Abandon no-new-tax pledge? Some in GOP consider the unthinkable.
Exit polls showed that the GOP is seen as favoring the wealthy over the middle class. That may be leading some to reconsider the party's devotion to the no-new-tax pledge – at least for the rich.
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That line was echoed this week by some Republican governors: Virginia Gov. Bob McDonnell told Politico that his party would have to be more flexible when it came to raising taxes on the wealthy. “Elections do have consequences,” he said. “As a piece of an overall package with tax reform that is more comprehensive, I think it’s something that absolutely has got to be discussed.”Skip to next paragraph
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Mr. Barbour, the former Mississippi governor, concurred, saying: “If there’s enough savings, if there’s enough entitlement reform, if there’s enough certainty about tax reform in the next few years, I would" let the Bush tax cuts expire on top earners. He added: “You can’t be purist.”
Now, the Republican leadership in Congress has been much more vague. So far, they’ve indicated that while they agree there is a need for new tax “revenue,” they’d prefer that it come from closing loopholes, not raising tax rates. Reading their statements closely, it's possible to interpret them as still relying on assumptions that a cleaner tax code, with lower rates, will automatically lead to greater economic growth, and – presto! – generate more revenue that way. (This is an assumption that Democrats regard as little more than wishful thinking and many economists, too, view with some skepticism.)
Yet some rank-and-file members have begun hinting that they might, in fact, be open to raising tax rates at some point. Rep. Shelley Moore Capito (R) of West Virginia postulated in an interview with FoxNews.com this week that, "What I think you will see is a retention of the tax rates as they are for a year, with the promise that we will get into looking at all revenues – and that could include tax rates."
For his part, Norquist has always maintained that he’s fine with closing tax loopholes, as long as the overall effect is “revenue neutral” – meaning that the federal government should get no net increase in money. And he argues that raising tax rates on the wealthy would be just a first step toward ultimately raising tax rates on everyone.
But at this point, that appears to be a risk that more Republicans are willing to take. If they capitulate on the upper-level tax rates, they may hand Obama and the Democrats a victory – but they could also go a long way toward rehabilitating their own party brand in a way that ultimately gives it broader, more populist appeal. And that may be a more palatable option than risking being seen as the party that holds the US economy hostage for the sake of lower taxes for wealthy 1 percenters.