Heritage Action for America on Taxes: No Compromise

Heritage Foundation's 501(c)4 offshoot is targeting some proposals in the new tax deal. But what they're really attacking is the idea of compromise.

Heritage Action for America, the 501(c)4 political off-shoot of the Heritage Foundation, has decided that it does not like some of the provisions in the new tax cut compromise worked out between Obama and the Republicans. In an email sent out to their supporters, Heritage Action for America declares that "there are a number of problematic provisions in the current agreement that should be dropped by Congress as it considers the agreement." They encourage their supporters to "Call your Senators and Representatives with this simple message: don't rubber stamp Obama's tax deal"

What provisions would Heritage like to see dropped? First they are unhappy with the compromise reached on the estate tax which has been lowered to 35% and which has had the exemption increased to $10 million. The Huffington Post calls this a "capitulation"

Heritage warns that this is the "Return of the Death Tax", presumably like Lazarus:

The Return of the Death Tax: As The Heritage Foundation has consistently demonstrated, the death tax will punish job creators, kill some small businesses, and wreak havoc on the economy. There is currently no death tax, but it would spring back to life in 2011 to tax estates over $5 million at a rate of 35%. A two-year extension of current tax rates needs to ensure that the death tax remains dead.

As part of the compromise, Obama agreed to an extension of the Bush tax cuts for another two years. This is a position that most liberals regard as a betrayal of their core principles. For Heritage, this non-permanent extension is unacceptable:

Temporary Tax Rates and Additional Uncertainty: As the saying goes, the only certainties in life are death and taxes, but families and businesses need long-term certainty on what their taxes will be in order to plan accordingly, invest, and take risks that ultimately create jobs. By allowing for only a two-year extension of current tax rates, the President’s agreement provides no long-term certainty that is essential for economic recovery.

Re-read that last sentence. Knowing where taxes will be for two years apparently does not count as "certainty" about the tax rate.

Finally, they are unhappy with the extension of unemployment benefits:

"Permanent" Unemployment Benefits: The Heritage Foundation, drawing from the full spectrum of economic research, has shown that extended unemployment benefits decrease individuals’ incentives to get new jobs. The President wants to further extend these "temporary” unemployment benefits for another 13 months. If these temporary benefits never expire, they will become yet another permanent entitlement.

This might be the only provision in the deal that true progressive liberals are happy with, and even they would point out that 13 months is less than two years (the length of the extension of the tax cuts).

So maybe Heritage Action for America has a point that Republicans should have pushed Democrats to abandon their entire legislative agenda. The other possibility is that they find the idea of reaching any sort of compromise antithetical to their goals, even when they receive a lot of what they want.

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