Project Syndicate
BERKELEY – Unless something
unexpected happens, the United States’ many legislated reductions in
taxes over the past 12 years – all of which have been explicitly
temporary – will expire simultaneously at the start of 2013. American
tax rates will revert overnight to their Clinton-era levels.
Some
of these reductions were implemented to fight what was seen four years
ago as a temporary downturn. Although their supporters wanted to make
them permanent, claiming that they were temporary allowed for the
circumvention of procedural requirements in the legislative process that
Democrats had created in a vain effort to guarantee fiscal sanity.
The
immediate increase in tax rates is only part of the story. At the same
time, automatic reductions in the defense budget and “discretionary”
domestic spending – agreed to by both Democrats and Republicans in the
summer of 2011 – will take effect.
