Posted on 12/21/2012 3:13:14 PM PST by SeekAndFind
When you lose an election you get frustrated. When you’re sitting in a subpar 2 percent economy, and are faced with tax hikes rather than marginal rate reductions, you get even more frustrated. And when you’re staring at $47 trillion in spending over the next ten years, and $8.6 trillion in deficits, your frustration levels climb even higher.
These are among the frustrations that led a number of House Republicans to pull back from Speaker John Boehner’s so-called Plan B. Nobody looked good on the Republican side when Thursday night’s vote fell through. But you have to understand their frustrations. Losing an election is no fun.
I don’t blame John Boehner. His idea is the best compromise currently available. Or put another way, it’s the least-bad option out there. It was even backed by Paul Ryan and Grover Norquist.
There was the million-dollar threshold for letting the top tax rate expire and moving it back to 39.6 percent. All the other Bush tax rates remained the same. Capital gains and dividends would rise from 15 percent to only 20 percent. The estate tax would go to 35 percent, not 55 percent. And everything would be made permanent, unless and until real flat-tax reform by lowering rates and broadening the base took place.
No, there were not enough spending cuts in Plan B. But a couple hundred billion in spending cuts were inserted at the last minute.
Boehner figured that if the House passed Plan B, it could put pressure on President Obama and the Senate Democrats to raise taxes less and cut spending more. A couple dozen House conservatives wouldn’t buy it. I understand that. But I still think Boehner was on a noble mission in very difficult post-election circumstances.
The demise of Plan B almost certainly will prolong the fiscal-cliff negotiations, which will spill over into the new year. But I still believe this is a game where all the players are bluffing. Washington lawmakers will not risk a recession by allowing all the Bush tax cuts to expire, thus pulling $500 billion out of the economy, and by rolling back important economic-growth incentives. I just don’t believe it.
And if the negotiations go well into January, the Treasury Department and the IRS can stall any changes in withholding rates. Then a deal can be worked out that will extend the middle-class tax cuts up to a threshold of $250,000 to $400,000. Patching the AMT will be thrown in there, too. So will the so called “doc-reimbursement fix,” some kind of unemployment insurance, and some small leftover sequester spending cuts.
This will make no dent in our spending, borrowing, and debt problem. But at least it will avert a recession.
For the Republicans, the sooner they can get out from under this mess, and move on to tax, spending, and entitlement reform, the better off they’ll be. And for Heaven’s sake, let’s finally cut the corporate tax rate. But for now, it’s time for a strategic retreat, as the economy teeters over the cliff.
One final thought: In a post January 1 scenario, after Washington has temporarily gone over the cliff and all the tax rates have gone up, any bill that restores the Bush tax cuts actually becomes a bill to cut tax rates, not raise them or stop them from rising. That’s a much better dynamic for the GOP’s strategic retreat.
But alas, real reforms for taxes, spending, and entitlements, and real fiscal solvency, and real economic-growth prosperity, still seem very far away.
– Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.
...Conservatives don't DO tax increases and don't DO class warfare...FRIGGIN PERIOD!!!
Kissa mah ass!!!
Pass an 18% flat tax. Throw it out there and see what happens. Let the media get into the weeds of the details.
When they say that it will not reduce the deficit. Say that we are looking for leadership on reducing expenditures. Pose - What percentage of a person’s income should go to taxes?
Hey the rich voted for Obama. They want their taxes raised. Let them have it good and hard. The public wants... it everyone wants it. For conservatives to fight this battle for folks who don’t want their help is beyond stupid.
We’re NOT in a recession NOW?
Who knew?
I’m always the last to know.
Plan B was bad, but rejecting it simply means a worse option will eventually pass through the House - it will just be done with mostly Democrat votes instead.
The problem with Boehner is that he is NOT part of the solution. He can’ be... he is not equipped to be. I’m sure he has his talents, but leadership is not one; ability to dream up and then make bold strokes to fiscal health to attack the spending not his forte.
RE: Hey the rich voted for Obama.
Is there a reliable poll that tells us that?
RE: We’re NOT in a recession NOW?
A recession is officially defined as two consecutive quarters of negative GDP growth.
Our GDP growth might be very little, but it has not been negative for 2 years.
A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners
Nothing is preventing these millionaires from sending more money to
The IRS. They can write and make a donation today if it makes them feel
better.
Nothing is preventing these millionaires from sending more money to
The IRS. They can write and make a donation today if it makes them feel
better.
Funny thing, when these m/billionaires DO give away their money, they don’t show their faith in an all-wise federal government. Nope. The substitute their own selfish judgement of what constitutes a good use of their resources.
Fighting for the tax rates of a bunch of rich Obama voters makes as much sense as fighting for freedom in a Muslim country. They don’t want our help and aren’t worth the effort anyway.
RE: A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income.
What about those earning BELOW $1 Million in income (a huge number of small businessmen )?
RE: Your post...
Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners
In this case, Boehner ought to submit PLAN C, Raise the rates of those making $5 Million or more. That is more in line with the survey results.
I think plan B is a million and up.
RE: I think plan B is a million and up.
I am not talking about PLAN B ( it is already dead ).
I am referring to the poll you referred to where 61% of those making $5 Million and up want taxes raised.
So, I say a PLAN C is in order, raising taxes for those making 5 Million and up ACCORDING TO THEIR WISHES.
And Boehner can refer to the poll you just showed in presenting that.
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