Tyler Cowen's modest proposal for an imaginary GOP

Tyler Cowen would have Republicans shake up the tax debate by proposing a tiny across-the-board income tax hike in addition to the moderate tax hike for the wealthy proposed by President Obama. Further tax hikes would then kick in automatically as (or if) spending rises. He regards this direction for tax reform as fairer and more sustainable than current proposals, as everyone would feel the effects of "paying" for whatever level of social services and other spending we collectively undertake. Here's the meat of it:

To see how this could work, consider this script: Let’s say the Republicans decide to largely give in to what the President Obama is proposing. There is, however, a catch: the president has to agree to raise marginal tax rates on all income classes, not just on the rich. The tax increase would be one-quarter of a percentage point, or some other arbitrary small amount, with larger increases possible for higher incomes, as has been discussed. The deal also stipulates that both the president and Congress must publicly acknowledge that current plans for government spending can’t be financed unless taxes on most or all income groups climb further yet, and by some hefty amount. 

Dark matter in John Boehner's pool

John Boehner used some revealing language in his press conference today to defend the Plan B that his caucus refused to support yesterday. In Republicanspeak, Boehner is champion of the 99%:

Listen, there was a perception created that that vote last night was going to increase taxes. Now, I disagree with that characterization of the bill. but that impression was out there. and we had a number of our members who just really didn't want to be perceived as having to raise taxes. That was the real issue. now, one of my colleagues the other night had an analogy of 100 people drowning in a pool, and then he was the lifeguard. and because he couldn't save any of them, does that mean he shouldn't have done anything? His point to them is, if I can go in there and save 99 people that are drowning, that's what I should do as a lifeguard. but the perception was out there, and a lot of our members did not want to have to deal with it.

It's no secret that in addition to cutting taxes for the wealthiest Americans by leaving most of the goodies in the Bush tax cuts intact, Plan B would  raise taxes on most Americans, and raise them substantially for low-income Americans, by letting the Obama tax cuts enacted in 2009 expire. The Center for Budget and Policy Priorities summarizes: