It’s common to hear both Republicans and Democrats yearn for President Obama to pursue “Simpson-Bowles-style tax reform,” rather than fighting to let the Bush tax cuts for income over $250,000 expire.
But letting the Bush tax cuts for income over $250,000 expire is Simpson-Bowles style tax reform.
The list of things that Simpson-Bowles supporters don’t seem to know about Simpson-Bowles is long and I intend to try to correct it in the coming days. But foremost on that list is that Simpson-Bowles begins by assuming the expiration of the Bush tax cuts for income over $250,000. It’s built into the “plausible baseline,” which you can read about on page 62 of the proposal.
Having banked the revenue from those tax cuts, it then turns to tax reform. In total, Simpson-Bowles ends up raising about $2.6 trillion in taxes. That’s a lot more than the $1.6 trillion Obama is looking for. But both Obama and Simpson-Bowles start the same way: By letting the Bush tax cuts expire for income over $250,000.