"Tax deal" is the buzz phrase of the week in Washington, as Barack Obama and congressional Republicans came to an agreement Monday on a two-year extension of current income tax rates for all Americans. Predictably, the Left went hysterical. House Democrats promptly held a voice vote to reject the compromise unless undisclosed changes are made to it, though the Senate began debate on a larded-up version of the proposal Thursday night with a test vote scheduled for Monday. As usual, the devil is in the details -- and, in this case, the definitions.
Obama, his fellow Democrats and their acolytes in the media continue to frame the debate in terms of tax "cuts" versus the budget deficit -- as if tax rates before 2001 were the natural order of things and to keep rates where they are is a "cut" that will increase the deficit. On the contrary, without the deal, everyone's taxes will rise by hundreds or even thousands of dollars next year. With the deal, no one's income taxes will be cut. In fact, some taxes will skyrocket. The estate (death) tax will be resurrected at 35 percent with a $5 million exemption -- up from 0 percent this year, but down from the previous 55 percent. The only new cut would be a temporary payroll tax reduction of two percentage points.
The facts, however, don't stop the Left from their dishonest characterization. "The far-reaching package ... would add more than $900 billion to the deficit over the next two years," The Washington Post lamented. Ditto for The New York Times, the Associated Press and others. This assumes that economic behavior won't change if taxes go up, meaning federal revenue will increase by the exact amount of the tax increase. Ergo, if Congress prevents the tax hike, that lost revenue adds to the deficit. It's a wrong assumption, demonstrable by the fact that federal revenue actually went up after the Bush tax cuts went into effect.
Meanwhile, Obama was so concerned about the "cost" that he insisted that unemployment benefits be extended for another year. Now that will actually cost nearly $60 billion, and it will cause the unemployment rate to remain higher than it otherwise should. On top of that, Sens. Maria Cantwell (D-WA), Barbara Boxer (D-CA) and Tom Harkin (D-IA) secured various energy subsidies in exchange for their votes, and more pork is almost sure to follow.
The fact that Obama conceded to any deal is notable. The Wall Street Journalconcludes, "Obama has implicitly admitted that his economic strategy has flopped. He is acknowledging that tax rates matter to growth, that treating business like robber barons has hurt investment and hiring, and that tax cuts are superior to spending as stimulus. It took 9.8% unemployment and a loss of 63 House seats for this education to sink in, but the country will benefit." The flop is so complete that even former economic adviser Larry Summers warned of a "double dip" recession if taxes go up. John Maynard Keynes, call your office.
Though Obama did accept the deal with the GOP, he proved to be a rather disagreeable compromiser, calling Republicans "hostage takers" and the American people the "hostages." Obama thus not only reneged on an oft-repeated campaign promise to repeal the Bush-era tax cuts "for the rich," he also proved utterly ungracious to those lawmakers with whom he had just struck a deal. "[B]ecause of this agreement, middle-class Americans won't see their taxes go up on January 1st, which is what I promised," he said. "[But] I'm as opposed to the high-end tax cuts today as I've been for years. In the long run, we simply can't afford them. And when they expire in two years, I will fight to end them."
Some conservatives are opposing the bill because of the aded deficit spending. Club for Growth President Chris Chocola said, "The plan would resurrect the Death Tax, grow government, blow a hole in the deficit with unpaid-for spending, and do so without providing the permanent relief and security our economy needs to finally start hiring and growing again."
Yet given that Democrats still control the White House and, until January, both houses of Congress, this deal may be the best we can hope for now. Republicans should fight to resist wasteful spending, but tax hikes must be prevented. If they are, taxpayers will keep billions of their hard-earned dollars over the next two years. With that renewed tax stability for small businesses, unemployment should go down, though not as much as if the rates were permanent. In 2012, Republicans could be in far better position to win a permanent solution.
Aside from this particular debate, they also recently analyzed the broader scope of things. Check this out:
"It has been generations since Americans have been exposed to a more vivid depiction of the significant differences between the left's and the right's views of this country and its future. The delineation between conservative and liberal had grown hopelessly blurred to a majority of citizens. But Obama and his leftist cabal have been successful not only in demonstrating the frightening vision progressive liberals have of making America into a European-style socialist state. They have also managed to animate a vast conservative majority that has lain painfully dormant since the mid-1980s. ... While conservatives like [Rep. Eric] Cantor believe money belongs first to the citizen and is confiscated by government, leftists like Obama believe money belongs first to the government. That government then lets select citizens keep some of it ... if and only if government 'can afford' to be so generous. Further, when Americans open their newspapers, they are greeted with the wise counsel of Obamabots like Tom Friedman and Paul Krugman. Friedman's recent piece in the New York Times called the Tea Party movement 'narrow and uninspired' while touting that '[w]e need to raise gasoline and carbon taxes to discourage their use and drive the creation of a new clean energy industry.' Krugman ... laments that the waste of nearly one trillion taxpayer dollars on a government spending bill meant to stimulate a still-stagnant economy wasn't enough, and it should be followed up with an even bigger second stimulus. Everywhere they turn, Americans see that the left is offering higher taxes, less freedom, more debt and regulation. They simultaneously see the right offering lower taxes, freer markets, and fiscal sanity. Voters' first opportunity to choose between those two visions occurred in the 2010 midterms. Their preference was unmistakable -- to everyone, that is, except Barack Obama."
I couldn't agree more, and I think that's why he keeps governing from the far Left. Some think he'll moderate once Republicans are back in power in Congress. I don't. He's an ideologue who prizes his agenda more than anything else. He's already said he'll fight the GOP each and every day, called them rather unflattering things (i.e. hostage takers and bomb-throwers), and he has yet to show a sign of true compromise on anything (no, the extension of the tax cuts isn't a compromise - he had no choice). He very much embodies his own words from early 2009 - "I won." Well, guess what? Now we won, and now we want our country back. If he can't figure that out or accept that, he's done. The American people delivered an unequivocal message a month ago, and politicians of both parties face early retirement if they don't heed that message. The Dems have already had their first wave of departures; we'll see who gets tossed after the next two year probationary period.
Finally, here are two quotes that I think are an absolutely brilliant counterpoint to each other at this moment in history. One illustrates an absurd attempt at bald-faced political pandering that manages to invalidate itself in the space of just a few words, the other is a timeless statement of truth and reality that we all need to keep in mind.
"This isn't about the politics of the moment. This has to do with what can we get done right now." -- Barack Obama, defending his seeming backtrack and willingness to deal with the GOP on extending tax rates."To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it." -- Thomas Jefferson
Quite a difference, don't you think?
No comments:
Post a Comment