The Tax Bill, enacted into law on January 1, 2013, permanently enshrines higher tax rates on hard-working successful individuals. The higher rates affect the top 1% of households, the so-called millionaires and billionaires whose taxable income exceeds $400,000 for individuals and $450,000 for families, who will pay higher rates on labor income, dividends, and capital gains.
Moreover, the endless prattling about the need and desire for comprehensive tax reform--a broader base in exchange for lower rates--will not be in the cards until 2017 at the earliest. President Obama will not agree to any deal that lowers the new higher rates he achieved.
What's next in the battle of ideas between liberal and conservative think tanks? The biggest issue is the scope and size of the public sector, whether it remains at, or even increases beyond, its current high level of 24-25% of GDP, or reducing it back to its historical level of 20%. Ditto on curtailing annual budget deficits and stabilizing the public debt.
Will conservatives score the equalizer or fall further behind? From today's vantage point, this could be a long year for conservative thinkers, especially with a large split in the Republican ranks.