It has been Republican dogma for the past several years or longer that “we don’t have a revenue problem, we have a spending problem.” Kowtowing to private citizen Grover Norquist and his “no tax increase in any form, under any circumstances” pledge, Republicans in Congress and elsewhere have heretofore rejected any kind of balanced approach to shrinking the U.S. debt and deficit that involves raising revenues in any way. In one famous moment at their August 11, 2011 debate in Iowa, the Republican presidential candidates all rejected even a hypothetical solution that consisted of a ten to one ratio of spending cuts to tax increases. However, in the wake of their considerable defeat in the 2012 elections, the Republican wall against raising revenues is now crumbling.
Well-known Republicans who have signaled acceptance of the idea of raising revenues, in some cases raising marginal tax rates on the rich, include William Kristol, Senators John McCain and Lindsey Graham, Congressman Peter King of New York, and even Donald Trump and Ben Stein. Some Republicans are directly confronting Grover Norquist, whose irresponsible approach, according to some, led to the the Republicans’ election defeats last November 6. Georgia Senator Saxby Chambliss is the latest Republican to take on Norquist publicly.
Of course, opinions can differ on just what “revenues” mean, and how we should raise them. We can expect semantic battles on this issue in the coming weeks and months. For example, some Republicans such as Mitt Romney and House Speaker John Boehner have suggested that revenues can be raised not by increasing tax rates on the wealthiest Americans, but by closing unnamed loopholes and ending unnamed deductions. President Obama was specifically asked about this at his November 14, 2012 press conference, and said:
it’s very difficult to see how you make up that trillion dollars, if we’re serious about deficit reduction, just by closing loopholes [and] deductions. You know, the math tends not to work.
On the other end of the spectrum is the idea that, since the Bush tax cuts had built-in sunset provisions, letting them expire isn’t raising taxes at all, but merely following the tax cut law that Republicans adopted in the first place. Even Grover Norquist once admitted that this is so.
In any case, the fact that many Republicans are now openly agreeing or implying that we have not just a spending problem but a revenue problem, and that they are willing to join Democrats in raising revenues in some manner to solve it, is, to paraphrase Vice President Joe Biden, a big effing deal.