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  • Boehner's Olive Branch: More Revenues, but Only Through Growth

    Sometimes in post-election America, there is excitement about what the future will bring. This time around, the prospect is rather horrifying. America is racing, pedal to the metal, toward the fiscal cliff—a mixture of tax hikes and defense cuts that loom just after New Year’s.

    The same Congress and the same President, unable to avert the cliff during the past 12 months, now have a few short weeks to get the job done. This crisis is one entirely of Washington’s own making, and the stakes are high. But next—and perhaps even more ghastly—we are fast approaching the debt limit. So, what to do?

    House Speaker John Boehner (R–OH), after congratulating the President on his re-election, delivered a firm vision of how to move forward. As he noted, we don’t want to go over the cliff, but we cannot solve our long-term fiscal imbalance overnight. Lawmakers should now begin to press for agreement on permanent, substantial spending reductions in entitlement programs to take effect very soon in order to defuse a highly politicized battle over the debt limit, now expected in early 2013. Yet the President has been relentless in calling for a “balanced approach” to our spending and debt crisis.

    As Boehner noted, a balanced approach is not balanced if we:

    • Don’t cut spending and reform entitlements,
    • Slash defense, or
    • Raise taxes, hurt small business owners, and cost jobs.

    Even today, after Boehner’s offer, the President steadfastly insisted on anti-growth tax hikes, noting that we “can’t just cut our way to prosperity.” Evidently, he wants to tax his way to prosperity.

    So here’s the challenge: Is there is a way to generate more tax revenues and give the President what he asks for that conservatives could agree to? Boehner hit it squarely on the head:

    Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform. [Emphasis added.]

    This is what conservatives believe. Pro-growth tax reform would deliver a stronger economy. A larger pie for all means that individuals, savers, and businesses will have more income. Fewer Americans would need unemployment benefits or anti-poverty programs, so spending would decline. And tax revenues would grow—without tax hikes on small businesses or investors.

    Details are important, though. Pro-growth tax reform is revenue neutral, using traditional revenue scoring and raising the same amount of money the old system would. That means no Bowles-Simpson-like “grand bargain,” which eliminated various credits, deductions, and exemptions and lowered some rates partially but tapped $1 trillion for deficit reduction.

    And eliminating the “special interest loopholes and deductions” that Boehner spoke of should be fully offset by bringing rates down across the board. The lower the rates—including the top rates and those on capital—the more growth and revenue. The additional revenue comes from the additional economic growth that traditional revenue scoring explicitly ignores.

    And, as Boehner said, these new revenues should go forward with, and preferably preceded by, spending cuts and entitlement reforms.

    The first order of business for post-election Washington is to steer clear of the fiscal cliff—no crushing tax hikes and no reckless cuts to defense. Congress and the President should then get a head start on preparing for substantive spending cuts and entitlement reforms, agreed to early next year, that will eliminate the need for another dangerous and deliberately high-stakes debt limit battle.

    Raising revenues by hiking taxes is a non-starter. If the President wants more revenues, he can have them through pro-growth tax reform that generates more revenue by economic growth alone.

    Posted in Featured [slideshow_deploy]

    27 Responses to Boehner's Olive Branch: More Revenues, but Only Through Growth

    1. Bonnie Kauth says:

      Brilliant idea….simplify the tax code. Now the question….will Boehner stick to it ?…Doubtful…

      Dems idea of 'compromise' is that Repubs move to their 'enlightened' point of view !!!

    2. Chalupa says:

      Just give them everything they want. The electorate right now needs a picture drawn to them of how the democrats policies are wrong for the country. Quit saving them from failure.

      • Lloyd Scallan says:

        The question is can the U.S. survive if we give the Dems everything? If the "electorate" was stupid enough and socialist enough to vote Obama back for another four years, we could have the greatest artist that ever lived paint a mural the size of the Sistine Chappel they still would'd see the big picture.

        • roland says:

          "…they still wouldn't see the big picture. "

          Yes. That's probably true. We'ld just be looking the details, pointing out numerous flaws in the things that are meant to hold the whole thing together.

        • It is tough to see the big picture when they are focused on punitive action against the evil rich.

    3. Leif Wold says:

      President Obama's platform indicates that he wants control of the most intimate details of your family's life. The shortest route to his destination is over the cliff and through your front door.
      A comprehensive effort to delay enactment of his policies is needed.

    4. Joe Steel says:

      When will conservatives learn? All their schemes have led to nothing but economic devastation. It's time for them to stand back and let those who understand the economy run it.

    5. Jim Collins says:

      Totally agree. Unfortunately, Boehner doesn't have the "backbone" to stick to his game plan. Congress appropriates the money, not the President.

    6. Sandi says:

      Are you kidding me. I voted Republican but I now see that all the Republicans want to do is get rid of the "old folks", stop their healthcare that they and their employers contributed to the 42 years I have been working, and I still am working contributing to Medicare. Believe me Medicare is not a good program but there are some of us, single women either divorced or widowed at the age of 65/66 that do not have the money even though we worked all of our lives. I for one had to bring up a child on my own, worked two or three jobs at a time, did all I could do to earn a living. Now you want to take alway or lessen the already bad program in place for medicare. What about getting rid of all the illegal people working here and not paying any taxes, or how about all those people on welfare that are cheating the system because they are not disabled. When is the Government going to stop punishing those that have worked all their lives and paid taxes. This County is becoming the joke of the world. Maybe us old folks should move to China where they honor their elderly, not punish them for living.

      • Damien says:

        Here is an example of the kind of people who voted Obama/Biden. Joe Biden, to a cheering audience, praised Obama for extending Social Security to….. 2024. Believe it or not, the crowd went wild. Fools! Do you realize this means Social Security is broke in 12 Years? Do you realize you will get NOTHING if Obama's "policies" continue? Apparently not. I guess you figured you'd be dead by 2024, so who cares what happens to America after that right? At least you got full benefits!

        Another thing. All that money pumped into Social Security. Just think if it was all pumped into private 401K's. Do you think all of the 401K accounts for every senior and every working adult would be empty in 2024? Thought not. Put the propaganda down people and learn critical thinking skills. Broke in 12! Broke in 12! Greece in 4! Greece in 4!

        • Perdido says:

          The US Gov't will confiscate the 401ks and the other private retirement accounts. They can do it legally and the huge amount of money hanging there like luscious, low hanging fruit is irresistible.

          The US Citizen's greed and ignorance will eventuate their penury.

      • John W. says:

        Not true. Ryan said it over and over till blue in the face. Nothing changes for those 55 and older. Those younger could opt to stay in the SAME plan or go with a reformed plan. One more time Sandi, Republicans do not want to get rid of the "old folks". That is propaganda from the Democrats who love to scare and lie, lie, lie!

    7. VaGentleman says:

      Until the House Republicans find some way to make it clear their opposition to tax hikes is something besides "obstructionism," we don't have many options. BHO and the complicit media always seem successful at portraying the House Republicans as "obstructionist" rather than as "responsible leaders."

    8. Robert says:

      Unfortunately the rep got pictured as the problem and loss some important seats in congress, but what really happen is they stopped what happen in the first 2 years of Obamas dem lead congress of obamacare economy is failing and he pours everything into another spending bill or whatever you wanna call it. Oh ya 1 trillion a year into food stamps

    9. Renaus says:

      Boner is a waste. He needs to step down! Boner’s had 4 years to do something, albeit, anything about Obama flouting and circumventing the Constitution. Boner is too weak. Since Congress controls the purse strings and flow of money out of DC, I would like to see Congress fail to spend money we don’t have on Obamacare for starters. Congress should also fail to allocate money to pay for the EPA, NEA, Education, etc. Take a play from the liberals own play book and just do it (as Bill Clinton would say) and then let them take them to court.

      • Smeethow says:

        Boehner has been speaker of the house for 2 years. Since the 2010 election. But I would like to see him be more forceful in stopping the wild spending increases

    10. VA Curmudgeon says:

      One of the foundational assumption of this post is that an increase in taxes, especially to those with taxable income above $250k, will hurt small businesses owners and cost jobs. First, jobs are created when there is an increase in demand. In addition, a Congressional Research Service report (R42729), released in September stated:

      "Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution."

      • Mike, Wichita Falls says:

        If the federal register, the debt and the baseless printing of money had not grown out of control during this same time period when top marginal rates were dropping, GDP growth would still be good.

        While there may be more money in the hands of the private sector, compliance with laws and regs, looming future liabilities and a devalued dollar more than counteract it.

        Government is the problem not the solution.

    11. Paul Terry Stone says:

      Hopefully Obama has the take it or leave it option. What difference does it make whether we go over the Fiscal Cliff by this in a few days or by continuous long term debt sooner or later? We might as well get it over with.

      • roland says:

        So would the Dems or the Reps make out better in 2014 if we were to go over the cliff? Could be the Reps get blamed for the commotion for blocking passage of a bill. Or could be O'blama gets the rap and the Dems look bad.

    12. O_Henry says:

      Reasonable people CAN come up with reasonable approaches to a solution. I am not sure with all of the HUBRIS in all sectors of Washington DC that reason counts for anything…… We will know the full answer to this in less than 6 months.

    13. bluetick says:

      Boehner will fold like a sack of grits. His leadership has been a disaster

    14. Pete Meuleveld says:

      I agree with Chalupa. Republicans should oppose but not obstruct. Pres. Obama says he has all the answers – let's let everyone find out. Any obstructions will only be used by the Dems as excuses for failure – with help of our corrupt media folks.

    15. akfixer says:

      Very simple. Do as good business do when the balance sheet is out of balance. They fire people.

      Just keep firing bureecrats until you balance the budget.

    16. BigJohn555 says:

      Before one can talk about any reform of any thing related to government or the economy, one must know that what Mr. Obama wants is "chaos," so much chaos that the American people will accept socialism or possibly communism just to regain a sense of normalcy in their lives.
      Until you realize this fact, you will never understand the man or his ways. He is probably the most devoted President we have had since FDR, and possibly even since Lincoln. He is not devoted to America as we know it, but to changing the American Dream from a dream of equal opportunity to one of equal results, socialism and/or communism. He has no appreciation of the fact that America has brought and/or saved democracy and liberty for more people in the world than any other power ever present on the Earth. He feels that America, as we have known it, is an evil country that has raped and pillaged all over the world.
      He also has the complete dedication of the main stream media. No matter what happens, or how bad it gets, no one in the media will point a finger at the "Great Uniter," who has done more to divide the people of this nation than anyone else in history since the Civil War.
      The Encyclopedia set my parents had when I was in elementary school had a section about "The World War." Later versions talked about "World War I" and "World War II." I hope that our encyclopedias printed after the Obama presidency don't have chapters about "Civil War I" and "Civil War II."

    17. Donald DaCosta says:

      I'm reminded of the movie title, "The Never Ending Story." Can the Democrats and their loyal supporters think beyond the simplistic? Who can say with certainty but their stubborn insistence that increasing tax revenue can only be achieved by raising tax rates, on their favorite villains, the rich, indicates that “simplistic” reins supreme.

      There is rarely, in the distant background, the argument that policies that increase economic activity increase GDP, the ultimate source of all tax revenue. Conservative policies designed to increase economic activity in the private sector are either anathema to Obama or not understood or both. Anyone that believes that government spending a dollar equals a privately owned business or average citizen spending a dollar is an Obama voter, which is why America is in trouble.

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