Damn, math really messes shit up. I mean, first you get told about all this money that got saved and, then, boom, it’s gone because turns out…it wasn’t saved at all. Welcome to the wild world of fiscal deals made by political parties who care mostly about their own futures, not the futures of regular people.
Turns out, as our friends from Citizens for Tax Justice show, all that money supposedly raised by raising by a teensy bit the taxes on the richest…well, oooppsss…it’s not what it seems:
While the White House and members of Congress have described the fiscal cliff deal as raising $620 billion in revenue, the Joint Committee on Taxation (JCT), the official revenue estimator for Congress, has projected that it will actually reduce revenue by $3.9 trillion over a decade. The widely-used $620 billion figure is calculated by comparing the bill’s provisions making permanent most of the Bush-era tax cuts to a proposal for making permanent all the Bush-era tax cuts.
A full extension of the Bush-era income tax cuts and estate tax cuts would therefore have cost an additional $617 billion over ten years. (That includes the additional $598 billion in income tax cuts and the additional $19 billion in estate tax cuts.) This is the origin of the widely reported (rounded) estimate of $620 billion in revenue saved under the fiscal cliff deal.
So, it’s pretty shady math.
And, by the way, surprise, who is pocketing more money?
The fiscal cliff deal also includes a package of provisions often called the “extenders” because they extend numerous special-interest tax breaks, mostly for large corporations, through 2013 and retroactively, to 2012. In these two years, these tax breaks will cost more than $100 billion. Officially the cost of these provisions is $76 billion over a decade, but it is very likely that they will eventually cost far more because lawmakers have made clear that they will always extend them.
Indeed, in the first two years, just the business “extenders” will cost more than the $85 billion “saved” by allowing some of the high-income Bush tax cuts to expire. And if the “extenders” are reenacted every few years so that these provisions never expire, they will cost more than the $620 billion “saved” over 10 years by allowing some of the Bush-era tax cuts to expire for the rich.