Re: Max Baucus and Dave Camp: Tax Reform Is Very Much Alive and Doable – WSJ.com.
Senator Max Baucus and Representative Dave Camp:
Write on the chalkboard, one million times: “If we don’t cut spending, tax reform doesn’t matter.”
After you complete that task, write this one a billion times: “Tax reform rhetoric is a coward’s way of evading the hard duty of spending cuts.”
After that is done, you may go outside and join the other kids at recess.
I guess it depends on the WSJ headline writer’s definition of “offer”.
Obama’s Cliff Offer Spurned : GOP Criticizes Proposal for Tax, Spending Increases With Limited Entitlement Cuts
via GOP Rejects Cliff Offer From Obama – WSJ.com.
For example:
And yes, I suppose in a manner of speaking Obama could be said to have offered limited entitlement cuts. He also offered limited tax and spending increases, but only in the sense that he didn’t explicitly use the word “infinite.”
Republican governors, eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases, a significant political shift that could soon bring an end to tax-free sales on the Internet.
via Tax Break Online Nears End – WSJ.com.
I’m not opposed to taxes on internet sales. It’s only fair to level the playing field between brick-and-mortar stores and those where the customer doesn’t get to handle the merchandise.
However, this proposal is not ready for prime time.
For one thing, the governors have not yet identified which taxes will be cut to pay for these increases. New revenue is fine, but old revenue needs to be cut to pay for it.
The other is that a formula and mechanism needs to be worked out to determine the tax rate. In order to maintain tax competition between states, one possibility is to make it an average of three tax rates: 1) the tax rate where the buyer lives. 2) the tax rate where the seller is located. 3) the tax rate where the goods are shipped from.
This is what I wrote in response to Stephen Moore and Richard Vedder’s article, “Higher Taxes won’t Reduce the Deficit : History shows that when Congress gets more revenue, the pols spend it.”
The only way tax increases MIGHT work is if Congress first shows that it knows how to cut spending. Zero out NPR funding on budgetary and First Amendment grounds. Repeal ObamaCare. Eliminate ag subsidies, ethanol subsidies, wind generation subsidies, and corporate welfare in general. Cut the budget for Congressional staffs and White House staffs in half. (I’d prefer to give Members of Congress healthy increases in pay and pensions, though.)
This isn’t going to deal with the problem of entitlements, but it is going to give Congress some much-needed practice in making cuts. It will give Congress a chance to prove that it knows how to do it.
Then, after it obtains a Constitutional amendment for Congressional term limits (it needn’t consist of drastic limits) we might talk about tax increases, if we can find a way to pay for them. Until then Congress has a lot of other work to do to have any kind of credibility at all.
If Congress can’t get those preliminaries done, there is no point in raising taxes.
Reuters: “Obama favors renewing the tax cuts only for those at or below those level, saying the nation cannot afford to renew them for wealthier Americans.”
So the President who wasted a trillion dollars of our money now says we can’t afford not to tax more. It’s like a guy coming back from Vegas after blowing the family savings plus whatever he could put on credit, and telling his wife that they can’t afford gas for the car to take her to work.
Someone commented on the WSJ editorial, “A Deficit of Nerve : Obama’s commission has ideas that Republicans can use,” saying that many of the proposed budget cuts will kill people. My response:
Not making those cuts will kill people, too. Millions of lives could be at stake.
If we now have the histronics out of the way, maybe we can get down to serious discussion.
I agree with the editorial writers that there is much in the draft outline to build on. They makes the point that Canada doesn’t have a home mortgage interest deduction, yet has a higher rate of home ownership than we have. If this deduction can’t be zeroed out, I don’t know why it shouldn’t be reduced to say, $100,000 instead of the $500,000 suggested in the commission’s draft.
I also wish the commission had tackled the issue of health care reform. But it seems there were some taboo topics. According to the editorial:
More egregiously, the chairmen tiptoe around ObamaCare, which has led some on the right and left to claim that the commission is essentially endorsing the largest new entitlement in 40 years. We’re told the chairmen mostly dodged the subject because Democrats on the commission made that a nonnegotiable demand. A truly bold report would consider Congressman Paul Ryan’s model to make Medicare a defined contribution program. Instead, the chairmen settle for the familiar likes of “payment reforms,” which never work because of Medicare’s flawed political price-control model.
On that subject I posted the following comment:
Back in April, when setting up this commission, President Obama said everything needs to be on the table. But now we learn that the Democrats on the commission wouldn’t allow any health care reforms to be put on the table. It was non-negotiable. If they couldn’t accept the job they were commissioned to do, shouldn’t they have declined to serve on the commission, or if it was too late for that, resigned?
On the subject of taxes, I’m surprised they want to make our tax system more regressive by increasing the social security tax, of all taxes.
But there is one other item that would do more to reduce the budget deficit than any of their other proposals. Term limits would bring under control the budget distortions brought about by the power of incumbency. These limits wouldn’t need to be severe term limits to be effective.
We need a slogan: No justice, no peace.
Oops. Wrong slogan. It should be: No term limits, no tax hikes.
I’d say that if we eliminate ag subsidies (aka the root of all evil), zero out funding for NPR, and get a constitutional amendment to institute term limits for Congress, then we can think about a tax increase to get us out of our hole. If members of Congress are term-limited, we will have a better basis for trusting that they might really use new revenues for deficit reduction. Otherewise, that part should be just as non-negotiable as the Democrats’ refusal to reform our health care system.
Somebody needs to tell AP writers Stephen Ohlemacher and Kevin Freking that there is an economic crisis in this country. There are other things to worry besides “cost to the government.” Cost to the economy and cost to the people, for example.
Republicans support a full renewal of all tax cuts, regardless of income, despite a 10-year cost to the government of about $700 billion above Obama’s plan.
___
Associated Press writers Stephen Ohlemacher and Kevin Freking contributed to this report.
There he goes again. President Obama is willing to give tax breaks to business but he can’t make himself cut tax rates. The poor guy (and those close to him) are like the old Soviet nomenkultura, as described by Michael Voslensky. They just had to have a “monopoly of decision making…on all important (and many unimportant) questions throughout the country.” (I just finished reading the book.)
President Obama says he is agnostic about keeping his campaign promises. That’s OK. I’ve been atheistic about him for a long time.
But here are some conditions before we even think about increasing taxes. These items should help offset the damage.
Otherwise there is little point.
This could end up being the equivalent of Jimmy Carter’s rabbit. I literally LOL’d when I got to this part.
Mr. Obama: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. . . .” (URL)