Again, Matt Yglesias writes that the Republicans will cave and vote for Obama’s tax proposal. Of course, that’s possible, but his explanation makes no sense to me.
And they won’t refuse to pass middle class tax cuts. It’s true that Obama can’t force them to pass middle class tax cuts. They’ll pass them because they’ll want to pass them. Why will they want to pass them? Well, because Obama’s proposal for middle class tax cuts happens to substantially reduce rich people’s tax bills. The whole debate right now is over the marginal rate applied to income above the $250,000 threshold. The so-called “middle class” tax cuts regard the rates paid at lower brackets. But rich people pay those middle class rates too. Whether you have $45,000 or $450,000 or even $4.5 million in taxable income the “middle class” tax cuts cut your taxes. And Republicans will want those tax cuts.
Matt Yglesias is framing this as though the only agent here was the Republican Congress who has to chose between nothing and Obama’s plan. But that’s an absurd way to look at it. Obama is the other agent. He also has political skin in the game and if the talks break down, he will also suffer. When Matt Yglesias is saying that the Republicans want middle class tax cuts, he is saying that the Republicans prefer Obama’s plan to the status quo. But they also have a plan. And Obama cannot afford another recession. (which many people believe will occur if the legal status quo remains in place) Such an event might very well cost him the Senate in 2 years and would make him slip further in the House. So Obama prefers the Republican plan to nothing. So in that sense, Obama wants the Republican plan to happen.
Ultimately, the Republicans may end up caving completely, or Obama may. Or more likely, they will meet in the middle somewhere. But for the life of me I do not understand why Matt Yglesias keeps pushing such a non-argument.