Not Extending The Tax Cuts *IS* A Tax Hike
Policy proposals are often advanced in very abstract terms. This is true, undoubtedly, of taxes. Tax rates are seen as numbers on a Washington policy chart rather than what they really are — the amount taken out of every individual person’s paycheck every day of every year.
I hear the refrain on the left that letting the Bush tax cuts expire isn’t a tax hike. It’s just “going back to the rates of the Clinton era.” In one sense, what they say is true. The Bush tax cuts were temporary reductions that had a deliberate sunset (not by the desire of Republicans in 2001/2003, but by political design and political rule). Yes, you can make the argument that because this was a temporary cut, letting it expire isn’t a tax hike.
But this fails to recognize that for longer than six years, Americans have been adjusting to the current tax rates. This is now the “normal” rate. Most have carried these rates through multiple jobs. Many have carried them through home purchases / refinancing, through multiple cars purchased or leased, have brought kids into the world and put others through college. They’ve lived their lives for over six years based upon a certain expectation of income every paycheck.
And if the cuts aren’t expected, that expectation will not be met in January.
You can make every argument you want about this being purely a return to Clinton-era tax rates. That argument will ring hollow on payday. That argument fails to recognize that to every American, this is going to feel like a tax hike. Whatever it’s called in the Capitol, our wallets will be lighter than we’ve become accustomed to, and on Main Street that’s called a tax hike.