Is it the case that the White House is acceding to Republican demands to extend the Bush tax cuts permanently? Or is it the case that the White House still does not agree to the demand, but is having trouble getting its message out?
Whatever the case, the fact that this battle is being fought on a ground favorable to Republicans bodes exceedingly well for the GOP, and exceedingly badly for a White House that once was able to show a significant amount of political deftness. Getting beyond politics, I think that the smartest move for the White House to make is to endorse the equivalent of the chairmen’s mark that came out yesterday from the deficit commission, with an attendant call for comprehensive tax reform that would lower personal income tax rates tremendously, seriously dilute–if not completely get rid of–corporate income taxes, and introduce a VAT, as I call for here. It would probably go a very long way–along with responsible budget cuts–towards resolving our parlous fiscal situation, even though the plan certainly needs more tweaking. But as I note in my Arena post, we are not likely to get serious about the deficit until the situation becomes completely and utterly terrifying in nature.