With this Gordian tax knot elegantly unraveled, Congress and the White House should agree to extend everything else into 2013. This would give both parties breathing room to handle entitlement reform and program terminations without conducting such complex maneuvers near a swiftly approaching precipice.
If President Obama balks at this GOP legislation, he can explain to middle-class Americans why he denied them a tax cut that Republicans authored.
This approach also would help House speaker John Boehner (R., Ohio) regain the confidence of nervous free-marketeers. Boehner rattled tax fighters when he recently said, “There are ways to limit deductions, close loopholes, and have the same people pay more of their money to the federal government without raising tax rates.”
Supply-siders have been disturbed to see Boehner and several other wobbly Republicans accept Obama’s premise that what America needs is for successful people to send more money to Washington, albeit through limiting write-offs rather than raising rates. The damage would be the same: Less money for free enterprise and more money for government.
“Speaker Boehner should focus more on pro-growth tax reform, as opposed to giving the government more money to spend,” says Barney Keller, spokesman for the pro-market Club for Growth. “We should be measuring legislation by whether or not it increases economic output. That should be the first standard for any budget deal.”
To that end, Boehner should embrace the words of none other than Barack Obama — the president agrees with the mainstream GOP position in this controversy.
Or at least he did. Obama told NBC on August 5, 2009, “The last thing you want to do is to raise taxes in the middle of a recession, because that would just suck up — take more demand out of the economy and put businesses further in a hole.”
When Obama expressed this piece of economic common sense, America was no longer “in the middle of a recession.” While Americans may feel otherwise, the Great Recession technically ended in the third quarter of 2009. As Obama spoke, output was expanding at the rate of 1.4 percent. But by that October, GDP was advancing at 4 percent. So, if tax hikes were unwise then, they surely are ill advised now, with GDP growing at just 2.7 percent.
A Republican middle-class tax cut, coupled with importation of marooned corporate profits, recognizes a simple fact on which every American should meditate.
A rapidly rising star of the Right expressed it beautifully: “The way we’re going to move ahead is not by making rich people poorer. It’s by making poor people richer,” Senator Marco Rubio told Fox News Channel’s Bill O’Reilly on Wednesday evening. “The only way forward for us is rapid economic growth. Not new taxes. We need new taxpayers.”
— Deroy Murdock is a New York–based Fox News contributor, a nationally syndicated columnist with the Scripps Howard News Service, and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University. He has addressed several gatherings organized by the Club for Growth and the National Taxpayers Union.