A lot of Washington types are betting their careers on tax increases.
It seems like everyone is piling on my college friend Grover because they can’t wait to abandon the tax pledge not to raise taxes that he sponsors, and that they took so gleefully when they were unknowns trying to break into politics.
It seems that way because any time any Republican does it he is lionized all over the Democrat party-controlled press. But Grover is right that it is just the usual handful of malcontent sell outs who always in their hearts think we (conservatives and Republicans) are wrong, in the celebrated phraseology of the late Joe Sobran.
Hence there he is, Sen. Lindsey Graham (R-SC), telling Democrat operatives on ABC’s This Week, “The only pledge we should be making to each other is to avoid becoming Greece. And Republicans should put revenues on the table.” He follows another frequent sellout Sen. Saxby Chambliss (R-GA), who also told the Democrat party press, “I care more about my country than I do about a 20 year old pledge.” Both Graham and Chambliss are up in 2014, and I am certain Graham is already trying on suits to join the K Street lobbyist crowd in 2015. If he is really as smart as he thinks he is, as I will explain below.
It was Bill Kristol of the Weekly Standard who rang the alarm bell that it was time for the rats to start to flee what he sees as a sinking ship, saying, “The leadership of the Republican Party and the leadership of the conservative movement has to pull back, let people float new ideas. Let’s have a serious debate. Don’t scream and yell if one person says ‘You know what? It won’t kill the country if we raise taxes a little bit on millionaires.’ It really won’t, I don’t think.” Raising taxes is what passes for a new idea at the Weekly Standard?
So let’s have Bill Kristol’s serious debate. Let’s talk about the fiscal cliff, ask why would we want to raise tax rates on job creators, and offer some actual new ideas.
The Fiscal Cliff and the Coming Crash of
The rhetoric has already lost sight of what the term “fiscal cliff” describes. The talk in the Washington media is increasingly as if the “fiscal cliff” is all about the deficit, and the point is a tax-increasing budget deal to close the deficit. But the fiscal cliff refers to the economy falling off the cliff due to the fiscal policies of comprehensive tax rate increases and spending cuts (for Keynesians) already enacted into law to go into effect on January 1. We are not going to avoid that fiscal cliff by the Republicans caving in to those tax rate increases!!!! Eric Cantor call your office.
This column has been warning about the fiscal cliff impact on the economy for almost two years now. That was the point of my 2011 Encounter Broadside monograph, Obama and the Crash of 2013. Now even the Washington Establishment has awakened to the danger, but you heard it here first.
But let’s be clear about exactly what the threat is, though we have explained it here before. Going into effect on January 1 are increases in the tax rates for virtually every major federal tax. That is primarily because the tax increases of Obamacare go into effect, and the Bush tax cuts expire, which President Obama refuses to renew for the nation’s job creators, investors, and successful small businesses (the English translation of “the rich”).
As a result, the top two federal income tax rates will jump by nearly 20%, the capital gains tax rate will soar by nearly 60%, the income tax rate on dividends will nearly triple, the Medicare payroll tax rate will explode by 62% for these disfavored taxpayers, and the death tax will rise from the grave with a 50% rate increase.
That is all on top of the corporate income tax, now featuring a top marginal rate of nearly 40% on average, counting state income taxes. That is now the highest in the world under President Obama, except for the socialist one party state of Cameroon. Even Communist China and Vladimir Putin’s Russia have lower marginal corporate income tax rates, as do the social welfare states of the European Union, mostly at 25% or less.
American business is uncompetitive with this tax disadvantage. But under President Obama, no relief is in sight. Instead he continually barnstorms the country calling for still more tax increases. His Buffett Rule would raise the capital gains tax rate by 100% instead of nearly 60%. Now he is talking about a carbon tax, which would be in direct violation of his campaign promises not to raise taxes on the middle class “in any form.”
Piled on top of these sweeping tax rate increases is the new avalanche of regulatory costs the Obama Administration is also preparing to dump on the economy next year. In addition to the assault on the coal industry, EPA and Interior are now preparing for totally unnecessary federal regulation of breakthrough oil and gas fracking, which had provided hope for salvation of the dying American economy. That will all end up sharply increasing energy costs for American industry, just when low natural gas prices indicated a possible new dawn for American manufacturing. The final shutdown of the Keystone Pipeline and other restrictions on oil production, and the Fed’s long-term declining dollar, are going to mean more rising gas prices at the pump.
Over the next two years, the implementation of Obamacare will mean soaring health care costs for American business besides, if not outright chaos in the health care and insurance industries. Dodd-Frank and other assaults on American finance will constrain the essential business and consumer credit essential to any recovery.
Meanwhile, the Fed with its record low interest rates for a record period of time, and wanton fabrication of new money, is laying the groundwork for renewed, deadly, inflation/recession business cycles.
This is all why renewed recession next year is now so likely. But where is the leadership in Washington for renewed growth? These darkening, gathering clouds provide plenty of opportunities for Republicans to take the lead on growth, rather than falling in line as foot soldiers in Obama’s war on the American economy.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?