The bill also illustrates the foolishness of the budget off-set rules that Mitchell has supported.In reality, the Mitchell-Shays bill wouldn't reduce the federal government's current revenues much, if at all. However, since big increases in both capital gains and estate taxes are scheduled for 2011, under the current rules, the bill would require approximately $330 billion in other tax increases or spending decreases over 10 years, to offset its phantom "cost."
Robb tries to make it look like requiring offsets is a bad idea. It is not. Very simply the rules require new programs or new tax cuts to pay for themselves with spending cuts or tax increases in other areas. Only a tax cut and spend Republican could view that as a bad idea.
But let's get down to the real point, who created the situation where these tax cuts would expire? Why were they setup this way? The answer is easy, the Bush Administration did not want to admit the real long-term cost of their tax cuts, so devised the clever scheme to have them expire in ten years. That way they could set the costs much lower. Sure is it bad policy and disingenuous, but that is how the current batch of Republicans operate. Not only is it bad for our budget, but it is damaging to business. Most businesses that benefited from the cuts, I am sure appreciated the largess, but the cost of shifting regulation can be expensive. Continuity of regulation can be almost as economically beneficial as a tax cut.
So, once again Mr. Robb you only have yourself and your fellow tax cut and spend Republicans to explain for this bad policy. Not only did they not think through how to implement their policy from a budget standpoint, they also over-reached and will lose most of the gains that they desired.
