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The Tax and Spend Spectator
A Time for Choosing—Really
Democrats claimed to be delighted that Republicans put their plans in writing. They have it backward.
WHEN RONALD REAGAN gave his “A Time for Choosing” speech on October 27, just days before the 1964 election between Barry Goldwater and LBJ, he correctly outlined two possible paths for the United States: up toward liberty or down toward statism.
The vote for Lyndon Johnson and his Democrat Congress was a choice to move further down the Road to Serfdom. But would a vote for Goldwater have put us on the opposite path? Goldwater was very lonely in the Republican congressional caucus. He had convinced a majority of GOP primary voters that the party could and should become a conservative party. But the Republican Party machinery and its congressional representatives had made no such decision. A President Goldwater would have faced a Congress uncertain about which direction to move.
The November 2012 election more closely matches Ronald Reagan’s speech. The choice is not simply between two men, Romney and Obama, but between two parties whose proposals would march the country in diametrically opposed directions.
Each side’s stance on taxes provides an illustrative contrast. A re-elected Obama can veto any effort to reform or reduce federal taxes. On January 2013, the Bush tax cuts of 2001 and 2003 end. The Alternative Minimum Tax (AMT) patch ends, and the AMT will begin to hit 31 million families. The top personal tax rate jumps to 43.4 percent, the capital gains rate jumps from 15 percent to 23.8 percent, the tax on corporate dividends increases from 15 percent to 43. 4 percent. And middle-class taxation?
The Obama 1.0 promise in 2008 was clear:
I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.
The Obama 2.0 promise, first stated on August 8, 2012, in Grand Junction, Colorado, reads a little differently:
Now, if your family makes under $250,000— which, by the way, is 98 percent of American families and 97 percent of small businesses— under my plan, your income taxes would not increase a single dime next year. That’s my plan.
One notes two changes. Americans of all incomes are on notice that Obama is only promising not to increase your income taxes. A value-added tax, a wealth tax, excise taxes, or import duties could be imposed tomorrow. And the promise to protect those under $250,000 a year has an expiration date of January 1, 2014. The promise only exists “next year”—2013.
Should Americans elect a President Romney and add at least tree Republican senators, to establish Republican control of the U.S. Senate alongside a continued GOP House, the path on taxes is clear. Romney has called for an across-the-board tax cut of 20 percent, which would bring the top individual rate to 28 percent. The House and most GOP senators have already voted for the plan proposed by Paul Ryan, which lowers the top rate to 25 percent.
Both Romney and a Republican Congress would be committed to shifting to a territorial tax. Under our present worldwide tax system, American firms doing business overseas must pay U.S. taxes on income earned abroad, even though they’ve already been taxed on that income by their host nation’s government. Foreign firms doing business in America pay our taxes but do not pay again at home. This, of course, puts all American firms at a disadvantage in worldwide competition. It has hurt us badly.
Obama opposed a two-year “repatriation,” which would have allowed American firms to bring overseas profits back to the United States taxed at a 5.25 percent rate, rather than the usual corporate rate, which can be as high as 35 percent. That would have brought an estimated $1 trillion back to the U.S., which would have greatly strengthened the economy and boosted Obama’s chances of winning in November. But he said no. He said “Hell, no.” He could not stand the thought of American businesses earning money without paying his vig.
Obama and the modern Republican Party offer starkly different paths on federal spending as well. The Congressional Budget Office was asked to score President Obama’s 2013 budget, looking out to 2050. In 2011, actual federal spending was 24 percent of GDP. That figure increases to 25.5 percent in 2023, 29 percent in 2030, and 34 percent in 2040. By 2050, spending directed by Washington would be fully 39. 25 percent of the economy. If you are calculating your tax bill, please remember to add your state and local taxes to this number.
By 2040, debt as a percentage of the economy reaches 194 percent, and in 2050 the CBO report shows an asterisk representing “greater than 200 percent of GDP.” The higher spending reflects Obamacare and the expansion of present entitlements as Baby Boomers retire into an unreformed Medicare and Social Security system. The CBO model assumes that the “fiscal cliff” of 2013 is avoided and the 2001 and 2003 tax cuts and AMT patch extended. Without those assumptions, economic growth would be lower and numbers worse.
RYAN’S PLAN, the “Path to Prosperity,” was scored by the CBO as follows: In 2023, a decade after hypothetical enactment, total tax revenues are 18.5 percent of GDP, the historical average for the past 30 years. Federal spending declines to 20 percent from the present level of 24 percent, and the annual deficit is less than 1 percent of GDP. Spending as a percentage of the economy falls to 18.8 percent by 2040 and 16 percent by 2050. And all these projections understate the Republican case, because they are done with static models that assume reducing tax rates would have zero impact on economic growth. (n.b.: The difference over a decade between an economy growing at 2 percent per year and one growing at 3 percent per year is $2.5 trillion in additional tax revenue.)
About the Author
Grover G. Norquist is the president of Americans for Tax Reform.
Letter to the Editor View all comments (36) | Leave a comment
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Aristocat| 10.8.12 @ 6:18AM
Some have expressed surprise that Obama is tied in the polls when he is manifestly incompetent. The truth is that 47% of the voters don't care. Why?
Because THEY WANT THEIR MONEY FROM THE GOVERNMENT ! And this is not just those on Food Stamps and Medicaid. It includes the banksters who get govt. bailouts, GE, who pays no taxes, and all the government employees, public school teachers administrators, SEIU, govt. bureaucrats, etc. etc. They are close to becoming a majority. They could care less if Obama is a failure in both domestic and foreign policy, as long as their get their money.
. HOWEVER: If it appears that Obama is going to lose, they will desert him in a heartbeat to protect their GOVERNMENT MONEY...
TLP| 10.8.12 @ 9:19AM
How about all of the Defence Contractors who are sitting on LAYOFF NOTICES that, by Law, are supposed to go out Before this Election is Scheduled to take place?
Do they Not know the Tale of the Fox and the Scorpion, and the River?
Did you know that One Bullet started WWI.
Likewise - One Bullet could have ended WWII, before it even began.
History is Fun.
Alan Obama Fan Brooks | 10.8.12 @ 5:19PM
"It includes the banksters who get govt. bailouts, GE, who pays no taxes, and all the government employees, public school teachers administrators, SEIU, govt. bureaucrats, etc. etc. "
Romney wont do anything about that-- he wants HIS people on the gravy train.
Alan Obama Fan Brooks | 10.8.12 @ 5:19PM
"It includes the banksters who get govt. bailouts, GE, who pays no taxes, and all the government employees, public school teachers administrators, SEIU, govt. bureaucrats, etc. etc. "
Romney wont do anything about that-- he wants HIS people on the gravy train.
CrackerHound| 10.8.12 @ 10:55AM
Hugo Chavez has just been re-elected in Venezuela despite his absolutely horrible record on EVERYTHING...Why? Because he has enough of the population enslaved to government handouts which comes with a heavy dose of propaganda against "the evil rich". If Chavez/Obama play their cards right, they/we will have a permanent one party rule in their respective countries.
Many have suggested we have reached the tipping point where responsible conservatism cannot win in this country anymore. The educational institutions, unions and media are definitely on board towards that end. All that is left for conservatives is grassroots activism and alternate media outlets (mostly the internet) to win enough hearts and fight against the statist behemoth. Then we have those supposedly on our side like Huckabee who proclaim real conservatism a sure loser.
I personally feel we need to sweep the elections, The House, Senate and Whitehouse need to be won in a landslide in order to have any hope for the future. If Socialism is left with ANY shred of respectability, the left will espouse it's virtues from every hill top.
TLP| 10.8.12 @ 3:51PM
Google Wikileaks and Obam's Motivations for Cracking Down on Honduras, for Removingbtheir Hugo Chavez wannabe - Manuel Zeleya.
According to Wikileaks, The Muslim B*tchslapped our ALLY - Honduras - as a means to Ingratiate himself to Hugo Chavez, and to send a Messege to the Leftist Regimes in Central, and South America, that they had a Friend in the White House.
Look it up.
Cobalt| 10.8.12 @ 7:37AM
We are at the tipping point.
If Obama is reelected, it is over for Republican presidential candidates in future elections. Too many people will be getting government handouts.
Get ready for a VAT (value-added tax). Are you ready to pay a tax to the United Nations?
There are big, bad things ahead if Obama is reelected.
Also, I think it is safe to say that Barry Sortoro is no Barry Goldwater.
Appleby| 10.8.12 @ 7:43AM
Most of the people I know (except for one occupier sister) don't care what Obama believes or doesn't believe -- they want to see his narrow Afro-American backside receding in the distance sooner rather than later, and plan to turn out en masse to wave their hankies to speed his departure. The savings vis-a-vis Air Force One alone ought to cause a significant drop in the exchequer of the USA on Day Two.
c. j. acworth| 10.8.12 @ 7:50AM
Not having him take AF 1 to go out for pizza with the girls will also reduce our carbon footprint by a substantial fraction as well, I would think. Win-win!
JimH| 10.8.12 @ 7:56AM
The GOP was then, and much of it now continues to be a fellow traveler with the Dems on the road to serfdom. The party establishment supports the expansion of Leviathan, though maybe more slowly than the Dems. They do this while occasionally mouthing some conservative pieties to appease the rank and file. The question now is the party a lost cause requiring the founding of a true party of liberty and constitutional government? Or, can those in the party who support this view of America (Tea Partiers, libertarians and supporters of the Constitution in general) gain sufficient control from the grass roots level and up to wrest it from these Bushwood country club Republicans and use the party to reclaim our country?
Pecos Pete| 10.8.12 @ 10:58AM
Ultimately, there will be a revolution that will tear apart the United States. As GRZ has written here, we are too far down the road to turn back from the federalism of progressive (socialist, statist, communist, marxist) control started mostly by President Wilson. Electing R&R will delay the revolution for awhile, but nevertheless a revolution is our destiny.
CrackerHound| 10.8.12 @ 11:16AM
Jim..I could be wrong but I think a third party is the way. I agree with you that dems and repubs are two sides of the same coin in general. It might take a few cycles but if you could draw enough independent minded Democrats and conservatives into the tent while alienating only the MSNBC leftist types, it could be done.
I like this idea ONLY if we do not have to abandon any of our core principles. My view on a third party in a nut shell is this. I could live with a little more Ron Paul ( I am not a Paulbot), but I could not live with even an ounce more of the Obama left or RINOism. The anti-war or foriegn policy aspect of the Paul wing doesn't bother me anymore. I'd rather have to fight a foreign invader on our shores than face a domestic enemy in the form of a tyrannical government. I've just about all I can take though. What has happened to this once great country sickens me.
JimH| 10.8.12 @ 1:13PM
It is appealing to have a fresh new party. My main reservation to this is the fact that the Dems and GOP together have gamed the system with electoral laws and regulations designed to prevent any interference by outside forces to their joint feeding at the public trough. For this reason I think it might be easier to gain effective control within the GOP. This is only a discussion of tactics. I think we are agreed on the ultimate end.
JD| 10.9.12 @ 1:12AM
A third party splits the vote of an existing party, ensuring dominance of the opposite party. That is why both sides encourage the formation of the third party - on the opposite side - and discourage the formation of one on their side.
If the Right were extremely well-organized, it would trick the despicable media allies of the Left into sabotaging themselves by the use of a third party. The technique would be to form a third party on the right, but to have it initially focus on issues the Left finds least unappealing. Left-wing media would then try to steer right-leaning independents into this party, to sabotage the Republicans. They would speak positively about the new party, resulting in it becoming popular (as third parties always initially are).
In particular, the new party should position itself to appeal to the "both old parties are corrupt and evil" crowd, which is large.
But then, before any election is held in which the Right's vote is split, the Republican party should dissolve and all of its members should join the new party. The leftist media will then have to pull an about-face, condemning what they very recently praised. But the "middle" won't swing quickly - the PR glow around the new party will linger, and there will be backlash against the turncoat leftist media.
End result - a bunch of the middle likes the new party of the Right a lot better than the evil olde guarde Democrats, and the leftist media takes a big PR hit.
Von Mises Jr| 10.8.12 @ 9:27AM
I don't agree with Norquist that if Obama wins, he will extend the Bush rates for another year or two. First, he is not well known for truthfulness. In fact, his entire campaign has degenerated into calling Romney a "liar." Second, is that he often speaks in double entendre. If the Republican House does not pass massive tax increases on higher bracket incomes, he will let the rates expire and blame the Republicans. Third is that he already told Medvedev that he has "more flexibility" after the election. So if he does not have to face re-election, why would he help Middle Class tax payers that probably did not vote for him? Fourth, he needs the money to re-distribute to the poor and his Solyndra-style cronies. There will be lots of bundlers that will need to be rewarded.
If you have an AGI of $70K, your taxes are going up $4,200 for Federal Tax if Obama is re-elected. You can bank on it.
If ObamaCare stands, your employer and/or you will pay an additional 3.8% or another $3,800 at $100K total income.
So if your wife and you earn combined $100K with a mortgage and a couple kids, it will cost you and your employer $8K due to Obama and DC to be received no later than April 15, 2014.
Stan Redmond| 10.8.12 @ 12:23PM
BUT I GOT A OBAMAPHONE!!!
TLP| 10.8.12 @ 3:54PM
Norquist is a nothing.
Ignore him.
He's akin to Rove.
Al Adab| 10.8.12 @ 9:31AM
As in 1964 the republican party continues to oppose the Conservative Movement. The establishment, accomodationist GOP, this year headed by Mitt Romney as once did his Father before him, is no Conservative Party. It is only when Conservative prevail within the GOP ala 1980, 1994 that the GOP enjoys success. Both Bushes ran as Conservative while Mitt doesn't pretend to be. Still, what alternative do Conservatives have? The GOP will continue to oppose the Movement and ignore Conservatives as long as it can take our votes for granted.
Oldefarte| 10.8.12 @ 10:16AM
Grover, great article! The second page is key to explaining that all welfare would become block granted which would do wonders toward downsizing the current huge governmental defecit and debt. Now if Romney and Ryan can become elected and begin implementing this system, we taxpayers will win!!!!
PolishKnight| 10.8.12 @ 11:35AM
Sadly, the left doesn't really care what was written, or said, either by themselves or their opponents. They make up a position for themselves that the electorate will like (and if they're smart, they run up a trial balloon) and they do the same for the opponents to drive away voters. Within a week or so, they send it out via the NYT and their media shills and I hear the terms from my leftist friends almost as if they "got a memo". "Romney wants to raise taxes on the middle class by $2000" (note the exact figure implying that Romney HAD to have said it because who makes up that number? Oh, wait, they did!) "Romney doesn't pay any taxes!" Romney doesn't care about the "middle class". (I notice their obsession with the term "The middle class". My suspicion is that they are worried that their pollsters came back and informed them that the public is wary of the left as a party of welfare recipients, government workers, and Hollywood. So they want to show they care about the "middle class".)
Obama then runs a ton of commercials with him in "middle class" homes (and all of them white.) (Probably government union workers.) Spin spin spin.
In other words, folks, facts don't matter to them. They're selling a movie or a product like a car where you like the cool ad and buy it for that reason. And I know too many who fell for it. The question is how many have they suckered?
Mike in N.C.| 10.8.12 @ 1:07PM
" My goal is to cut government in half in twenty five years, to get it down to the size where we can drown it in the bathtub" Grover Norquist.
Mr. Norquist is in good company. I'm sure Hu Jintao, Vladimir Putin, Hugo Chavez, Fidel Castro, the Taliban, al-Qeda et.al. heartily agree with Mr. Norquist's aspirations and are wishing him all the good luck in the world.
JD| 10.8.12 @ 1:37PM
Mike's post reflects the simple truth of modern American leftism: The belief that the government IS America.
They believe that America's prosperity is directly defined as "the size, scope, and magnificence of our government." The larger the government, the greater America is, in their minds. Smaller government isn't considered failure because they think big government is better for the people. Smaller government is considered failure because big government is THE ENDGAME. The people's prosperity isn't the endgame. The government's size is.
Like ancient Egyptian slaves building pyramids, "We the People" exist to grow the magnificent glory of our government. It is fundamentally the opposite of the relationship we on the Right espouse, where government exists to serve the people.
We see their depravity every time they react to a proposed tax rate cut by demanding to know how we'll "pay for it", as if allowing people to have their own money must be justified, and giving it to government must not.
JimH| 10.8.12 @ 2:45PM
All within the state, nothing outside the state, nothing against the state.
Benito Mussolini
Mike in N.C.| 10.8.12 @ 5:05PM
JD,
The left doesn't believe the government IS America and we certainly don't share the right's irrational hatred of government. We know the things the government can do to promote prosperity (security, infrastructure, prudent regulation which even Romney acknowledged is necessary), but we also know the limitations of government and the importance of business and markets. But, I think you let cat out of the bag in your last paragraph. You like the benefits provided by government but you don't want to pay the taxes necessary to support those benefits. You, like others on the right, mask this with BS about Egyptian slaves and other nonsense. Your life is nowhere near slavery and you know it
Robert| 10.8.12 @ 5:41PM
Mike, there is NOTHING in JD's last paragraph remotely suggesting your inference that he expects 'stuff' for which he's unwilling to pay. That's the parasite's mantra. Are you projecting?
He said clearly, the Left sees a tax cut as depriving the government of its rightful claim on OUR money. The left sees a tax cut as a wage cut.
Remember, government does NOT own a dime of workers' wages. It confiscates them through a Constitutionally questionable income tax law.
Government and its parasites need an attitude adjustment. Romney and Ryan are about to bring them one.
Butch| 10.8.12 @ 5:59PM
You beat me to it, Robert. None of these guys can make a straightforward argument. "You like the benefits provided by government . . ."; JD said no such thing. Beating up a strawman. Typical.
Butch| 10.8.12 @ 6:08PM
Mike, I live on a cul-de-sac that I really like. One summer day about 15 years ago, our street got resurfaced. Next morning, all the men on the street were out barefoot in the street evaluating the job. That is how rarely the people you are opposing on this site receive anything from the government. Our relationship is to fork over, cough up, and pay; getting tickets from the cops in speed traps hurrying to the jobs you 9th warder-types never go to; having the cops show up 45 minutes late after your car's been broken into, and being told "I hope you have insurance; and receiving harassing and threatening audits from the IRS.
On the other hand, the Rooskies never got east of Tulsa. But we all share equally in that benefit, don't we?
JD| 10.9.12 @ 12:59AM
You accuse us of "irrational hatred" despite the fact that our arguments are consistently rational (and rationally consistent). I have always argued for government to fill its proper role - defense - and nothing more. I rationally argue against anything else, and never argue for anarchy.
Slavery can onset gradually, as many oppressions historically have. That doesn't change its nature. Compulsion to work for nothing is the critical threshold - once it's been crossed, the magnitude of the work forced is easily increased. You may condemn this as a "slippery slope" argument, but the slippery slope has been THE tactic of the political left throughout history.
As others have noted, I consistently request no benefit from government other than the defense it's supposed to provide. As a leftist, you may credit government with doing more for me in "you didn't build that" fashion. This is more than a lie - it's a conspiracy, unrecognized by most of the conspirators. Your agenda's top objective is to in some way give something to everyone, so that you can forever say "you owe us!", even after any true debt has been repaid ten times over. "Owe" isn't even the right word - "own" is the true implication.
Mobsters use this "get a favor, owe an eternal favor" tactic very successfully. We seem to have mobsters in Washington.
Oldefarte| 10.8.12 @ 4:12PM
No you see when despotic leaders wish for their country's populus to be beholden to govvernment, they accompolish same by providing pablum to the indigents in order to establish/maintain their control of same. A decreasing of government accompolishes the direct opposite effect, so as usual your are incorrect in your analysis!!!!!!!!!
Mike in N.C.| 10.8.12 @ 6:31PM
Had you guys been alive after the American Revolution, you would have been Anti-Federalists. You would have supported confederation with it concomitant weaknesses because your taxes would be lower. You would have watched the nation divide into two nations and would have been delighted that there was no strong federal government to challenge the secession. Because, you hate government. Then, as now, it was at the bottom about taxes. C'mon, guys. Greed is your creed. Own up to it.
Robert| 10.8.12 @ 6:51PM
Sir, there was no income tax after the Revolution! It does not follow (except in your convoluted mind) that those who wish to limit confiscatory taxes are anti-Federalist. Anti-federalism, greed...what a gaggle of straw men you conjure up!
This forum is not Romper Room. Get a solid argument or butt out!
Mike in N.C.| 10.8.12 @ 8:02PM
Not Romper Room, but Looney Tunes.
Robert| 10.8.12 @ 8:52PM
What's up, doc? Surely someone of your superior Liberal intelligence has better things to do with his time than engage in Looney Tunes.
Alej| 10.8.12 @ 10:27PM
Your prattle indicates that, regarding American history, you don't know your ass from a hole in the ground.
Do you know why the United States is called that ?
Because each "state" is a sovereign country that decided to band together, allowing a central ADMINISTRATIVE entity to handle ADMINISTRATIVE matters {called the (few) enumerated powers} that were best handled centrally - minting money, post office, etcetera.
"State" is fungible with "country." That's why we are not called the United Provinces of America.
"That government which governs least , governs best."
Who said that ?
Taxes ? You're all for taxes, Mike in NC, because you are one of the 47 percenters. Pretty obvious.
JD| 10.9.12 @ 1:02AM
Mike betrays himself yet again. He cannot argue by any means except by redefining us. He cannot assail our true beliefs, so the straw men come out.
Greed, anarchy, and racism. The Leftist requires that all of his enemies love greed and anarchy, and hate minorities. When we stubbornly fail to conform to the straw man, the Left responds angrily, lashing out in frustration and accusing us of lying. How dare we claim to know what we think! HE knows what we REALLY think!
What phenomenal arrogance.
Michael| 10.9.12 @ 5:34PM
Q: Who is Ronald Reagan? A: He was the only good thing about RINO Barry Goldwater's 1964 campaign for president.