Here's Why Wall Street Won't Make The GOP Fix The Debt Ceiling

A blog about business and economics.
Oct. 3 2013 11:39 AM

Here's Why Wall Street Won't Make The GOP Fix The Debt Ceiling

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The US Chamber of Commerce will always be there for tax cutters.

Photo by BRENDAN SMIALOWSKI/AFP/Getty Images

One of the White House's fondest hopes is that elements of the business community—especially including but by no means limited to the major Wall Street firms—will force Republicans to come to their senses on the question of the debt ceiling. It won't work.

Think about it this way: The main thing business groups want all the time is lower personal income taxes on business executives. Business groups, after all, are controlled by businessmen. And businessmen, like all people, really dislike paying taxes. So the debt ceiling will either be raised by October 20 or it won't, and the consequences of that will either be disastrous or they won't, and either way by the time kids go trick-or-treating whatever's happened will have happened.

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And at that point it will still be the case that people don't like paying taxes. It will still be the case that because making rich people pay higher taxes is popular Democrats will be calling for that. It will still be the case that rich businessmen are people, and that like all people they don't want to pay more taxes. Republicans will have their back on that. And businessmen will be happy about that. They'll be grateful. And most of them will back Republicans, just as they always do. The businessmen know that. And the Republicans know that. So it doesn't matter whether businessmen think Republicans are being crazy and irresponsible now. They may beg and plead or do whatever. They may even be sincere. But come November 2014 there will be one party arguing for higher taxes on rich businessmen and rich businessmen and the firms and trade associations they control will be backing that party. There's no leverage here.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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