Tag Archives: ethics

Republicans, Fiscal Cliff, and Spending

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We’ve wondered here, there, and elsewhere why the “fiscal cliff” negotiations are occurring in secret.  Is it because the Republicans have been planning on folding all along, and they’re trying to keep that quiet until the last moment?  Is it because they naively think Democrats will negotiate in better faith if they don’t have to be seen as folding to the Republicans until the last moment?

Whatever the excuse, it’s got to stop.  Tried that the last several weeks, it’s failed utterly.  Now it’s time for the Republicans to take overt, public action.  Marc Thiessen, in The Washington Post, has some thoughts on what that overt, public action should look like.  In the main, I agree with him; excerpts below.  RTWT.

…pass legislation extending current tax rates for all Americans.  Let Obama reject it and take us over the “fiscal cliff”—and then be prepared to live under the Clinton tax rates while negotiations on tax reform continue.  In the short term, Americans may blame you.  You can recover from that.  What you will never recover from is surrendering your principles and giving up your brand as the party of low taxes and limited government.

But those Clinton tax rates are wonderful, don’t you know: when Republicans got them cut, across the board, during Bush the Younger’s administration, those tax cuts were, according to our Progressive betters, only good for the rich; the middle class could never benefit from them.  Thus, it’s plain that reverting to those rates can’t possibly harm the middle class since the lower rates never did us any good.   And, of course, those wonderful Clinton tax rates went along with Clinton’s spending rates—some one-third of President Barack Obama’s.  But never mind about that.

Additionally, Obama and his publicity machinethe NLMSM will ensure that Republicans get the blame; there’s no “may” to it.  As Thiessen points out, though, they can recover from this—see below.

Go on the offensive.  Immediately put forward a plan to fundamentally reform the tax code.  You will be able to outbid Obama and the Democrats in any tax-cut fight.  And the intellectual groundwork has already been done.  During the supercommittee negotiations last year, Sen. Pat Toomey (R-Pa.) put forward a plan to lower rates, raise revenue and limit deductions.  Sen. Rob Portman (R-Ohio) has a revenue-neutral corporate tax reform plan that lowers the rate to 25 percent and moves to a territorial system.

On the spending side, “soak the rich” by getting rid of the billions of dollars in government benefits, taxpayer subsidies and corporate welfare the wealthy receive each year and don’t need, and by means-testing government programs from unemployment benefits to farm subsidies.

On entitlements, put forward a plan to save Social Security and Medicare through structural reforms and by reducing benefits for well-off retirees and eliminating them entirely for the wealthiest seniors.  Propose a “Buffett Rule” of your own: Warren Buffett does not need taxpayers to subsidize his retirement and health care.

The Romney tax reform proposal is a good place to start: personal income tax rates cut 20% across the board with total deductions capped at $50,000, and business income tax rates cut to a peak rate of 25% (still too high, but it’s a start).  Also, include in the tax reform the Obamacare investment taxes and the medical device tax—these should be withdrawn entirely.  There’s already significant Democratic support for getting rid of these jobs killers.

The corporate welfare cuts should include subsidies to oil and gas companies (chump change) and to “green energy” businesses and dependencies (not at all chump change) alike.

Social Security and Medicare should be privatized altogether; however, that’s…unlikely…this year.  Severe means-testing is a good start, though.

Pass your plans.  If the president refuses to negotiate and no progress is made by February, inform him that you will attach all or part of your plan to legislation raising the debt limit and pass it in the House.  Then do so.

Obama’s failure here will put both serious spending and tax reform, and default, on his plate.  Not even the NLMSM will be able to cover up Obama’s disaster here.  Moreover,

According to Bob Woodward, when Obama told his advisers he intended to veto the debt-limit bill the Republican-controlled House had passed, Treasury Secretary Tim Geithner told him he couldn’t—that if Republicans didn’t give in, he had no choice but to sign their bill.  “You can’t veto,” Geithner reportedly told Obama, because the consequences “would be indelible, incurable.  It would last for generations.”

Now Republicans know better.

We’ll see if they’ve found any courage.  So far, I’m not sanguine.

Online Sales Taxes and State Revenues

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Governor Christine Gregoire (D, WA) and Sally Jewell, President and CEO of REI, have an op-ed in a recent Wall Street Journal.  In it, they claim a desire to “level the sales-tax playing field” by imposing a national requirement for online retailers to pay local state sales taxes.

Local retailers—who create jobs for our families, friends and neighbors—have long been required to collect and remit state sales taxes.  By contrast, online vendors that operate from out of state are under no such requirement, even though the taxes are still owed by the consumer in the 45 states that collect sales taxes.  This disparity undermines the competitiveness of the retail marketplace….

They claim a “cost:”

… diverts $23 billion from state and local treasuries every year.

And

For every supposedly tax-free sale, fewer dollars are available for schools, infrastructure, public-safety providers or (in flush times) tax reductions.

Never mind that online retailers also create jobs for “families, friends and neighbors.”  Those families, friends, and neighbors aren’t constituents of any concern.  Never mind the evident lack of tax reductions.  There’s always a good cause on which Democrats—and too many Republicans—should spend OPM.

A clue bat is here, in Gregoire’s and Jewell’s own words, but the bat swung and missed [emphasis added]:

Imagine a customer who walks into a sporting-goods store and asks for help in buying the coolest new running shoes.  An attentive salesperson spends half an hour with the customer to find the most comfortable fit, the best performance and the right price.  Just as the salesperson thinks she has found the ideal pair, the customer decides to make the $100 purchase via smartphone from an online competitor who doesn’t charge sales tax.

They omit another path to “leveling the playing field:” lower their in-state sales and other taxes levied on their brick and mortar businesses.  Watch the increase in economic activity from the suddenly lowered costs to the consumer/taxpayer, which increase will produce a net increase in revenues for the state government.  Besides which, the states (and I’m not just picking on Washington here) have not established they really need all that revenue, that they really are not doing things better left to the private sector.

Public pension systems have become famous for their bloat, for the overly optimistic assumptions state governments make concerning expected rates of return and state bureaucrat investment acumen.  Were these moved from defined benefit to defined contribution, the private sector would do a fine job of managing these public employee retirement programs, for instance.  As a first step in this transition, the state governments should publish widely the return on investment assumptions on which they base their pension benefit and taxpayer contribution requirements; alongside these, state governments should publish their empirically achieved return on investments.

Schools?  Get out of the way of school choice in the hands of the parents.  Pouring more money into the coffers of failing public schools only enriches the unions running those schools; it does nothing for the students damaged by those schools.

Infrastructure?  Stop paying union rates for the construction unless those rates win a truly competitive bid process.

And so on.

It’s for the several states to fix their own gaping potholes on America’s Main Streets.

There’s Secession and There’s Secession

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There are petitions on the White House’s Web site, signed by a sufficient number of petitioners to require a response from the White House, advocating secession from the union by various states.  These are being carefully ignored, but that’s a different story.

In Wisconsin, when the democratic process went against Democrats, those Democrats seceded from Wisconsin, decamping for motels in Illinois.  They remained in their state of rebellion for weeks, paralyzing Wisconsin’s government, attempting to destroy the democratic process they hated so much.

In Indiana, when the democratic process went against Democrats, those Democrats seceded from Indiana, also decamping for motels in Illinois.  They remained in their state of rebellion for weeks, paralyzing Indiana’s government, attempting to destroy the democratic process they hated so much.

Now, in Michigan, when the democratic process went against Democrats, those Democrats seceded from Michigan, this time relocating nearby.  That these Democrats’ rebellion failed so quickly (but not for lack of effort) was only because Michigan’s laws made the Michigan Democrats’ secession toothless.  There were sufficient majorities (and no need for supermajorities) in both houses of the state’s government from non-Democratic Party representatives and senators to form a quorum in each house, and neither the Michigan government nor Michigan citizens’ continued access to democracy were harmed materially by the Democrats’ rebellion.

The state citizens’ petitions to secede from the union were never serious efforts to depart; they were protests of an overweening federal government, gestures only.

The Democrats’ secessions from those three state governments were not gestures.  They were conducted for the avowed purpose of bringing down those democratically elected governments so Democrats could impose their minority will on the majority; so Democrats could override the will of the citizens as implemented by their elected representatives to their governments.  What the Democrats could not achieve through the democratic process they attempted to force into being by force of rebellion.

“Elections have consequences.”  But those consequences are acceptable only when they serve Progressive ends.  That’s the face of Progressivism and the Democratic Party today: rather than abide by a democratic election result, secede and try to prevent government from functioning.

RINO Surrender?

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Fox News reported over the weekend that Senator Bob Corker (R, TN) now is saying Republicans

should cave to President Barack Obama on [tax rate increases] in order to not only resolve the current crisis but move on and start negotiating spending cuts, which could result in more significant deficit reduction.

Never mind that excessive spending—and runaway entitlements—are part of the current crisis.  Furthermore, with Obama getting his tax increases, there’ll be no spending cuts and no entitlement reform.  Corker knows full well that Democrat promises of spending cuts tomorrow in return for tax rate increases today are worthless.  And he’s begging for surrender anyway.

Corker said this to rationalize his surrender recommendation:

The focus then shifts to entitlements, and maybe that puts us in a place where we actually can do something that really saves this nation[.]

This is…naïve.  If the Republicans surrender on the tax rate increases, why should President Obama believe they won’t surrender on the debt ceiling, on spending cuts, on entitlement reform?  Why should any of the rest of us?

Corker wants to surrender.  That’s his right.  But let him do so as a private citizen.  This RINO needs to be replaced at the next election.  Republican acquiescence with Progressives’ demands over the last 80 years are how we got into this mess in the first place.  And the magnitude of the destructiveness of their demands has been especially manifest these last four years.  Our nation can’t afford any more of those policies.

Negotiating?

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The Progressives in our Federal government insist, with a straight face, that the Republicans have put forward no concrete proposals in the present budget…negotiations.  They carefully ignore the fact that the Republicans already have put forward three concrete proposals: two House-passed budgets (for 2011 and 2012, which contained explicit spending, taxing, and entitlement reform steps), and the proposal on which they campaigned last fall.

Oh, wait—the Progressives studiously ignored those, too—in the Senate, where they refused even to permit debate on the budgets and ever since, with their pretense that the spending, tax, and entitlement reforms of the campaign don’t exist.

The Progressives’ current position?  As The Wall Street Journal reports,

[M]any Democrats have ruled out any changes to Social Security during the current fiscal talks.

And

A senior administration official said the White House would make no new offers until Republicans changed their opposition to raising top tax rates.

Throughout this entire shabby charade, President Barack Obama has been accusing the Republicans of holding middle-class America hostage against their refusal to agree to tax rate hikes on his hated Americans.  Yet the Republicans and Progressives already agree on making permanent current tax rates on 98% of Americans.  It’s Obama who is threatening to blow up our economy on his ego trip of demanding 100% of a tax deal for which he already has 98%.

It’s Obama who’s threatening to blow up our economy by refusing to discuss spending cuts and entitlement reform at all—after agreeing that they should be on the table shortly after the election.

It’s Obama who’s threatening to blow up our economy with his insult of demanding sole debt ceiling authority in utter disregard of the Constitutional role of Congress—and not the President—in setting spending.

Update: Speaker John Boehner (R, OH) and a number fellow members of the Republican leadership made a counterproposal Tuesday that included much of Obama’s precious tax revenue increases–not as rate increases–to the tune of $800 billion, and $1.2 trillion in spending cuts.  Obama blew this off within the hour.  So much for negotiating.

Ex-Senator Rick Santorum, last night on Greta van Susteren’s On the Record,  said that Obama’s fallback–his Plan A–of Sequestration and tax rate increases across the board makes him entirely willing to take our economy over the cliff: Obama gets his tax rate increases, and he gets the Progressives’ decades-long fought-for cut in defense spending, a $500 billion reduction.  Obama sees this as a heads, I win; tails, you lose situation.

I think Santorum is right.