Welcome to the continuation of a weekend Twitter conversation about the name "Bush tax cuts." On Saturday, some of us tax and word nerds exchanged semantics and policy views on what to call the tax rates and breaks that are set to expire on Dec. 31, 2012.
I soon realized that this topic just couldn't be addressed properly in 140 character bursts. So I offered to provide a platform for further discussion here on the ol' blog. Two of my Twitter pals took me up on that.
Below is an analysis by Yoenis Cespedes.
Presidential ownership of tax rates or tax cuts
At what point does a tax rate -- or any other policy -- belong to an administration? When does it change names if it belonged to a previous administration?
The object of today's discussion is the so-called Bush Tax Cuts. The Bush administration herded through two pieces of legislation in 2001 (Economic Growth and Tax Relief Reconciliation Act of 2001) and 2003 (same thing, but this time Jobs instead of Economy!). If I remember correctly, they were quasi-controversial (by yesterday's standards; I'm not sure anything is controversial anymore!) because reconciliation was used to get the bills passed and they had built in sunset provisions, which meant that as far as the Bush administration was concerned, those rules impacted the time period from 2001 to 2010.
In December 2010, in the waning moments of light, the Obama administration was able to strike an accord with good bipartisan support -- 139 Democrats and 138 Republicans voting aye in the House. The rates did not change; they were extended for two more years.
The question on the table is this: Are they now cuts? Or are they now just the tax rates? And if they are rates, are they the Bush rates? Obama rates? Bush cuts? Obama cuts? Boehner cuts? Reid rates?
I can tell you this, if I were running for office this year, and I had voted yes, that populist measure would be *MY* CUTS!!!
Cuts. Not rates. Why? Two reasons:
1) Cuts are better than rates. You had rates, now you have cuts. And when it comes to taxes, cuts are popular. And don't bother researching that, just trust me (See? I'm a politician).
2) If my name is on the ballot, I want my name on every Google News, tweet, Yahoo Finance page you can find, and I want it associated with "tax cuts" not, well, anything else that politicians do these days.
Of course, I'm not running for office, so my view is slightly different. These rates are what they were -- they're not cuts, they exactly the same as they were before (focus! We're only talking about federal rates for ordinary income taxes!).
Bush et al could rightly lay claim to them from '01 to '10, but they now belong to President Obama and then-Speaker Pelosi. The House shepherded this fine legislation, eventually being signed by our current Commander in Chief.
Some will say "Bush set them, and they haven't changed, so they're still his." A fair comment, but did Bush set them for 2012? No. Do we let politicians get away with blaming bad things on their predecessors? OK, maybe this is a bad question.
Rephrased, SHOULD we let politicians blame bad things on their predecessors? No.
Do politicians ever let previous administrations get credit for good things? No.
If you agreed with those two sentiments, then you either like the tax rates, and should give credit where credit is due, or you don't like the rates, and you can clearly blame the leaders who oversaw its passage.
As my quite bright 8 year old likes to say, "You touched it last!"
You can follow Yoenis on Twitter at @AppFlyer.