The Democratic proposal would establish a 30-percent minimum tax rate on incomes over $1 million to raise about $54 billion over 10 years. It would raise $1 billion more by subjecting tar sands oil to a tax to pay for oil-spill cleanups and by ending a business tax deduction for the cost of moving equipment overseas.GOP might want to take a sip of water here, and towel off. This is an entirely progressive proposal to avoid the sequester - both in the cuts and in the revenue. Democrats are bringing back the wildly popular Buffett Rule and sparking the debate on fairness again - after all what American isn't for making the uber wealthy pay at least the same tax rate as their secretary? Hell, even Ronald Reagan was for it. Democrats are adding to that a tar sands oil tax - jogging the memory of the BP oil spill - and targeting one of the most reviled industries ever - the oil barons.
The remaining $55 billion would come from $27.5 billion in defense cuts from 2015 to 2021 and $27.5 billion in farm-subsidy cuts.
Then the cuts. Half of it comes from defense, as usual (but this would see the defense cuts for the year reduced by 75% - half the cuts are replaced by revenue, as above, and only half of the remaining half is defense). But other half, that comes from domestic spending - the GOP's favorite pinata, would come out of subsidies afforded to big agrabusiness.
Republicans are calling this political positioning by the Democrats, and they're right. But this is an important bluff. This is a proposal that does some very significant things: first, it reiterates that Democrats and the president will not accept GOP alternatives that force deeper cuts into domestic programs and the social safety net in order to save the Defense budget from the sequester. Second, it keeps the debate on both the need for additional revenue and smart spending reductions. Third, it reinvigorates a tax debate progressives and the president have already won on the fairness of the tax code. Last but not least, this is another nail in the coffin of the Republican argument that it's Democrats who aren't willing to offer alternatives to avert the sequestration.
All of it puts Republicans in a very uncomfortable position. As long as Democrats keep offering reasonable packages, they are seen as the adults trying to work, and the Republicans simply as obstructionists. As long as Republicans won't accept a balanced approach, they can be blamed for letting the sequester go into effect. The word from Republicans in the beltway is that letting Americans feel some of the pain of the sequester will have the effect of people pressuring Congress to follow the Republican alternative to it, which is shredding the safety net. In reality, it will have the opposite effect. It will have the effect of industry and organized public pressure on the Republicans to cave, once again.