It is no secret that I am not a fan of the Democrat PAYGO rule that requires any bill affecting mandatory spending or revenue to be deficit neutral. In theory PAYGO sounds great, but at the heart of it, the Democrat rule is nothing more than a gimmick.
House Democrats, especially members of the “Blue Dog Coalition”, claim that they will not waive PAYGO for any reason, their recent actions have indicated otherwise.
In preparing the supplemental appropriations bill, Democrat leaders are reportedly planning on including billions of dollars in mandatory spending that would normally be subject to PAYGO, but recent reports indicate that they plan to circumvent PAYGO in order to enact proposals that could cost anywhere between $30 and $70 billion.
However, they are not willing to waive PAYGO to extend numerous expired and expiring tax provisions, including:
- The Research and Development Tax Credit
- Subpart F for active financing income
- Depreciation of restaurant equipment
- Credit for residential and commercial solar property
- Credit for electricity from renewable sources
- Credit for energy efficient homes and commercial buildings
- Credit for energy efficient appliances
- State and local sales tax deductibility
- Deduction for teachers’ classroom expenses
Collectively, these tax provisions which expired at the end of 2007 or will expire in 2008 will result in a tax increase of $102.6 billion through fiscal year 2008.
Democrats are using this gimmick for cheap political theater, and will jump at their first chance to circumvent it in order to raise your taxes.
Join the conversation as a VIP Member