Skip to comments.WHO’S AFRAID OF THE FISCAL CLIFF? (Patrick J. Buchanan)
Posted on 11/27/2012 9:35:36 PM PST by neverdem
Were the average Republican asked for a succinct statement of his views on taxation, he or she might respond thus:
“U.S. tax rates are too high for the world we must compete in. The tax burden — federal, state, local, together — is too heavy. We need to cut tax rates to free up our private and productive sector and pull this economy out of the ditch.”
This core conviction holds the party together.
Yet today the leadership is about to abandon this conviction to sign on to higher tax rates or revenues, while the economy is nearing stall speed. Yet, two years ago, President Obama himself extended the Bush tax cuts because, he said, you do not raise taxes in a recovering economy.
Why are Republicans negotiating this capitulation?
Because they have been warned that if they do not sign on to a tax hike, they will take us all over a fiscal cliff.
If we go over, Republicans are being told, you will be responsible for tax hikes on all Americans as the Bush tax cuts expire on Jan. 1.
You will be responsible for a surge in tax rates on dividends, interest, capital gains, estates.
You will be responsible for an automatic sequester catastrophic to the national defense.
This is the pistol Obama is pointing at the GOP. This is extortion.
The Debunker asks: Should the GOP cave on tax hikes?
Republicans are being told that they either vote for something they believe to be wrong and ruinous — or get something worse. Pay the ransom, fellas, Obama is demanding, or take the blame for a second recession.
Like the Panama Canal debate that made Ronald Reagan a hero, this is a defining moment. No GOP senator who agreed to the Carter-Torrijos treaty ever made it onto a national ticket.
What are the perils for Republicans who sign on to an Obama deal?
They will sever themselves permanently from much of the base of the party. While their votes may ensure that tax rates or revenues rise, they will have no assurance that the promised spending cuts will ever be made. Even Reagan fell victim to this bait-and-switch.
Then, if the tax hikes slow the economy, Republican collaborators will share the blame. Not only will they have gone back on their word, they will have damaged the recovery. What would be their argument for re-election?
If you believe higher tax rates or tax revenues would be like poisoning an already weak economy, why would you collaborate in administering that poison? Why not just say no?
Having lost the presidency and seats in both houses, Republicans should not partner with a president with whom they disagree on principle.
They should act as the loyal opposition in a parliamentary system whose duty it is to oppose, to offer an alternative agenda and to wait upon the success or failure of the government, as Labor is doing in Britain and the conservatives are doing in France.
What should Speaker John Boehner do?
Tell the president politely that America’s problem is not that we are taxed too little but that we spend too much — and the GOP will not sign on either to tax rate or tax revenue increases. For Republicans believe that would further injure the economy — especially an economy limping along at between 1 and 2 percent growth.
Then Boehner should depart the White House, go back up to the Hill and urge his Republican caucus to do two things.
Pass an extension of the Social Security payroll tax cut and block its automatic rise from 4.2 percent of wages to 6.2 percent. To raise that tax now and scoop off the discretionary income of most of America’s families in this anemic economy makes no sense economically or politically.
The House should then vote to extend the Bush tax cuts for another year, with a pledge to do tax reform — lowering tax rates in return for culling, cutting or capping deductions for the well-to-do in the new year.
Then let Harry Reid work his will. If the Senate votes to let Social Security taxes rise, let Harry and his party explain this to the middle class that gets hammered in January. If the Senate votes to let the Bush tax cuts lapse for those over $200,000, decide in the caucus whether to negotiate — or to go home for Christmas and New Year’s.
As for the automatic sequester that would impose $100 billion in cuts next year, half in defense, do nothing. Let it take effect. The budget has to be cut, and while these cuts are heavy on defense, the depth and mixture can be adjusted in the new year.
If Republicans walk away from tax negotiations with the White House, market investors, anticipating a sharp rise in tax rates on dividends, interest and capital gains next year, will start dumping stocks, bonds and investments to take advantage of the last year of lower taxes.
The market may tank. Let the party of high taxes explain it.
I have a theory that the Dems and the Pubbies have us pushed to the edge of the Fiscal Cliff, and we are backing up toward them while getting the Royal Screw Job!
Forward or Back?
The house should vote “present”...let the Senate decide....
Our kids will lead the rebellion!
if we don’t force WashDC to CUT taxes substantially, and quickly, this recession could easily descend into a genuine depression
We need to cut SPENDING first and foremost!
While some argue that going over the cliff gives a total win to the Democrats, they get both higher taxes on the rich and big Defense cuts, I agree we need to stand on principle this time and very forcefully focus the light on Democrats for the tax hit on the middle class - hopefully bringing a lot more people into the role of paying federal income tax. Too many currently have nothing in the game, and the fiscal cliff may be what it takes to get them back in. Those that voted for Zero or sat it out have no one else to blame, it could all have been avoided with some fiscal responsibility from the White House.
We need this degree of drama from some quarter to raise morale. We who are in shock are doing nothing, really, and are leaderless, left basically complying and cooperating, paying our taxes and fees, pounding our keyboards, but offering no real resistance. Yet.
They’ll all be on vacation in a week.
Nothing will be done to stop the fiscal cliff.
When they return all fat and rested the blame game will commence.
We get screwed, they laugh.
I’d be happy if Boehner just went home and refused any contact from the White Hut...
>>mylife - Forward or Back?
Does it really matter which way we are getting screwed? I see no hope either way. The only difference may be the timing of the fiscal implosion. The "automatic sequester" is only a delay tactic at best. Those who delay preparing now for the inevitable outcome will have only themselves to blame.
That is the crux of my theory.
All this for measly $100 Billion in cuts? In a year when spending was what, bout $3.5 Trillion? This is madness this talk of a “Fiscal Cliff.” It is nothing of the sort. Including the Defense cuts.
Going over the cliff mans that 40% will not pay taxes instead of 47%. Increasing taxes on the top 2% only will make it impossible to ever shift the burden again.
Can you imagine proposing a tax hike on the middle class only or a cut for the rich only?
I have no illusions about the ability of either party to Defend this country from our enemies...
A small business owner needs to write an article detailing in dollars and cents of raising tax rates on "the rich" and the affects on his/her business.
Two days ago I moved my entire portfolio into TAB municipal bonds. (I was aggressively positioned with 70% stocks because I am still fairly young.) I don’t know much about finance, but I do know nothing good can come out of the next 4 years. I am just hoping to outlast the insanity. I’m not optimistic about the Country’s fiscal future! But I’m from a long line of Louisiana rednecks. We have a little land and we know how to put meat on a fire, so I guess we’ll be ok.
In order to halt or fix the problem, they need to not have "lowered rates of increase", and they need to not "cut 5%", they needs the CUTS OF THE APOCALYPSE! Medicare part D, Dept energy, Dept education, Homeland Security, TSA, large swaths of welfare need to just go away. 5-10% from military, and separate UNTOUCHABLE depository for social security.
The ONLY reason that either party wants to "tweak" it like is written of in the media is so they can continue to BORROW and
-----> SPEND MORE, <-----.
If you gave the politicians EVERY tax hike they wanted the deficit would not go down a penny BECAUSE THEY WOULD SPEND IT!
Government needs to get it through it's head that through some way shape or form we are going to starve it into submission...