Morning Must-Read: James Kwak: Tax Policy Revisionism

James Kwak: Tax Policy Revisionism: “In an otherwise unobjectionable article…

…the generally excellent David Leonhardt wrote… In the 1950s, the top rate exceeded 90 percent. Today, it is 39.6 percent, and only because President Obama finally won a yearslong battle with Republicans in early 2013 to increase it from 35 percent.”… The 39.6 percent tax rate… was lowered to 35 percent by the 2001 Bush tax cut, which had a sunset provision at the end of 2010…. The 35 percent rate was then extended for two years by the December 2010 tax cut, which was supported by President Obama…. It finally expired on January 1, 2013, at which point the 39.6 percent rate reappeared in its original form. A few hours later, Congress passed a new tax cut for just about everyone, except households with income over $450,000, who were left with the 39.6 percent rate…. President Obama didn’t fight a battle with Republicans. He fought a battle with himself. In 2010 and 2012 he could have restored the top tax rate to 39.6 percent simply by doing nothing and letting the Bush tax cuts expire. The January 2013 tax bill also locked in big tax preferences for capital gains and dividends…. President Obama talks a good game when it comes to inequality, but he hasn’t backed it up…. [In] tax policy, his main impact has been to make permanent most of the inequality-increasing tax cuts that were his predecessor’s most treasured legacy.