I'm not downplaying the revenue increase. I'm saying that even as Obama ignored his own commission until the 11th hour, neither side struck a deal remotely approaching what SB wanted two years ago, but it was a start. As for extending most of the Bush tax cuts, you can't pin that on the GOP solely. Obama and Reid wanted to extend all of the cuts except on the top 2% of wage earners. They weren't looking to sunset all of the Bush provisions. The GOP agreed to all but the top 1% essentially in the end with effectively no new spending cuts. Even though I think SB got the pro-growth policy right, which is part of the revenue-side, I think their assumptions about "investment income" were overly optimistic. It's something that should've been phased in or replaced by something else like the estate exemption.
But, I agree with you. This was a missed opportunity all around. My sense is that Boehner realized that negotiating with Obama was fruitless, because, in the end, his political philosophy of extending rates on the rich and doing so very little on the spending side was obvious. So why introduce a bill that was going to get killed? I mean, Obama had a mandate, and he was as brazen about it as Bush was after he won a second term, language that made me puke at the time (Bush - I said so at the time). Nobody has a "mandate." Most economically-literate people see the need to cut spending and they don't want to hand their kids a mess. Unfortunately, the voting populace consists primarily of the Jay Leno "Jaywalking" victims.
Obama's goal was to split the House, which he effectively did. Good for him, not so good for the country. Frankly, I don't know how we walk this back at this point, but the speech after the bill was voted on was essentially one of more spending or, cough, cough, "investment" in the economy. Heck, rates are cheap. Lets borrow ourselves to oblivion. It worked so well for the PIIGS. It worked so well for CA, IL, NY, and NJ.
However, I agree that the GOP needed to be more realistic about the revenue side, which is why I was upset with them when they canned plan B, because I think they could've compromised it down to the $450,000 figure and gotten much more in spending cuts. But, perhaps I'm the optimist here. Perhaps no such compromise is possible until our backs are really against the wall, which they will be.
I used to work for a chief market strategist that was on Bush's tax commission. I remember a lot of the ideas about getting rid of exemptions and deductions were on the table then. I don't recall why it never went anywhere. This isn't anything new. It's always about the political optics, which is a shame, because nobody wants to play the sacrificial lamb, but, right now, it's looking like one-party rule. And that's dangerous, in either direction
All I know is that Federal debt as a percentage of GDP was 40% at the height of the Great Depression, soared during WWII only to fall to a trough of 32% in 1974. And it has climbed steadily since, crossing party aisles, hitting 60% by 1990, 70% by 2008 and 102% by 2011. Entitlements and interest alone will eat up all revenue within 12-13 years. This is unsustainable. We cannot tax our way to prosperity.