I have a piece in the American magazine this morning comparing the “loss” in revenue from extending the tax cuts to government spending. This is particularly striking because I did what the president has been doing for weeks now and looked at the ten-year cost of government spending. Now let’s compare: The ten-year cost of extending the tax cuts is $3.7 trillion, the ten-year cost of extending the tax cuts for high income earners is $700 billion, and the ten-year cost of government spending is $41.9 trillion.
And that’s assuming that if the tax cuts expire the government will collect as much revenue as it expects. That, we know, would only happen if people didn’t adjust their behavior once the marginal rates increase, which is unlikely.
The whole thing is here.