The Bush-era tax cuts divided Congress repeatedly this year, most recently helping to sink the super committee. One of the great tragedies of those talks, however, is that the two sides were not as far apart on this issue as most assume.
“The truth is that both parties support about 75 percent of the Bush tax-cut package,” says one source familiar with the super committee’s discussions. “We’re talking about roughly a $600 billion difference out of the $4 trillion tax-cut package.”
Well, actually, around $678 billion spread over 10 years -- a painfully small number relative to U.S. government revenue and spending.
The rest of the 2001 tax-cut package, which President Obama passed again in 2010, consisted of tax breaks across the income spectrum: from expanded unemployment aid to a college tuition credit to a two-year adjustment to the alternative minimum tax to expanded child credit and earned income tax credits—programs that benefit Americans across the income spectrum.
So, with Democrats and Republicans stuck over $678 billion in revenue over the next decade, National Journal wondered, what else could the government buy at that price point?
- 6.5 years of mortgage tax deductions. With the housing market remaining one of the weak spots of the economy and waves of foreclosures still hitting key swing states, such as Nevada and Florida, this most sacred tax break could be funded for years.
- The Defense Department. Just this week the Senate passed a bill that would give the department $662 billion for fiscal year 2012 for weapons systems, the wars in Iraq and Afghanistan, military personnel, and the Energy Department’s national-security programs.
- 1.7 million years of pay for the president. President Obama earned roughly $400,000 in salary in 2010, according to his tax returns. If that level held steady, the $678 billion in revenue from tax breaks could keep a commander in chief in the money for, well, a long time.
- Unemployment benefits for 5.5 years. Unemployment-insurance benefits, according to the Congressional Budget Office, were expected to cost the government $120 billion in 2011. Divide that into $678 billion, and you could fund half a decade of unemployment checks—assuming, but not hoping of course, that the unemployment rate remains as is.
- The total corporate tax bill in America for 3.5 years. According to the Office of Management and Budget, the federal government took in about $191 billion in corporate tax revenue in 2010. The $678 billion in tax breaks for the wealthy under the Bush rates would cover companies’ tax bills for roughly more than three years.