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The Republicans Should Just Let Obama Take America Off Of the Cliff
Forbes ^ | 12/13/2012 | Louis Woodhill

Posted on 12/13/2012 7:13:25 AM PST by SeekAndFind

For the good of the country and the survival of the Republican Party, the GOP must allow President Obama to take America off the so-called “fiscal cliff” on January 1.

Given the intransigent position that Obama has taken on raising marginal tax rates, any deal that the Republicans in the House of Representatives could conceivably make with him before the end of the year would be counterproductive. It would impede economic growth, and thereby actually reduce the present value of future federal revenues. Such a deal would also further damage the Republican “brand”, which has been trashed by the “clueless conservatism” of practically every Republican leader since Ronald Reagan.

But wait! Doesn’t Obama have a mandate to raise taxes? No, he does not.

In the recent election, the electorate was perfectly capable of giving the Democrats control of the House of Representatives if this is what they wanted. They did so as recently as 2008. When the voters gave the House back to the Republicans in 2010, and left it with them in November, they did so for a reason.

The electorate, as a whole, understands economics. It therefore understands that what matters is the present value of future federal revenues. It is the present value of tax revenues, not the tax revenues in the current fiscal year or tax rates, that the financial markets care about. If raising tax rates could solve the financial problems of governments, Greece and Spain would be thriving right now.

Anyone with a copy of Microsoft Excel can demonstrate that America’s rate of economic growth has infinitely more impact on the present value of future government revenues that does the share of GDP that the tax system captures.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: fiscalcliff; gop; obama; taxes

1 posted on 12/13/2012 7:13:27 AM PST by SeekAndFind
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To: SeekAndFind

Nice article, overall.

Unfortunately, my faith in the Republican party’s ability to stop being “the party of stupid” is rather low right now.


2 posted on 12/13/2012 7:27:56 AM PST by ArGee (Reality - what a concept.)
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To: SeekAndFind

I am personally affected by the fiscal cliff, I fear. My husband works for a defense contractor. If they lose contracts and must have layoffs due to the fiscal cliff, my husband’s job is at risk. He is a couple of years away from retirement. We are very screwed if he gets the axe.

I am very disturbed the “how bad could it be? let’s just give up” attitude. It could always be much worse than anticipated.

Fight for sanity, responsibility, etc. We have to be the grown-ups, because a place with no grown-ups left at all is not a good place to be.


3 posted on 12/13/2012 7:33:05 AM PST by married21
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To: SeekAndFind
For the good of the country and the survival of the Republican Party, the GOP must allow President Obama to take America off the so-called “fiscal cliff” on January 1.

The "tax and spend" Democrats always want to raise taxes. The Democrats are pretending to care about the middle class, but all they want are increased taxes. Those who do not pay taxes also do not care; they would love for the "rich" to get theirs. Most Democrat voters do not even know who the rich are, or anything about the "rich." Anyone with a good job, who owns a house is "rich."

If the Democrats can convince Republicans to agree that the rich are not paying their "fair share." Then the Democrats have it made. Free enterprise is dead.

It would be utter nonsense for the Republicans to support increasing taxes on anybody. Once they compromise on what they are identified by, then they are identified by nothing.

4 posted on 12/13/2012 7:36:54 AM PST by olezip
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To: ArGee

The Geriatric Old Plotters are not stupid, they are accomplices.


5 posted on 12/13/2012 7:50:39 AM PST by Psalm 144 (Capitol to the districts: "May the odds be ever in your favor.")
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To: SeekAndFind
Boehner can let the Democrats do it, with the help of a few RINO Republicans. Then when we've avoided the Fiscal Cliff and plunge in to the Fiscal Abyss -- it's Zero and the Democrats. (I know, I know, it will always be the Republican's fault and George Bush's fault. But I still have this hope that 2% of the country will eventually come to its senses.)


6 posted on 12/13/2012 7:54:57 AM PST by Sooth2222 ("Suppose you were an idiot. And suppose you were a member of congress. But I repeat myself." M.Twain)
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To: SeekAndFind

The power to tax is the power to destroy.

Taxes are, at their very heart, destructive in nature. Capital is reduced, or even thwarted from even forming, because of taxation. A dollar taken by taxation, is by necessity not available to acquire the means of further production.

The very basis of the growth of civilization is the accumulation of various kinds of capital. Financial capital, intellectual capital, moral capital, even political capital. And all grow the same way. The result of interaction with others is expressed as providing something of value to each participant of a transaction, and using the proceeds of that transaction to build up a base for further transactions. Certain rules apply to all forms of capital, in first, that there must either be a conntinuing accumulation, or the accumulation is being devoured by the demands being put upon it. The growth in the accumulation is rightly called “profit” in terms of financial capital, “learning” in terms of intellectual capital, “bliss” in terms of moral capital, and “influence” in terms of political capital.

All are subject to being squandered, and often are, through waste, ignorance, malice and arrogance. And once gone, it is difficult to regroup and re-establish the rules in an orderly and decorous manner. Thus we have something akin to the “Dark Ages”, when learning was in decline, evil was rampant, and strongmen ruled the meek and powerless. Needless to say, it was also a time when mankind itself was in decline, with entire regions reverting to its prior untamed natural state, misery and early death were constant companions, and actual numbers of humanity were also decreasing.

Then something happened. Variously called “Enlightenment”, or “Renaissance”, or the “Awakening”, a sufficient number of mankind rediscovered the old rules, and applied them again. Exploration of the neighboring parts of the world, expansion into new territory, search for intellectual pursuit, introspection into self, and the urge to do well by one’s fellow man (and incidentally for one’s own self), became the guiding principles of that world, and in the midst of this renewed spirit, the ideals that guided America were born. The old hierarchy was called into question, while greater and greater autonomy and individualism were increasingly rewarded. So much so, that the very concept of taxation was called into question, and tied to at least having some kind of representation when any taxes are suggested or assessed.

Taxation has been one of the most vexing of problems for mankind. Imposing taxes to pay for the common good has been the sticking point, with various schemes that have been dreamed up, either to hide the levy being placed on the populace, or to spread the burden of paying the taxes around more or less equitably.

Disputes over taxation, or the means by which governments acquire and disburse the necessary funds to run the operations of the government, have led to endless conflict over the eons. The question of what governments should even do, has been a source of disagreement between those who wanted “the government” to do more, and those who want little or no interference in how they conduct their daily transactions. The original draft of the US Constitution did an excellent job of defining which of these powers may be asserted, with the disclaimer that powers not enumerated as the responsibility of the Federal level of government are reserved to the various lesser levels of government, or to the people themselves.

Two real things are going on, right now, with this “fiscal cliff” we are facing. First, how much of the individual’s personal goods and services are owed to the tax collecter? And secondly, how much should the government supply to satisfy the needs and wants of its citizens (and supposedly, informed participants)?

Personal responsibility, and living with the consequences of failure to take even minimum effort to maintain good personal behavior, are obviously not in the best interests of any government to involve themselves with. And yet they have, which is the very definition of creating dependency. Dependents, by their very nature, are not contributors to the greater good. Dependency should be, for most instances, terminated once the individual has regained the means to reassert personal responsibility.

If you are not part of the solution, you are part of the problem.


7 posted on 12/13/2012 8:15:25 AM PST by alloysteel (Bronco Bama - the cowboy who whooped up and widened the stampede.)
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To: SeekAndFind

The Republicans under Boehner have rolled over for four years now. I doubt anyone will be surprised if they roll over again. They are co-dependents.


8 posted on 12/13/2012 8:46:18 AM PST by yefragetuwrabrumuy (Pennies and Nickels will NO LONGER be Minted as of 1/1/13 - Tim Geithner, US Treasury Sect)
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To: alloysteel
We have a conundrum. The public wants all of the benefits the welfare state has to offer but doesn't want to pay the bill. Mark Steyn nailed it:

A few months ago, I dined with a (pardon my English) French intellectual who, apropos Mitt Romney's stump-speech warnings that we were on a one-way ticket to Continental-sized dependency, chortled to me, "Americans love Big Government as much as Europeans. The only difference is that Americans refuse to admit it."

My Gallic charmer is on to something. According to the most recent (2009) OECD statistics: Government expenditures per person in France, $18,866.00; in the United States, $19,266.00. That's adjusted for purchasing-power parity, and, yes, no comparison is perfect, but did you ever think the difference between America and the cheese-eating surrender monkeys would come down to quibbling over the fine print?

Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune: Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent, and revenues are 41 percent – a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent – the widest spending/taxing gulf in any major economy.

So all the agonizing over our annual trillion-plus deficits overlooks the obvious solution: Given that we're spending like Norwegians, why don't we just pay Norwegian tax rates?

I say let's go back to the Clinton tax rates for everyone. The only way the public will understand the costs of the welfare state is to start having them pay for it.

9 posted on 12/13/2012 9:16:31 AM PST by kabar
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To: ArGee
"the Republican party’s ability to stop being “the party of stupid” is rather low right now."

Quite right. They are so stupid that they couldn't organize a party in a brothel, and so inept at marketing that they couldn't advertize it as an upcoming event.

10 posted on 12/13/2012 9:27:43 AM PST by I am Richard Brandon
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