more difficult by President Obama. Since the committee was formed, he has demanded more stimulus spending and issued a veto threat against any proposed committee solution to the spending problem that was not coupled with a massive tax increase.
The remarkable part of Hensarling's argument is his claim that the GOP offer, crafted by Sen. Pat Toomey (R-PA), preserves "current levels of progressivity" in the tax system. It's not often that conservative leaders tout progressive taxation — and, in this case, Hensarling seems confused about the concept.
In reality, the GOP proposed to make some of the most regressive elements of the Bush tax cuts permanent, while actually lowering the top individual tax rate from 35 to 28 percent. "In contrast," according to the Center on Budget and Policy Priorities," taxpayers with income below $200,000 would see their tax bills rise, on average, compared to current policies."
[T]he Republican proposal would significantly shift tax burdens from high-income to lower- and middle-income taxpayers. High-income taxpayers would benefit enormously from the proposed cut in tax rates, while lower- and middle-income taxpayers would suffer disproportionately from the proposed reductions in tax expenditures, since the plan shields the main tax expenditure for the highest-income Americans - the highly preferential treatment of capital gains and dividend income. [...]
In contrast, taxpayers with incomes below $200,000 would see their tax bills rise, on average, compared to current policies. These additional taxes on lower- and middle-income Americans would come on top of the effects of the nearly $900 billion in spending cuts over ten years under the Republican plan, which would fall disproportionately on them because they are more dependent on Medicare, Medicaid, and other programs slated for cuts than are higher-income Americans.
So the GOP's grand offer shifted the burden from the rich to everyone else: That's the definition of regressive. Hensarling is just days removed from suggesting he opposed "any penny" in new revenues, so it's difficult to take his tax argument seriously. Nevertheless, he either doesn't understand the concept of "progressivity" or is blatantly lying, which points to the real reason the super committee failed: Republicans chose dishonest ideologues to represent them, poisoning the process from the very beginning.