Jump

 

Clinton-era income tax rates, we are told, were positively the best things ever to bless the American economy. Higher taxes yielded untold boons: budget surpluses; robust economic growth; intern White House pizza delivery—an unbroken chain of beneficent causality.

However, if current tax rates—curiously referred to as the Bush tax cuts more than a decade after passage—expire and we go the Full Clinton (in the economic sense), higher taxes will push the economy over a fiscal cliff and into another of those recessionary crises that Rahm Emanuel was so fond of not wasting a few years back.

What gives? After all, celebrated investor Warren Buffett assures us that, notwithstanding his contrary actions and counsel over fifty years, marginal tax rates have no effect on investment decision-making. And we have a $1.3 trillion annual federal budget gap to close somehow before Mr. Bernanke runs out of real assets to buy with imaginary money, not to mention some $60+ trillion in unfunded obligations looming just over the horizon.

If the Clinton tax rates were so great then why not have them all back, along with some modest reductions in the rate of spending growth courtesy of the Budget Control Act of 2011—the dreaded sequester? Let President Obama extoll the Clinton tax hikes to the 111 million taxpayers affected, including the 5 million added back onto the income tax rolls.

Negotiating with ourselves is not working, and the president is doing nothing substantive—unless you credit preparations for his $4 million three-week Hawaiian vacation. Mr. Obama hopes to splinter the Republican Party on a political cliff of his design, thereby fixing the ascendancy of his new New Deal coalition. Let’s disappoint him: why not link arms and jump?

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  1. Profile photo of Lavaux Inactive

    So says this broken record:

    1. Democrats and their MSM propaganda partners will assign blame to the GOP for everything blameworthy regardless of facts, reason or truth.

    2. Facts, reason and truth no longer matter in politics; This is the dawning of the Age of Orwell.

    3. The federal government and the Democrat Party are in a symbiotic relationship whose primary interests are hostile to America’s interests as understood at her founding. The MSM and the Democrat Party also share a similar symbiotic relationship, one of whose primary goals is to destroy the GOP.

    4. The vast majority of America’s adults are too ignorant, foolish or dependent on government to wisely self-govern.

    5. Americans want a federal welfare state that they’re not willing to pay for and probably could not afford even if they were willing to pay.

    6. The cost of the current welfare state is approximately 50% of every American’s gross pay.

    These are the facts. So what do you do if you’re Boehner? I think you go over the cliff while telling Americans that everyone must pay a lot more for what they’re getting from government. Pay less get less.

    • #1
    • December 1, 2012 at 1:48 am
  2. Profile photo of Paul Erickson Member
    Scott Reusser: The rub: Immediately post-cliff, Dems would propose a tax cut for those making under 200 grand (or whatever). Would Republicans then officially become the party that resists such cuts? Would Dems then officially become the party that favors such cuts? That would be a disasterous reversal of party reputations, I’m afraid.

    A better idea might be one outlined by Guy Benson at Townhall: Republicans should unequivocally embrace Bowles-Simpson. Submit it asour bill. Force Obama to reject his own commission’s proposal. If he does, then he puts himself in a much weaker position politically than he’s in now. On the other hand, if he accepts it, then we have a deal that is on balance pretty conservative — certainly more conservative than anything we can reasonably expect in the current circumstances.

    What do you think of Benson’s idea, George? Personally, I can’t find a down side. · 7 hours ago

    Edited 7 hours ago

    Joe and Jane Voter don’t connect the administration with this thing called “Simpson-Bowles” (or Bowles-Simpson.) The idea is sound, but don’t expect Obama to pay a price for rejecting it.

    • #2
    • December 1, 2012 at 4:52 am
  3. Profile photo of HVTs Member
    Paul Erickson

    Joe and Jane Voter don’t connect the administration with this thing called “Simpson-Bowles” (or Bowles-Simpson.) The idea is sound, but don’t expect Obama to pay a price for rejecting it.

    I think this is an important point. Simpson-Bowles is already flushed down the memory hole of all but the highest of high-information voters.

    If the opposition wanted to make it a serious source of distinction, they should have done so when it was in the news and then hung with it through the electoral cycle. In fact, that will be a source of criticism: if it was such a good idea, why was so little heard about S-B during an excruciatingly long primary season or during the Romney-Ryan campaign?

    It’s hard to imagine that in dragging S-B out now it will magically gain traction it never did before. If nothing else, put the old wine in a new bottle. Acknowledge the new plan’s antecedents, but don’t make that a prominent selling point.

    • #3
    • December 1, 2012 at 6:46 am
  4. Profile photo of Scott R Member
    Paul Erickson
    Scott Reusser:

    A better idea might be one outlined by Guy Benson at Townhall: Republicans should unequivocally embrace Bowles-Simpson. Submit it asour bill. Force Obama to reject his own commission’s proposal. If he does, then he puts himself in a much weaker position politically than he’s in now. On the other hand, if he accepts it, then we have a deal that is on balance pretty conservative — certainly more conservative than anything we can reasonably expect in the current circumstances.

    What do you think of Benson’s idea, George? Personally, I can’t find a down side.

     

    Joe and Jane Voter don’t connect the administration with this thing called “Simpson-Bowles” (or Bowles-Simpson.) The idea is sound, but don’t expect Obama to pay a price for rejecting it.

    Surely some voters know what Simpson-Bowles is — the electorate being a continuum of ignorance. And surely some would learn during the course of the news coverage.

    But even if you’re right, Paul, we still wouldn’t be in any worse place than we are now. Which means we still haven’t found a down side to this strategy.

    • #4
    • December 1, 2012 at 6:48 am
  5. Profile photo of Herbert Member

    Go over the cliff, then dems propose middle class tax relief, are the republicans really gonna gonna say to the American peeps…. We don’t want those earning under 250k to get tax cuts?

    • #5
    • December 1, 2012 at 6:55 am
  6. Profile photo of Herbert Member

    TThe rub: Immediately post-cliff, Dems would propose a tax cut for those making under 200 grand (or whatever). Would Republicans then officially become the party that resists such cuts? Would Dems then officially become the party that favors such cuts? That would be a disasterous reversal of party reputations, I’m afraid.Exactly

    • #6
    • December 1, 2012 at 6:57 am
  7. Profile photo of Scott R Member
    HVTs
     

     

    I think this is an important point. Simpson-Bowles is already flushed down the memory hole of all but the highest of high-information voters.

    If the opposition wanted to make it a serious source of distinction, they should have done so when it was in the news and then hung with it through the electoral cycle. In fact, that will be a source of criticism: if it was such a good idea, why was so little heard about S-B during an excruciatingly long primary season or during the Romney-Ryan campaign?

     

    …..because during the campaign we were offering our own plan. Now, post-loss, we’re acknowledging the defeat of our plan and offering a compromise — which, lucky for us, happens to be relatively conservative.

    Pounding home the point that Obama is rejecting his own commission’s proposal for a bipartisan compromise is the least bad place for Republicans to be right now. And certainly having that rejection on the record strengthens us down the road if/when the negotiations completely break down.

     So, in a sense, this plan would lay the groundwork for George’s plan.

    • #7
    • December 1, 2012 at 7:02 am
  8. Profile photo of billy Member

    I hate to say it, but I think you are right.

    • #8
    • December 1, 2012 at 7:08 am
  9. Profile photo of Steven Jones Coolidge

    Too true. Progressives have spent most of the past decade waxing nostalgic over Clintonion tax rates – they ought to be delighted at the prospect of their return.

    Incidentally, why don’t Democrats own the Fiscal Cliff? Wasn’t it they who insisted that the Bush rates must have an expiration date? Haven’t they declined every opportunity to make the rates permanent?

    Own it, Progs!

    • #9
    • December 1, 2012 at 7:13 am
  10. Profile photo of Leigh Member
    Scott Reusser

     — the electorate being a continuum of ignorance. 17 minutes ago

    Argument aside, I love this phrase. 

    I’m inclined to like the Bowles-Simpson idea. Sometimes bipartisanship is your best defense when you’re accused of unreasonable nastiness.

    “All we’re asking the President to do is to follow his own debt commission’s recommendations.” Far easier to make that argument in 30 seconds than anything else the Republicans can come up with.

    • #10
    • December 1, 2012 at 7:23 am
  11. Profile photo of Fake John/Jane Galt Thatcher

    I am for letting them expire. If Obama does not like them then let him make his own tax cuts and push them through. We can then spend the next 10 years complaining about his tax cuts.

    • #11
    • December 1, 2012 at 7:24 am
  12. Profile photo of Punumba! Member

    Why don’t we join hands and jump? Because the economy would crash and Republicans, not Democrats would get the blame. And really, they don’t want the return of the Clinton tax rates, they only want the return of the Clinton tax rate on those making over $250 thousand a year…

    • #12
    • December 1, 2012 at 7:41 am
  13. Profile photo of HVTs Member

    Yup, it’s time to stop arguing and just hunker down. All those who oppose Obama and that walking soporific Harry Reid should just vote ‘present.’ Americans can then see what happens when Alinskyites get exactly what they want. Too few people pay federal income tax and this is a chance to start correcting that reality Why soften the blow on Democrat voters while socking it to mainstream Republican supporters?

    • #13
    • December 1, 2012 at 7:52 am
  14. Profile photo of David John Inactive

    As I’ve proposed before on this blog, PULL THEM OVER THE FINISH LINE! It’s an old jujitsu move, when they lunge, pull!

    Most people barely notice the gradual degradation of morals and economy. But if disaster comes quickly there might be enough people nostalgic about free markets.

    Otherwise, we are destined to live in “interesting times”. For me? I just want to see what happens next! History is happening.

    • #14
    • December 1, 2012 at 7:53 am
  15. Profile photo of Roberto Member
    George Savage: Let’s disappoint him: why not link arms and jump? · · 54 minutes ago

    Channeling your inner Krauthammer I see Mr. Savage. You have a point, you both do.

    The ideal appeals if for no other reason that it would be well to see Speaker Boehner finally show some spine. 

    • #15
    • December 1, 2012 at 7:55 am
  16. Profile photo of HVTs Member
    Scott Reusser: The rub: Immediately post-cliff, Dems would propose a tax cut for those making under 200 grand (or whatever). Would Republicans then officially become the party that resists such cuts?

    Agreed . . . that’s the Dem’s next gambit. Two possible responses.

    1. Out class-warfare the class warfighters. Forget $200K . . . make it families earning $100K, singles making $50K … the real middle class, not the faux middle class living on federal Senior Executive Service or General Officer salaries in leafy Washington suburbs. The strategic goal: with skin in the IRS game, voters think twice about government give-aways like Obamaphones. Getting more and more tax payers at lower and lower income levels is a political winner for those seeking fiscal sanity. It requires demonizing the notion that at over $100K you’re still middle-class and can have your federal government for free.

    2. Accept one-for-one tax cuts with spending cuts. Dems look ridiculous if they oppose fiscally neutral tax cuts in the face of massive deficits. This concedes Republicans lost the fight for spending cuts exceeding revenue growth. They lost because, well … Republicans @#$& at Presidential politics. [McCain ’08. Romney ’12. I rest my case.]

    • #16
    • December 1, 2012 at 7:56 am
  17. Profile photo of Commodore BTC Member

    Bad idea, we don’t have the media or quality leadership to make this argument and avoid getting all the blame.

    the GOP may get the blame regardless, but they will definitely get the blame if the House fails to pass a bill that extends the middle/lower tax brackets

    • #17
    • December 1, 2012 at 8:02 am
  18. Profile photo of HVTs Member
    Punumba!: Why don’t we join hands and jump? Because the economy would crash and Republicans, not Democrats would get the blame. And really, they don’t want the return of the Clinton tax rates, they only want the return of the Clinton tax rate on those making over $250 thousand a year…

    As though Republicans won’t get blamed when the economy fails to recover because America’s entrepreneurs/small business owners are robbed of the incentive to invest, grow and innovate? Since they get blamed either way, why give Democrats the red meat they need to feed their base? Call the sucker’s bluff and let him explain the expanded tax rolls, and a collapsed defense-dependent Virgina economy.

    • #18
    • December 1, 2012 at 8:03 am
  19. Profile photo of Scott R Member

    The rub: Immediately post-cliff, Dems would propose a tax cut for those making under 200 grand (or whatever). Would Republicans then officially become the party that resists such cuts? Would Dems then officially become the party that favors such cuts? That would be a disasterous reversal of party reputations, I’m afraid.

    A better idea might be one outlined by Guy Benson at Townhall: Republicans should unequivocally embrace Bowles-Simpson. Submit it as our bill. Force Obama to reject his own commission’s proposal. If he does, then he puts himself in a much weaker position politically than he’s in now. On the other hand, if he accepts it, then we have a deal that is on balance pretty conservative — certainly more conservative than anything we can reasonably expect in the current circumstances.

    What do you think of Benson’s idea, George? Personally, I can’t find a down side.

    • #19
    • December 1, 2012 at 8:04 am
  20. Profile photo of Scott R Member

    Here’s the link to Guy Benson’s argument for the Simpson-Bowles strategy. He makes the case better than me.

    Leigh
     

     

    “All we’re asking the President to do is to follow his own debt commission’s recommendations.” Far easier to make that argument in 30 seconds than anything else the Republicans can come up with. · 34 minutes ago

    Yep.

    • #20
    • December 1, 2012 at 8:04 am
  21. Profile photo of Tom Lindholtz Inactive

    I think going over the cliff could be a good thing. If it is important to have a fair tax system, then raising everyone’s taxes is fair. And if eveeryone’s taxes go up, then everyone may begin to undeerstand what government costs. There are times when a lesson is worth learning….even if it is expensive.

    • #21
    • December 1, 2012 at 8:05 am
  22. Profile photo of WI Con Member

    Thank you George Savage! I’ve heard enough from Obama & Clinton about how great it was before W. Unfortunately, people need a reminder of the good old days. It also has the benefit of tarnishing Hillary should she want to run.

    Progressives continue to insist that there’s nothing to the Laffer Curve – well, time to show them that theory works ( again).

    • #22
    • December 1, 2012 at 8:11 am
  23. Profile photo of HVTs Member
    Scott Reusser

    …..because during the campaign we were offering our own plan. Now, post-loss, we’re acknowledging the defeat of our plan and offering a compromise — which, lucky for us, happens to be relatively conservative.

    Pounding home the point that Obama is rejecting his own commission’s proposal for a bipartisan compromise is the least bad place for Republicans to be right now. And certainly having that rejection on the record strengthens us down the road if/when the nogotiations completely break down.

    With respect, it sounds like a great plan for winning minor debating points that only committed, high-information types like us might care about. What needle does it move for 2014 and 2016? I don’t claim any great insight on my own question . . . just suggesting that “pounding home” that Obama “rejects his own commission’s proposal” seems like really small beer at this stage in the epic fiscal failure that America is fast becoming. Maybe I’m too gloomy, but talk of “having that rejection on the record” just seems like Hitler fantasizing in his final underground bunker.

    Because he owns MSM, Obama has zero difficulty side-stepping the sort of debating points you describe.

    • #23
    • December 1, 2012 at 8:21 am
  24. Profile photo of Free Radical Inactive

    Going over the cliff will teach progressives and low knowledge voters nothing. It will push the US into a mild recession and increase business failures and unemployment . Best to embrace Simpson – Bowles loud and clear and as the president, for the benefit of our country, to sign it into law

    • #24
    • December 1, 2012 at 8:25 am
  25. Profile photo of Joseph Stanko Member
    George Savage: Clinton-era income tax rates, we are told, were positively the best things ever to bless the American economy. Higher taxes yielded untold boons: budget surpluses; robust economic growth; intern White House pizza delivery—an unbroken chain of beneficent causality.

    You mock, but I think you underestimate how politically effective this argument is.

    The left claims the rich should pay their “fair share,” and points to the fact that Romney paid a lower effective tax rate than most middle class voters, and that Warren Buffet loudly proclaims that he pays a lower tax rate than his secretary.

    The right responds that we cannot raise taxes on the rich because they are the “job creators” and this will ruin the economy. We seldom challenge the “fairness” premise, implictly conceding that we’re fine with the rich paying lower tax rates than the middle class so long as this helps the economy.

    The left then responds by pointing to the Clinton years. They don’t need to show that higher taxes caused the boom years, merely that higher taxes did not prevent the boom years that followed.

    • #25
    • December 1, 2012 at 8:33 am
  26. Profile photo of George Savage Admin
    George Savage Post author
    Roberto
    George Savage: Let’s disappoint him: why not link arms and jump? · · 54 minutes ago

    Channeling your inner Krauthammer I see Mr. Savage. You have a point, you both do.

    The ideal appeals if for no other reason that it would be well to see Speaker Boehner finally show some spine. · 12 hours ago

    Roberto, just scanning the comments over a hot cup of coffee on this drizzly NorCal morning, followed your link and read Dr. Krauthammer’s piece.

    I sure am tracking the esteemed columnist on this issue. We even both use the descriptor “Full Clinton,” which I thought was a clever Full Monty homage of my own invention. (Note that, unlike Krauthammer, I capitalize both words, believing that descriptions of the Big He should always be treated as proper nouns.)

    • #26
    • December 1, 2012 at 8:49 am
  27. Profile photo of George Savage Admin
    George Savage Post author
    Scott Reusser: [Comment #10]

    What do you think of Benson’s idea, George? Personally, I can’t find a down side. · 12 hours ago

    Edited 12 hours ago

    Scott, if I thought Benson’s idea would work I would support it. I don’t.

    Enacting a comprehensive solution like Simpson-Bowles will require months of drafting and negotiation–there is no bill to pass, just a proposal. This is not something that can be agreed by a few people in secret, worked into legislative language and passed in the next few weeks.

    And the president isn’t interested in negotiating. He figures he and his allies have the whip hand.

    I think the best option for House Republicans is to pass a one-year extension of current income tax rates and adjourn for the holidays, pointing to President Obama’s support for a similar bill in 2010.

    On January 1st, we either have a budget sequester and the complete Clinton tax rate package, which the president opposes, or a budget sequester and current tax rates. Mr. Obama can choose.

    Seems better than higher taxes now without a sequester, followed by even higher taxes next year and yet more “stimulus” spending.

    • #27
    • December 1, 2012 at 9:14 am
  28. Profile photo of mask Inactive
    Joseph Stanko
    mask: Joseph Stanko:Good point.We should also discuss fairness/unfairness. Is it fair to load up future generations of debt? 

    The left would answer: “No, it’s not fair. We think it’s fairer to ask the wealthy to pay more now rather than pass the burden on to our children. We have high debt because the stubborn Republicans won’t let us raise taxes on their rich buddies.” · 9 hours ago

    Sure, the left have an answer for everything. But in this particular case it’s easy to show that this is not true. Mark Steyn simply and brilliantly (as well as Iowahawk) demonstrate that the rich aren’t rich enough to make us solvent. I appreciate your talent for knowing how the left sees things but we must have and use simple ways of refuting them on moral grounds. Which is why I mentioned the unfairness of harming the prosperity of the middle class by hurting the economy. Of course the left will just go back to Clinton’s tax hikes that didn’t hurt the economy but liberals tend to shut down when you mention the Clinton spending levels.

    • #28
    • December 1, 2012 at 10:10 am
  29. Profile photo of Commodore BTC Member
    I think the best option for House Republicans is to pass a one-year extension of current income tax rates and adjourn for the holidays, pointing to President Obama’s support for a similar bill in 2010.

    On January 1st, we either have a budget sequester and the complete Clinton tax rate package, which the president opposes, or a budget sequester and current tax rates. Mr. Obama can choose.

    Slight modification, pass the one year extension of the highest rate and all other rates as two seperate bills. Otherwise Obama can say the GOP insisted on tax cuts for the rich and that’s why everyone’s taxes went up. 

    That way Obama can let taxes go up for the highest bracket, but the GOP will not have voted for it and it will be harder to blame them for the coming recession, since Obama got what he claims he wanted. 

    EDIT: look, it’s already happening

    @rcpvideo 8 minsObama Accuses GOP Of Holding Middle Cut Tax Cuts “Hostage” In Weekly Address: PRESIDENT OBAMA: Hi, everybody. I’… bit.ly/VgA3bG

    By separating into two bills, Obama will have to explain why he is holding middle class tax cuts hostage.

    • #29
    • December 1, 2012 at 10:12 am
  30. Profile photo of Leigh Member
    mask

    Sure, the left have an answer for everything. But in this particular case it’s easy to show that this is not true. Mark Steyn simply and brilliantly (as well as Iowahawk) demonstrate that the rich aren’t rich enough to make us solvent. I appreciate your talent for knowing how the left sees things but we must have and use simple ways of refuting them on moral grounds. Which is why I mentioned the unfairness of harming the prosperity of the middle class by hurting the economy. Of course the left will just go back to Clinton’s tax hikes that didn’t hurt the economy but liberals tend to shut down when you mention the Clinton spending levels. · 0 minutes ago

    This would have worked better before the election. In the average voter’s mind, I’m guessing it’s case closed and we lost the argument.

    • #30
    • December 1, 2012 at 10:15 am
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