Too many conservatives getting it wrong on debt commission and taxes

When the Simpson-Bowles Obama Commission “chairman’s mark” came out last week, there were far too many conservatives who were too quick to say nice things about it. Blinded by lower marginal tax rates and some entitlement reforms, they chose to ignore the fact that the plan is a ten-year tax hike of over $1 trillion, and would saddle taxpayers with a taxes-to-GDP ratio of 21 percent, the highest in American history. A week later, the Rivlin-Domenici commission released their report with a $500 billion tax hike. Americans for Tax Reform actually produced our own (balanced) budget plan that cuts spending and cuts taxes in a reasonable way. But it’s worth reflecting on what too many on the Right said about the “higher taxes” plans for almost-balanced budgets.

To be sure, many conservatives got the story correct: Dan Mitchell, Chris Edwards, Keith Hennessey, and Michael Cannon, to name a few. But many others expressed a willingness to raise taxes for the political equivalent of a handful of magic beans.

Let’s start with the conservative publication of record, National Review. In an editorial about Simpson-Bowles, the editors said that the net tax hikes are fine since the code is simpler and rates are lower (though obviously not low enough to make up for the tax increases). NR editor Rich Lowry thinks that a record tax burden of 21 percent of GDP is just fine since the deficit goes down and taxes might be even higher than that someday. Yugoslavia’s Tito took a stronger stand against the Soviets during the Cold War.

This was echoed by Jim Pethokoukis of Reuters who wrote that “taxes probably need to be raised to get Democrats in Congress to approve other deficit-reducing measures that involve cutting spending.” In fact, the only way spending cuts are ever really put on the table is if tax hikes are taken off of it. Politicians will always spend at least as much as the new taxes take in, so higher taxes actually lead away from spending restraint, not toward it. Prior bipartisan budget deals (especially the 1990 Andrews Air Force base deal where President George H.W. Bush broke his “read my lips” pledge) always featured fake spending cuts and real tax hikes. They still do every year in state governments across America.

Supply-side icon Larry Kudlow said that the report was “on the right track” despite a hike in the capital gains tax, mostly because he falsely thinks tax deductions and credits are the exact same thing as spending money on people. Actually, letting people keep their own money is very different than putting them on welfare. Josh Barro of the Manhattan Institute would disagree, viewing higher taxes as acceptable assuming you grew the welfare state at least as much.

There were some plaudits from the Right that were just silly. The College Republican National Committee all but endorsed the plan because it “fixes” Social Security (in a way which raises taxes on younger workers and provides no Social Security personal accounts). I’d like to haggle with them at their next yard sale if that’s the negotiating tactics they bring to the table.

Mostly, though, the support parade came from a series of over-educated and politically-naïve free market economists. Cato’s Jagadeesh Gokhale completely ignores the net tax hike, falsely calling it “reform.” Bush-era Social Security czar Chuck Blahous (as usual) is mostly concerned with the Social Security benefits and revenues lines crossing again into “actuarial balance,” and chooses to view the much higher taxes as acceptable collateral damage. Former Bush aides Greg Mankiw and Glenn Hubbard, as well as the Mercatus Center’s Arnold Kling, couldn’t contain their excitement over the net income tax hike with the inadequately-lower rates.

  • kingfish

    Since the entire deficit is owed to the Federal Reserve, a PRIVATE bank owned by 13 elite mostly European families and the Rockefellers, and it was generated unconstitutionally by allowing the FED to print money rather than Treasury, the entire deficit should be WRITTEN OFF as a FRAUD against the people.

    That said, Congress DOES need to CUT SPENDING DRASTICALLY. The tea partiers should be the people on this “commission”. Bowles and Simpson are so old and with the “in-crowd” that they are “out of touch”. If I hear one more politician say they want to cut Social Security (a small monthly stipend for the seniors who paid into it all their lives), instead of the VAST WASTEFUL GOVERNMENT AGENCIES that never go away regardless of being obsolete, I will scream.

    Some things that could be slashed with no adverse effect on Americans:
    (1) Dept of Education (worked better at the State and County level – grades continue to deteriorate)

    (2) Homeland Security (REFUSES to do its job of securing the border or deporting illegals. Instead, spends taxpayers money suing AZ, harassing airline passengers, and sending notices to nationwide police departments that returning Vets, tea partiers, patriots, and those with anti-Obama stickers on their cars are TERRORISTS. Allows their agents to insist an airline put a panty-bomber on their airplane with no ID (Christmas bomber). FOSTERED BP poisoning of the Gulf and allowed the Coast Guard, now under their supervision, to cover up OIL, TOXIC OCEAN, TOXIC SEAFOOD, TOXIC AIR, CONTINUED COREXIT SPRAYING, and PEOPLE DYING. Napolitano should have been fired YEARS AGO!

    (3) The FBI and DOJ REFUSE to do their jobs of prosecuting Wall Street and big banks or investigate ForeclosureGate or Fannie/Freddie. The FBI covered up the Turkish Council and Israeli lesbian blackmail of Rep Jan Schakowsky that Sibel Edmonds testified about on Aug 8, 2009, and Schakowsky is STILL Chair of the House “Intelligence” Committee. The DOJ is just plain incompetent and fails to do its job altogether, despite Judicial Watch proof of coverup on the Black Panthers crime.
    DOJ spends taxpayer dollars suing AZ against Americans’ wishes.

    (4) Dept of Energy, which despite an oil crisis in 1972 has FAILED MISERABLY in turning the nation into an energy-efficient one in regard to housing and transportation. 100 years of future technology and medical cures for cancer THAT TAXPAYERS PAID FOR was handed over to military-industrial corporations who REFUSE TO GIVE THAT TECHNOLOGY TO THE PUBLIC. With the super-fast advancement of electronics, we should be driving spaceships by now, rather than the same oil-based cars at 25 mpg we were driving in the 50’s. Even electric cars (Volt) are old technology! Where are the air cars from Australia?

    (5) The wars should be ended and the Pentagon blasted for its use of hundreds of thousands of mercenaries like Halliburton, KBR, XE, etc. and for buying brand new trucks when a tire blows rather than stocking TIRES, and for their Israeli Pentagon comptroller losing over $4 trillion just prior to 911 (no investigation, no prosecution – definitely a coverup. The comptroller’s company manufactured remote control systems for planes), and for “losing” another $8 billion last year, and for “losing” planeloads of cash sent to Iraq, and for their ABJECT FAILURE (along with the Red Cross and Clinton/Bush fundraising — where did THAT money go?) to help Haiti in any way, shape or form. THE PENTAGON’S BUDGET SHOULD BE CUT FOR ALL THESE LOSSES IN THE FOLLOWING YEAR’S BUDGET. The Pentagon’s ever-expanding military bases, like the new one they’re planning in Columbia, should be SHUT DOWN and all those soldiers brought home to defend our own nation. Cutting over 800 bases across the globe should save PLENTY. Add all those foreign jobs, vehicles, and equipment we’re paying for at these bases.

    (6) The State Dept under Hillary should STOP building billion-dollar embassies in Pakistan, Afghanistan, Iraq, and London. Who will use these embassies in the desert and in war zones? Staffs of over 2000 and security personnel of 500 for each embassy, vehicles, office supplies, gasoline, and equipment would rack up huge savings.

    (7) The Czars and their staffs should be cut. Michelle’s 27 aids should be cut. There should be a BUDGET LIMIT for presidential foreign trips.

    (8) Nancy Pelosi should NOT be given an airplane. All members of congress should fly commercial, and so should the presidential staff.

    (9) $385 billion in social services handouts to illegals PER YEAR…food stamps, SSI (social security they DIDN’T pay into), HUD housing where Obama’s illegal aunt lived, free hospitalization, medicaid, free college education under DREAM Act, free public schools, prison for 30% illegal inmates, FREE LEGAL DEFENSE, building more schools, more prisons, hiring more teachers, more policemen, more court personnel, while they commit murders and rapes of children, form criminal gangs with impunity, drive drunk killing Americans. FORGET the Dream Act! Pass “birthright” bill.

    (10) Cut Israeli foreign aid completely (this is directed to Cantor). Americans are tired of paying for the war-mongering and threats.

    (11) Combine all the competing Intelligence agencies, and cut personnel.


  • kingfish

    Bowles, Simpson and Domenici have been in DC too long. The ONLY thing these senile jerks can think of to slash is Social Security, the measly little $400 a month your grandmother gets.

    This panel should consist solely of tea partiers. At least half the government agencies would be slashed, like the incompetent Dept of Ed, and the Dept of Energy which has done nothing in all these years to spread solar energy and free energy cars across the nation. We had a gas crisis in 1972, and HERE WE STILL SIT! SHAME ON THE GOVT! We are still driving the same 25 mpg cars as in the 50’s. We should be driving space ships by now. THE U.S. HAS THAT TECHNOLOGY ALL LOCKED UP IN THE BLACK PROJECTS — BOUGHT AND PAID FOR BY US — BUT SITTING AT MILITARY-INDUSTRIAL CORPORATIONS. This includes the cure for cancer, as admitted to by the former CEO of one of them. WHAT AN OUTRAGE!

    Slash Napolitano’s budget to the bones. It’s NOT used as appropriated to secure the border and deport illegals. It’s used instead to harrass Americans and send notices to police depts across the nation that Vets, tea partiers, and car owners having political slogans are TERRORISTS. Slash DOJ’s and FBI’s budget to the bones. They aren’t lifting one finger to arrest the Wall Street and Govt criminals. Next, slash the CIA budget to the bones — they have enough money with their drug running and money laundering.

    We would reduce retirement entitlements for congress. They’d be paid an amount commensurate with the number of years they served, and we project those years getting much shorter in the future. Secret service protection should be provided for ex-presidents for only 5 years.

    Americans DO NOT OWE the deficit. The constitution directs that all money will be printed by Treasury, not the private bankers at the Federal Reserve. The crimes of Wall Street and the FED (as detailed by Jesse Ventura) have caused this tremendous deficit. LET THEM PAY IT THEMSELVES! The entire federal tax collection goes to the 12 families owning the FED anyway. Just cancel the debt and start printing US Treasury dollars. EASY!

    Lastly, all those American dollars passed to the Taliban to kill our own soldiers should STOP, and those responsible should be prosecuted. CUT ALL AID TO ISRAEL. THEY ARE “NOT” OUR FRIEND. They killed our soldiers on the USS Liberty. They’ve killed countless Americans via their false flags blamed on others, to include 9/11. (Remember the dancing Israelis in the streets of NY filming 911?) Over 4,000 of them did not show up for work at the WTC.