Saturday, November 10, 2012

Say no to tax increases

Mitt Romney’s concession speech had barely finished before Democrats and the MSM (Main Stream Media) starting in saying Republicans should “compromise” and agree to tax hikes in exchange for spending cuts. One thing is clear. WASHINGTON DOES NOT HAVE A REVENUE PROBLEM. Since WWII tax revenues have remained constant between 15 and 20% of GDP. We are at the upper end of that range now.

I believe under no circumstances should the Republican Party agree to a tax increase. But, why should we be so absolute on this issue? There are some good reasons to be so dogmatic.

One reason that is not acceptable is Party politics. I believe in what is best for America.

The deficit is a huge problem. Increasing taxes in this recession, realizing I use this term loosely, is going to further damage a weak and ailing economy. Obama would have us believe we should just tax the rich. We understand any tax takes money from the free market system and is subject to the Elasticity of taxes. We are not a group that believes in the class warfare of tax the rich.

Tax revenues being proposed as part of tax the rich are symbolic at best, as they will not raise significant revenue as compared to the scope of the issue. For instance the “Buffet” rule to raise taxes on the rich would only raise enough revenue in the best of circumstances to cover 3% of the budget shortfall, not the entire budget, just the deficit. At worst they will hurt economic growth and compound the problem.

The deficit is a mess. We got into this deficit not from tax cuts but from massive spending. It is the spending that should be cut.

If the Republicans were to do what the MSM and the Democrats want them to do, compromise and agree to raise taxes in exchange for spending cuts, do you know what that deal would look like?

There would be immediate tax increases on the American people. What form these tax increases would take is up for discussion. It could be elimination of the Bush tax cuts. It could be having the brackets and rates raised.

It could be elimination of loopholes. This we should accept if, and only if, it comes with the lowering of the rates to make the proposal revenue neutral. Any proposal which simplifies the tax code without raising taxes is a positive step forward.

Once the deal was set for the immediate imposition of tax hikes, spending hikes would be proposed. Any spending cut for this year would be insignificant at best. The rest of the spending cuts would be spaced out over the next five to ten years.

As soon as the deal was consummated, the Democrats would do the photo op with the Republicans announcing their grand bargain. Then, as soon as the campaign began, they would run against the Republicans for raising taxes.

And those spending cuts? They would never happen.

Any spending cut that is not immediate is not a spending cut. The Congress that meets in 2014 is not obligated to honor the spending cuts imposed by the Congress of 2013.

Politicians of both parties love deals that give them more money. They also love deals that cut spending in the future. The problem is, those future spending cuts never take place.

If the American people accept such a deal, they will end up like Charlie Brown. As he runs up to the football for the hundredth time, Lucy will once again pull the football away from him.

In Washington, it is standard fare for the politicians to insist on a deal where they get what they want immediately and the push the pain of their actions to some unspecified tomorrow. The only problem is tomorrow never comes.

Politicians are not serious about cutting spending. They simply want more tax money to spend.

If we want to begin to take back America we must resist the partisan politics of tax the rich. We must realize spending must be reduced and some of those cuts may come to our favorite programs. However, we must stick to our principals and understand the Constitution is the foundation of this country. Much of this spending is quite simply spending which the Federal government should not have started in the first place. We realize persons have become dependent on this spending and need to recognize there will have to be a period of transition.

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