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Debunking Orszag's Tax Hike Myths

Posted By Conn Carroll On September 7, 2010 @ 3:00 pm In Obamacare | Comments Disabled

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Former White House Office of Management and Budget Peter Orszag may have left the Obama administration this past July, but The New York Times [2] has made sure his opinions won’t fall into obscurity. He is now a Contributing Columnist for the NYT op-ed page and his first effort is a tax-and-spend classic. We have paired some of Orszag’s op-ed statement “myths” with “facts” from JD Foster’s new paper: Obama Tax Hikes Defended by Myths and Straw Man Arguments [3]

Orszag: “In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether.”
Foster: “Extending the 2001 and 2003 tax provisions is not a tax cut; failure to extend these provisions is a tax hike. Failure to extend current tax policy would impose massive tax hikes on millions of Americans. Preserving current tax policy is not a tax cut.”

Orszag: “Over the medium term, the tax cuts are simply not affordable.”
Foster: “The problem is spending, not revenues. The country cannot afford to let current spending levels continue. Taxes as a share of the economy will soon exceed the historical average. The current and projected unsustainable deficits are due to Obama’s spending surge, not a shortage of revenue.”

Orszag: “Making all the tax cuts permanent would expand the deficit by more than $3 trillion over the next decade.”
Foster: “The Obama tax hikes, while enormous in their own right, are almost inconsequential compared to the size of the unfunded spending in Social Security, Medicare, and Medicaid. Tax relief enacted a decade ago did not cause excessive entitlement spending. Tax increases today and in the future would do little to address the long-term fiscal picture.”

Orszag also writes: “How much savings is plausible on the spending side? … The health reform act included substantial savings in Medicare and Medicaid, so there aren’t further big reductions available there in our time frame.”

That is just plain false. Substantial savings can be found if we repeal Obamacare. As James Capretta has pointed out, repealing Obamacare would save us $4.4 trillion [4] between now and 2030.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/09/07/debunking-orszags-tax-hike-myths/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/empty-pockets.jpg

[2] The New York Times: http://www.nytimes.com/2010/09/07/opinion/07orszag.html?ref=todayspaper

[3] Obama Tax Hikes Defended by Myths and Straw Man Arguments: http://www.heritage.org/Research/Reports/2010/09/Obama-Tax-Hikes-Defended-by-Myths-and-Straw-Man-Arguments-Summary

[4] repealing Obamacare would save us $4.4 trillion: http://www.foundry.org/2010/09/02/the-repeal-windfall/

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