Associated Press
In the two weeks since the elections, there's been a subtle shift in Republican rhetoric when it comes to debt reduction and tax policy. Whereas the GOP line in recent years has focused solely on spending cuts, the post-election debate has a new premise: we're not debating whether there will be new revenue; we're debating where that revenue will come from.
While it's a welcome change, it's important to realize that the new Republican line is still very far to the right, and completely divorced from any sensible understanding of budget and/or economic policy.
Consider, for example, what House Republican Policy Committee Chairman Tom Price (R-Ga.) told CNN yesterday. The far-right lawmaker began by saying "a real solution includes both revenue increases and spending reductions," which sounded encouraging, until he explained the fine print:
"Tax revenue, which means broadening the base, lowering the rates, closing the loopholes, limiting the deductions, limiting the credits, and making certain that we identify the appropriate spending reductions so that we have, indeed, a balanced approach. [...]
"Well, again, we would be happy to look at [increased tax rates] if it solved the problem. The problem is, it doesn't solve the problem. We want a real solution, which means increasing tax revenue through pro- growth policies.... Tax increases to chase ever higher spending is a fool's errand. What we need to do is have that balanced approach that we've all been talking about, which, again, is increasing revenues through a process of tax reform, and then spending reductions."
Price twice used the phrase "balanced approach," which is identical to President Obama's preferred language, but the two clearly don't mean the same thing.
In Price's mind, if tax rates go up on the wealthy, and the Treasury starts collecting more money, the Treasury will actually start collecting less money. Why? Because asking "job creators" to pay Clinton-era tax rates will be so awful for the economy, Price's argument goes, there will be fewer wealthy people with less wealth paying less in taxes.
The only acceptable solution, then, is to have even lower taxes, coupled with spending cuts, paid for by closing loopholes and deductions that Republicans still won't identify.
There is no sane economic model in which this makes any sense at all. On the contrary, every shred of evidence points in the exact opposite direction -- higher rates on the wealthy do not depress economic growth, more revenue does not mean less revenue, and there simply aren't enough loopholes and deductions in existence to pay for the GOP's preferred approach.
The larger point is simple: the shift in tone notwithstanding, congressional Republicans and their economically illiterate approach to debt reduction really haven't changed much at all.
Leave a Comment:
The other phrase that jumps out at me is "broadening the base" - in other words, raising taxes on the poor.
Yeah, this is key. Cut services to the poor and raise taxes on them. All so they can further fellate the rich.
Sorry boys but the Rich don't have enough money to bail out the free stuff electorate. If you really, really, want to raise taxes on the rich, OK. But everyone else gets to contribute too.
Clinton rates for all. It's patriotic, you know.
Dang, Shooter. I thought you were waking up.
First, businesses and investors get more use from infrastructure so why should they not pay a little more?
If trickle down was so effective, why did the Americans and French tell their aristocracy to take a hike?
And, it is only good business sense to properly maintain your plant assets and provide adequate food, housing, health care and training for your livestock. That's the point to the story of the goose that laid the golden eggs.
"Broadening the base" might mean capping the mortgage interest deduction. I am amazed at how much a small house costs near a large city in the East or California. Working folks often pay $20,000 a year in interest!
Another approach might be a value-added tax. Sometimes this is collected as a national sales tax but sometimes hidden by taxing business as goods move from manufacturer (importer) to wholesaler to retailer. Too European for Republicans? I don't think so.
Mang,
They already pay a LOT more, both in income taxes and usage of infrastructure. For instance, property tax, assets tax, road taxes, fees, auctions, and leases.
Please. When was the last time a poor person gave you a job? Like it or not labor is a bunch of people standing around - waiting for someone with an idea - and the MONEY to pursue it, arrives needing help.
Who bought the plant assets and livestock, while paying for their food, housing, healthcare, and training? Business always comes first. Without business and profit there are no jobs and no tax revenue. Trickle down.
just re-post "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945" from the CRST, please.
then sit people, like the one apparently shooting-up here, down and make them read it. you know, kinda like clockwork orange.
and while we're at it, let them know that a "value-added" tax (sales tax to those who might be confused) is probably one of the most regressive forms of taxation known. the poor spend all of their earnings to survive. a value-added tax would apply to just about every cent they spend (and that's EVERY CENT) where a rich man spends an insignificant portion of his earnings to survive (unless you consider yachts).
and, yes shoot-em-up, i've been offered jobs by poor people. i even took one. it was a very rewarding time. i saw a man with nothing working his butt off for almost nothing in return. he was a capable businessman who got caught in forces he had no control over and went under due to no fault of his own. and he was sadder for having to let me go than he was for himself.
so, shut it shooter. you are shilling for failed policies and lying to boot.
I just don't get it shooter. You are insane. You want to continue the trickle down policy of the last 30 years that got us into this mess, but you expect it to turn around. Doing the same thing over and over again and expecting a different result is psychotic at best. You need to get your head examined.
Just admit it though, you wanted President Obama to win. If Romney won then you wouldn't be getting $20 to post this garbage. There would be no need to pay you any longer for this dribble.
But the fact is this fellow let you go because he had nothing to pay you with, no? As in nothing to "trickle down" to you.
Why are you people so thick you can't see that employers have to have more money than you, just so that they can pay you. As in trickle down? Which part of that are you having trouble with?
Getting into specifics is tedious time consuming work. The right simply prefers that you trust them to do what is best(for their rich and corporate sponsors). Sure their trickle down bull has been tried and failed but hey, if at first you don't succeed keep trying the same failed methods.
Now that the wealthy have most of the money you can expect them to hold the economy hostage. They might crash your 401s by getting out of the market(hoping of course the 401s will prop things up so they wont take a huge loss) They might beef up outsourcing while continuing to claim our education system is lacking.(even though most Chinese never get to go to school nor do most of India's people) They have the money and money is power(until it becomes so concentrated that the majority of the people simply pull together and decide to get rid of a moneyed society in favor of a barter system.)
Utopia may come to us by accident as the rich get more arrogant and the government gets too bought off.
"Broadening the base" is GOP language for taxing po folks.
Loopholes are always a great word to use. in GOP vernacular, "closing loopholes" and not identifying which ones, usually means the middle class medical and mortgage deductions are taken away.
These guys are pretty special.
Do rich people really use loopholes? I know you can use the mortgage interest deduction for a second home and, I've heard, for your boat, if you can live there. I've never seen a breakdown on who benefits most from the usual deductions. If I were rich, I would pay off all my debts, and never pay interest again. However, perhaps my financial manager would say different.
In other words, we don't accept the results of the election and we are going to pretend that America supported our economic vision. Head in sand, nothing new to see here.
Except their butt in the air.
What republicans are proposing is a mirror image of what Romney proposed. HE LOST!
The Republican party won't compromise. The only hope of a balanced deal is for Democrats to pound the message of their intransigence to the public and peel off any GOP House members from blue states who might (now) be worried about challenges from the left. If Allen West finally concedes his race, we'll need to flip fewer than 20 votes in January to bring middle class taxes back down to current levels. I know, Boner still has to bring the bill to the floor -- but he'll be savaged in the press if he doesn't.
If raising taxes is so evil, why did Reagan increase them again when he discovered he'd cut taxes too much? Why was Clinton able to balance the budget after taxes were increased in 1993 with no republican votes in support? Again ITS THE MATH STUPID! Didn't the GOP learn anything from the election?!?
Yes, they "learned" to ignore what they don't like. As for Raygun - even he wouldn't be able to get elected with today's GOTP'ers.
"Math" that's for "those people" who are snobs because they want to "learn".
Got it now.....
no shock here.
Republican economic thinking will always say 2 and 2 is 3. They can not and will not change because they are too stupid.
If Obama falls for this nonsense -- and I'm not confident that he won't -- he'll have pissed away a good part of his victory and all the hard work people put in for it. (And so will the Senate if they fail to deliver some sort of filibuster reform to doesn't get nominations through.) Obama ought to be insisting on not only higher top marginal tax rates but also capital gains tax rates going up. It would help if he put even more pressure and demanded a carbon tax. But Obama doesn't play poker that way, unfortunately.
Let the Bush tax cuts die. Then Obama will be in the drivers seat. Until then we are giving Republicans too much say.
The new GOP mantra: 'We lost the election but the AMERICAN PUBLIC was really WITH us. Do exactly what we want and we'll call it bipartisanship.'
You hit the nail on the head Mego. That is exactly what they think...
This is all smoke and mirrors. The GOP doesn't give two craps about any of this fiscal responsibility crap. This is just a ploy designed to derail a president they hate with every scrap of their beings. If the national debt was suddenly paid off today by some magical means, they'd just find another smokey mirror to hide behind while they snipe, block and deride the president at every turn. They are not against his policies, they are against the man, the man's skin color and the man's popularity because he threatens their self identity and their lunacy. It is truly amazing to see how hatred, bigotry and racism have twisted the GOP into a party of NO ideas, NO progress and NO logic. A simple look at the demographics of five of the last six presidential elections will show in simple black and white that the GOP has become a party whose supporters are rich, aging, white evangelicals who see themselves as the victims in a society where they have almost all of the wealth and power.
Amen Aaron.
Nobody elected Grover Norquist. But the Republican House members who signed his pledge not to raise taxes have made him Dictator over our nation's tax policy and our economic future.
This is why the right plan is to let everything expire on January 1. Once these goddamned fools, traitors and con artists finally realize that the President is no longer President "Can't We All Just Get Along?" and is serious, and when they see the country blaming them for what happened, they'll finally be in the right position (flat on their face and kicked to the curb) to negotiate with. There's no way to deal with them till they have been taken down.
All we have to do is convince the morons in D.C. that it's NOT a "fiscal cliff." If's a "fiscal curb" as Lawrence O'Donnell puts it.
As a small business owner, and as every other one, I know that the surest way to reduce one's tax bill is to invest in your business as purchases of capital equipment--100% write off in the first year as part of the stimulus--and increasing payroll, as both are tax deductible. So in the light of high taxes, a business has the choice of giving the money to the government or expanding the business, an easy choice, in my opinion. Could this be the driver of broad based prosperity during periods of high marginal tax rates? Could raising tax rates spur business investment and hiring? Another question is: do low capital gain tax rates discourage long term investment and encourage short term thinking among business? How about some of you economist folks enlightening this poor ignorant engineer about this stuff--Mr Krugman, are you out there?