But as Jed Lewison pointed out in a post on Daily Kos, Congressional Republicans don't even need to violate the Norquist pledge in order to increase revenues. Under current law, the Bush tax cuts expire all by themselves at the end of the year. If Congress does nothing, income tax rates will automatically go up for everyone. So why all the public demonstrations of a willingness to break the pledge? Could all these pledge-breakers be throwing Grover Norquist under the bus to achieve some larger purpose?
Because Democrats are willing to extend the Bush tax cuts for income under $250,000, what is actually on the table now is a Democratic proposal to LOWER tax rates for everyone. But Republicans are balking at agreeing to extend the Bush tax cuts on those income levels unless Democrats also agree to extend the 35% tax rate on earned income above $250,000. That means that Republican expressions of reasonableness about revenues are to some extent a ruse. Those Republicans who publicly embrace the need to increase revenues have yet to express any willingness to restore higher income tax RATES for anyone. All they are talking about so far are limitations on deductions.
What's the difference, so long as we get some more money into the Treasury to help pay the bills? It's a big difference. The tax and budget talks going on now in Washington are merely the latest battle in an ideological struggle that goes back decades. It's an article of faith among Republicans that the most important thing we should try to achieve in the tax code is to keep rates as low as possible; and also to reduce the progressivity of the Code. Low rates, according to this theory, represent a reduction in government interference in peoples' economic decisions. And lessening progressivity represents a retreat from government attempts to re-distribute income. Republicans have at times been willing to allow the elimination of popular tax deductions, and also to allow payroll taxes to increase, in exchange for agreements to keep top marginal rates low, and thereby satisfy these ideological desires. Democrats, on the other hand, have generally favored more progressivity and higher top marginal rates, because they want to expand the social safety net and reduce economic inequality.
On the whole, Republicans have been winning the war over high tax rates, as over the years, rates and progressivity have been steadily ratcheted down, from a 90% top bracket during the Eisenhower years, to 70% in the 1970s, to 50% under Reagan, and 35% under George W. Bush. (It's no coincidence that over the same period, the disparity between rich and poor has reached levels not seen since the 1920's.) The Obama administration has been fighting hard to restore the 39% top rate that Bill Clinton achieved in the 1990's over fierce Republican opposition, opposition that has only increased during the last few years. (I might add that Republican opposition to the 39% top marginal tax rate has cost the Republicans a great deal politically--it was a factor in the 2012 election--since a solid majority of the public favors restoring the 39% top rate for high earners. Despite the heavy price they are paying, Republicans cling to the 35% top marginal income tax rate like nothing else.)
But last year's budget agreement was engineered to make it almost inevitable that the 39% top tax bracket would be restored if Obama were re-elected. Both sides knew that at the time, and Republicans agreed to the deal because they were hoping to win the 2012 election. But now Democrats show no signs of weakening on this point. Really, why should they? They won the election. That means what we are seeing are the last ditch efforts of the Republican opposition to forestall the inevitable. In the course of this battle, all kinds of surprising things might happen, like the willingness of the Republican opposition to break pledges and put anything on the table. The last thing the opposition will give on will be the thing they hate the most, which is to allow top marginal tax rates to creep back up again. We will get right to the edge of the so-called fiscal cliff, and may tumble over it, before that will happen.