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Curbing the IRS
June 12, 2013 | 70 comments
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Can We Get It Back?
June 5, 2013 | 39 comments
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The Ronald Reagan of Virginia
May 29, 2013 | 72 comments
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Time to Go for the Kill
May 22, 2013 | 67 comments
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Obamacare Implodes
May 15, 2013 | 41 comments
A Further Perspective
Brazen Extremism
The Democrats’ breakout budget, not Paul Ryan’s restrained one, is what’s extremist and radical.
Democrat Party cheerleader Rep. Chris Van Hollen (D-MD) ridicules Paul Ryan’s House Republican budget as “extremist” and “radical.” Rep. Steve Israel (D-NY) used the Huffington Post platform to allege that Ryan’s budget reflects “extremist Tea Party control” of the House Republican majority.
But it is the Senate Democrat budget that is extreme and radical, as I demonstrate below, reflecting extremist socialist party control of the Senate Democrat majority.
Bursting Through the Long Term Postwar Consensus on
Spending and Taxes
For 60 years after World War II,
from 1948 to 2008, federal spending as a percent of GDP was
remarkably stable, hovering around an average of 20%. During that
same period, federal taxes were remarkably stable as well, hovering
around an average of 18% of GDP. With federal spending and taxes at
those levels, America was free enough to prosper during this time
as the richest nation in world history, with resulting,
unprecedented military dominance as well.
Ryan’s budget merely returns federal spending and taxes back near those long-term postwar averages, with both federal taxes and spending after 10 years at 19.1% of GDP, almost perfectly splitting their long-term historical difference. It is abusive, dishonest rhetoric to call that “extremist” or “radical.” In reality, in returning America to those long-term postwar averages, Ryan’s budget can only be called “traditional.”
In sharp contrast, the Senate Democrat budget proposes to increase the current bloated levels of federal spending by $2.1 trillion a year by 2023, to $5.7 trillion in that one year alone, which would be almost double Bush’s 2008 federal spending of $2.983 trillion at the height of the financial crisis and all the bailouts. The Senate Democrat budget proposes to spend $46.4 trillion over the next 10 years, which would be the biggest government spending in world history, increasing annual federal spending over that time, compared to this year’s federal spending, by a combined total of $10.4 trillion. That is what is extremist and radical. Even the home of Swedish socialism is turning away from Big Government spending, but not America’s Democrat party, which is now the world’s leading left-wing party.
At the insistence of President Obama and Congressional Democrats, federal taxes have been raised twice already this year. That includes $1.1 trillion for the new Obamacare taxes that went into effect on January 1, and $600 billion for the expiration of the Bush tax cuts for the nation’s job creators, investors, and successful small businesses (which socialist Democrat demagogues call “the rich”). CBO now projects that federal revenue will double from $2.45 trillion in 2012 to nearly $5 trillion ($4.96 trillion) by 2023. But that is still not enough for the Senate Democrats, who propose in their budget still another $1.6 trillion in tax increases. That is what is extremist and radical.
What the Senate Democrat budget proposes is effectively a Big Government breakout from the long-term postwar averages from 1948 to 2008 for both federal spending and taxes, permanently increasing both beyond those long-term averages. Indeed, because the Senate Democrat budget so zealously rejects any entitlement reform that would make any meaningful long-term difference, under that budget spending and taxes would soar well past their long-term postwar averages after the current 10 year budget window. That is what is extremist and radical.
Ryan’s plan balances the budget after 10 years with no further tax increases while continuing to increase spending every year by 3.4%. Apparently, balancing the budget is extremist and radical to today’s Democrats, but we will see in 2014 that it is not so to the American people. After 10 years and another $1.5 trillion in tax increases, the Senate Democrats’ own budget confesses that the federal deficit would still be $566 billion in 2023. That would be the highest federal deficit in American history, higher even than the former record Bush deficit of $458 billion in 2008, except for the four straight years so far of Obama deficits over $1 trillion.
Ryan’s Tax Reform: Another Republican Middle Class Tax
Cut
As I first reported in this column months ago,
Ryan’s budget includes very positive tax reform, proposing to
replace the current 7 tax rates in the individual income tax with
just two, 10% for families making below $100,000, and 25% for
families making over $100,000. The New York Times, which
is a Democrat Party controlled publication, misleads its readers by
saying, “[N]aturally Mr. Ryan doesn’t explain how this could happen
without raising taxes on middle- and lower-income people.”
That is a typical brain dead comment from the Times, which reads these days like a college, Marxist, student newspaper. So let me correct the Times. Ryan is Chairman of the House Budget Committee. It is not his job to explain how tax rates can be cut without raising taxes on middle and lower income people. Those details are never in the budget documents. That is the job of House Ways and Means Committee Chairman Dave Camp (R-MI), in whose Committee that tax reform bill will now be written.
Now let me scoop the New York Times. When Chairman Camp writes the tax reform legislation, it will involve another tax cut for the middle class. The current rate of 15%, which applies to couples making between $17,850 and $72,500, will be reduced to 10%. The current 25% rate, which applies to couples making between $72,500 and $146,400, will be reduced to 10% for those making less than $100,000.
While Budget Committee Chairman Ryan has specified that the tax reform overall will be revenue neutral, which is to be achieved by reducing tax loopholes, deductions, and credits, even the Senate Democrat budget recognizes that those tax preferences primarily benefit the higher income taxpayers. Harvard economist Martin Feldstein, who is a former chairman of the President’s Council of Economic Advisors, explained last year in the Wall Street Journal (a much more honest and informative paper than the New York Times) that there are more than enough such tax preferences that can be reduced or closed to finance tax reform as Ryan has proposed, without raising taxes on middle class or lower income taxpayers.
Here is the scoop. When Camp passes his tax reform bill through his Ways and Means Committee, it will involve another, major, tax cut for the middle class. Indeed, with the middle 20% of income earners now paying just 2.7% of total federal income taxes, the Camp-Ryan tax reform bill may well eliminate federal income taxes on the middle class entirely. There you go. You read it here first. If you read this column every week, instead of the New York Times, you will be ahead of the curve, and much better informed about what is happening in Washington, D.C., and what is coming.
When that happens, the New York Times will apologize to the American people for dishonestly misleading them when it should have known better (as I did, with no investigative resources at all), or there will be protests outside the Times in New York City demanding such an apology until it is forthcoming.
Of course, the last major tax cut for the middle class was adopted in 2001, under a Republican majority Congress, and Republican President George W. Bush. Most Democrats voted against that bill, though in permanently extending those middle class tax cuts in January this year, President Obama and Congressional Democrats tried to style themselves as great middle class tax cutters.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Letter to the Editor View all comments (17) | Leave a comment
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Von Mises Jr| 3.20.13 @ 7:09AM
Great article but the prescription is probably impossible for the next four years. Most people do not even realize how sick they are yet and not ready for the Caster Oil.
So first, we must point out how the sickness will progress. If you are not a high value employee, your employer may very well drop your health coverage so you will need to buy your own or pay a fine. When your employer's cost of burden necessarily skyrockets, you may lose your job. If you sell your house, you may pay a 3.8% ObamaCare tax on the sale price. If you inherit or die, your family Estate may be ravaged. If you already lost your job, you won't be getting one anytime soon. This is the sickness caused by the Senate Budget and ObamaCare.
Feel sick yet? Perhaps that Caster Oil won't be so bad after all.
The good news is that some of these maladies are already happening and will continue to get worse as ObamaCare is implemented. Pray that by November 2014 we have a lot of sick patients that want some Caster Oil and a shot of Penicillin.
davidh| 3.20.13 @ 12:16PM
Brilliant article. The key is the term "middle class". The democrats use it extensively to state their case. They lie. The middle class is paying for all this new spending.
Middle class is the term the democrats have used to move their agenda. They say the middle class needs to grow and be protected.
They have taken the position that they are protecting this large group and will make the rich pay.
Again look at health care. Middle class already had health care. So the Obama plan was not for them. Double our premiums to cover everyone and make it "cheaper".
We can win this argument.
Jack London| 3.20.13 @ 8:31AM
So the GOP is going to end all of the tax deductions/loopholes on the rich to pay for this without raising middle class taxes? Does anyone believe in fairies? Does anyone think Americans are stupid enough to fall for this after rejecting it at election?
squalis| 3.20.13 @ 10:02AM
The fantasy is believing this country has the resources to sustain the ever increasing out of control government spending. The fantasy is the expectation of an apology from the NY Times.
Pecos Pete| 3.20.13 @ 8:38AM
No budget will be passed and signed into law. We live in the land of Continuing Resolutions, Executive Orders and Fecal Govt. Lawlessness.
Led by a King and Queen who live large. King O has a taster for God's sake. I'd guess the Queen does too.
Al Adab| 3.20.13 @ 9:33AM
This proposed budget and the "progressive caucus" agenda are the most radical in our history. They represent a clear and present danger to the nation and its constitution which the office holders are sworn to protect.
TLP| 3.20.13 @ 10:50AM
When in doubt, duke it out.
The Jackass Party will never take one step backwards. Period. They either Hate this Country with every fiber of their being, or they've already made Arrangements for themselves and their Families, to live in some other Country when the Base of the Democrat Party starts Burning Down the Cities once we've run out of Other People's Money. I'm thinking that it's Both.
Does anyone Not waiting for a Sex Change, think that this is Sustainable? Does Van Halen really think that we can survive by Printing Funny Money here, and Borrowing a Trillion or Two of Real Money from the Chinese?
Does anyone believe that American Companies are just gonna sit around and wait to be Squeezed by this Food Stamp President and his "I got mine, Screw You" Senate?
If it was Up to Me? If I was the Speaker of the House? If I Controlled the Purse Strings, and could Shut Down whatever I chose to Shut Down? I would Use that Power while I still had it, cause there might not be a Tomorrow.
I would play the Halfrican's game, and Bleed his Voting Strongholds Dry. I would Defund all of their Pet Projects. I would make life Hell for His People, until they took it to the Streets. I would turn up the Heat, this Summer. Let's see how HIS PEOPLE like being the Sacrificial Lamb.
Arnie| 3.20.13 @ 11:32AM
"I would play the Halfrican's game, and Bleed his Voting Strongholds Dry. I would Defund all of their Pet Projects. I would make life Hell for His People, until they took it to the Streets."
TLP, most of the American public already knows you guys feel this way about them, and we already know that you do bleed Democratic strongholds and assistance in the name of maintaining mansions in Florida and New York, and bank accounts in the Caymans.
This is why you guys are hated. Approval of your party hovers around 20-30%. This is why you lose elections. In the name of making the rich richer, and the poor poorer, your party is going to lose until you remedy this situation and start focusing on improving the lives of the middle class and poor.
Obama has had only 4 years, and only 2 with a cooperative Congress to change this scenario. Not many of the Democrats expected him to turn around the country in 4 or even 8 years after the 30 years of conservatism (read plutocracy philosophy) that waged war on the middle class and the American worker.
Al Adab| 3.20.13 @ 12:21PM
Arnie pooh:
What 30 years of Conservatism? We have had one Conservative President in the last 90 years. Like all you people in the opposition you equate republicans with Conservatives. They are not the same.
Plutocracy? It is The Left that finds ways to pad their own nest at the expense of their constituents. Conservatives understand that the purpose of a free nation is to allow the opportunity for all to rise to the top. Some will and some won't but it is not the purpose of government to choose who those might be.
Perhaps if your unstated wish comes true Obama will be president for life and continue to bloviate and make empty promises while promoting greed, envy and resentment. Have a great life in that world.
sickofit5| 3.20.13 @ 12:27PM
How did you catch your disease? I am not even sure you will be cured when you begin to see how Obamacare is going to treat your parents or maybe you are at that medicare age where you will learn first hand. If it were not going to be so painful for all of us it would be fun to watch your outrage and disbelief.
JD| 3.20.13 @ 12:28PM
The key to Leftism's advance is for Leftism to get its way while convincing the public that the Right is actually getting its way.
Part of doing that is stating that anything that a particular Leftist dislikes can only be right-wing. Another part is declaring that by definition, all bad results are right-wing.
Sixgun| 3.20.13 @ 1:23PM
Arnie... the only one bleeding us dry is the Federal government with their outlandish confiscatory tax rates.
Jim Adcox| 3.20.13 @ 11:57AM
Well, you have nailed the liberal cant: It is abusive, dishonest rhetoric . . . “extremist” . . . "radical.”
alice921| 3.20.13 @ 12:26PM
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Sixgun| 3.20.13 @ 1:21PM
Am I the only one who thinks Ryan's budget spends too much... automatic 3.4% increases each year is ridiculous considering the Federal government keeps telling us the CPI is less than 1.5%. Why does Federal spending increase twice as much as the official Federal inflation rate? We need to stop increasing Federal spending and start "reducing" Federal spending. Now that would be a real "radical, extremist" position....
cicero| 3.20.13 @ 3:43PM
The problem comes when the Feds think that all the money spent last year was spent wisely, and that therefore, we have to spend at least that much again. The Federal Govt. is bloated. They write and sing about suffering when some useless beaurocrat is told to take a furlough day - July 5 - without pay. Obama came into office, and immediately hired 400,000 new federal workers. Since then, they have all gotten raises every year. A good first step would be to fire 400,000 federal workers - fire, not furlough. That budget should be cut by 3.5% every years, not expanded.
The test for federal spending should be whether you, the taxpayer would voluntarily pay for the program. If not, shut it down. As far as the continuing resolution, if they can't come up with an acceptable budget after 5 years, shut it down. No more continuing resolutions. If the Govt. and the newspapers/media shut down at the same time, most of the ocuntry would not be aware of the demise of either. And the quiet would be conforting.
Marc Jeric| 3.21.13 @ 4:29AM
Lyndon Johnson left us wih these two major accomplishements:
1) He placed our Social Security contributions into the congressional general spending fund, and replaced those real moneys with worthless IOU's; and
1) He invented hunger in America (at that time he claimed that 12 million of us go to bed hungry every evening) and originated War on Hunger by inventing food stamps (my questions are, as with every war: a) what is the definition of victory, and b) what is our exit strategy; now we have 47 million people on food stamps (wrong - these are demeaning and have been replaced with credit cards). We also have a huge problem of obesity, particulary in minority households, if we are to believe Michelle Obama and Mayot Bloomberg.