11/12/2012 02:22 pm ET Updated Jan 12, 2013

Closing Loopholes, Not Raising Rates, to Tax the Wealthy? I Smell a RepubliCON

By letting the Bush tax-cuts expire for income over $250,000, the American people can add $70B annually -- or, since we now speak in budget-decade, $700B -- to its coffers. If we also reinstated the inheritance taxes to pre-Bush tax-cut levels, adjusting the baseline for inflation, we take in another $500B per decade.

So, faster than one can say "K Street," we have identified $1.2 Trillion in reduced debt. [We can generate another $1.5 Trillion with a 0.5 percent tax on financial transactions, but that is outside the Bush tax-cut discussion].

Let us note that the inheritance taxes impact less than 0.5 percent of the population, and the expiration of the Bush tax-cuts on incomes over $250,000 provides a tax-cut for everyone on the first $250,000.

Let us also remind ourselves that the Bush tax-cuts were designed to expire for a simple reason: their impact on the deficit. Indeed, Minority Leader Mitch McConnell (R-KY) and many of his colleagues voted for the tax cuts and for their expiration.

Republicans have suggested that they would prefer to capture that $700B by closing loopholes, rather than raising tax rates back to the Clinton economy levels. Of course, they never say $700B, they just hint that they would increase revenues by closing loopholes.

But, let us give our wayward sisters the benefit of the doubt. Suppose they sincerely would agree to close enough loopholes that impact only the wealthy to raise that same $700B from increase taxes paid, but not increased rates, by the top 1 percent.

They appear to be adamant against raising the rates to achieve the same revenues, so adamant that they will hold the entire middle class hostage, and allow all the Bush tax-cuts to expire.

One has to ask the obvious question: Why? What is the difference between getting another, say, $400K in taxes from a top 1 percent taxpayer from closing loopholes vs. that same $400K by raising tax rates by a whopping 4.6 percent? If they try to claim "job-creation," just recall 1993 and the sky-is-falling scenarios they painted then.

One's first impulse is to blame Grover Norquist. But, imperious though he may be, Norquist makes no distinction between loophole closing and rate raising or, for that matter, ending subsidies -- in his world, each would have to be offset by at least an equal amount of spending cuts.

Enter, K Street.

The only plausible explanation for this seemingly odd place to draw a line in the sand is that they all know that their lobbyists will very easily reinsert their loopholes into the tax code over time. That is much easier than snookering the country again into believing that tax-cuts pay for themselves and that they stimulate job-creation.

Just drop into an omnibus bill an amendment that is arcane and seems innocuous, and, faster than they can tie their Gucci shoelaces, presto(!) that tax increase has disappeared.

I smell a RepuliCON....