How the Tea Party Raised Taxes

Matthew Cooper

The great irony of the fiscal cliff deal is this: The tea party forced the tax hike. Had the tea party, whose American Revolution-inspired name was all about tax cuts, not forced a fight over the debt ceiling, none of this would have happened. Yes, Obama's fierce urgency to raise rates on wealthier earners was an essential part of what happened. Surely, a President Romney wouldn't have allowed it. But by pushing the country to the brink in 2011, the tea party discovered the law of unintended consequences--forcing a sequester that Democrats argued, and Republicans tacitly conceded, required tax hikes.

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Had there been no debt ceiling fight, would taxes have gone up anyway? Maybe. 

The Bush-era tax cuts were due to expire, true. But the threat of sequestration made the need for new revenues all the more urgent.  

 Without sequestration Republicans would have had a stronger hand to argue that extending the Bush cuts was the right thing to do--and something that president Obama readily agreed to in 2010. In other words, the threat of sequestration--which would not have loomed without the 2011 debt-ceiling fight--helped drive the tax hikes.

Now we have the first tax-rate hikes since 1993, albeit coupled with an Alternative Minimum Tax indexing and some other baubles. And unlike the Clinton era, when the hikes passed without a GOP vote, this time their fingerprints are on it. 

Democrats have long seen the effect of unintended consequences in social programs--welfare programs that hurt more than they helped, for instance. Now it's Republicans who lacked the foresight to see what they wrought--the very  tax hikes they so adamantly opposed.