The world was upside down. Normally it takes the House, Senate and president acting together to raise taxes. Now it would take all three to stop any or all of the tax cuts from lapsing—and from taxes increasing on all Americans.
This Alice in Wonderland situation flowed from the modern Democratic Party’s hostility to tax reduction. Back in 1981 the Reagan tax cuts were made permanent. The Tax Reform Act of 1986 reduced the top rate from 50 percent to 28 percent—permanently.
The legislation passed by the House, Senate and now signed by the president that makes 85 percent of the Bush tax cuts permanent is a bittersweet victory or defeat. Income tax rates fall for 99 percent of Americans. Those reductions are now permanent. And yet Americans rightly worry about Obama’s ability to force the top rate to automatically jump back to Clinton’s 39.6 percent from Bush’s 35 percent. Obama won his class warfare pound of flesh.
One hundred and fifty seven House Republicans voted “no” on the legislation to make most of the Bush tax cuts permanent out of understandable frustration that there was no vote or action they could have taken to restore the full Bush tax cut.
So now what?
Now the tables have turned. The income tax rates and important credits and deductions are now permanent. It takes an affirmative vote by the House and Senate to increase taxes ever again. (Good luck with that, Mr. President.)