The great irony of the fiscal cliff deal is this: The tea party forced the tax hike. Had the tea party, whose American Revolution-inspired name was all about tax cuts, not forced a fight over the debt ceiling, none of this would have happened. Yes, Obama's fierce urgency to raise rates on wealthier earners was an essential part of what happened. Surely, a President Romney wouldn't have allowed it. But by pushing the country to the brink in 2011, the tea party discovered the law of unintended consequences--forcing a sequester that Democrats argued, and Republicans tacitly conceded, required tax hikes.
Had there been no debt ceiling fight, would taxes have gone up anyway? Maybe. They were due to expire, true. And the president had greater leverage, to use that overused term. But more likely than not, there would have been a stronger move to extend the Bush cuts as the president did in 2010.
The threat of sequestration--which would not have loomed without the 2011 debt-ceiling fight--helped drive the tax hikes. Now we have the first tax-rate hikes since 1993, albeit coupled with an Alternative Minimum Tax indexing and some other baubles. And unlike the Clinton era, when the hikes passed without a GOP vote, this time their fingerprints are on it.
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