By Patrick J. Buchanan
Were the average Republican asked for a succinct statement of his views on taxation, he or she might respond thus:
“U.S. tax rates are too high for the world we must compete in. The
tax burden — federal, state, local, together — is too heavy. We need to
cut tax rates to free up our private and productive sector and pull this
economy out of the ditch.”
This core conviction holds the party together.
Yet today the leadership is about to abandon this conviction to sign
on to higher tax rates or revenues, while the economy is nearing stall
speed. Yet, two years ago, President Obama himself extended the Bush tax
cuts because, he said, you do not raise taxes in a recovering economy.
Why are Republicans negotiating this capitulation?
Because they have been warned that if they do not sign on to a tax hike, they will take us all over a fiscal cliff.
If we go over, Republicans are being told, you will be responsible
for tax hikes on all Americans as the Bush tax cuts expire on Jan. 1.
You will be responsible for a surge in tax rates on dividends, interest, capital gains, estates.
You will be responsible for an automatic sequester catastrophic to the national defense.
This is the pistol Obama is pointing at the GOP. This is extortion.
Republicans are being told that they either vote for something they
believe to be wrong and ruinous — or get something worse. Pay the
ransom, fellas, Obama is demanding, or take the blame for a second
recession.
Like the Panama Canal debate that made Ronald Reagan a hero, this is a
defining moment. No GOP senator who agreed to the Carter-Torrijos
treaty ever made it onto a national ticket.
What are the perils for Republicans who sign on to an Obama deal?
They will sever themselves permanently from much of the base of the
party. While their votes may ensure that tax rates or revenues rise,
they will have no assurance that the promised spending cuts will ever be
made. Even Reagan fell victim to this bait-and-switch.
Then, if the tax hikes slow the economy, Republican collaborators
will share the blame. Not only will they have gone back on their word,
they will have damaged the recovery. What would be their argument for
re-election?
If you believe higher tax rates or tax revenues would be like
poisoning an already weak economy, why would you collaborate in
administering that poison? Why not just say no?
Having lost the presidency and seats in both houses, Republicans
should not partner with a president with whom they disagree on
principle.
They should act as the loyal opposition in a parliamentary system
whose duty it is to oppose, to offer an alternative agenda and to wait
upon the success or failure of the government, as Labor is doing in
Britain and the conservatives are doing in France.
What should Speaker John Boehner do?
Tell the president politely that America’s problem is not that we are
taxed too little but that we spend too much — and the GOP will not sign
on either to tax rate or tax revenue increases. For Republicans believe
that would further injure the economy — especially an economy limping
along at between 1 and 2 percent growth.
Then Boehner should depart the White House, go back up to the Hill and urge his Republican caucus to do two things.
Pass an extension of the Social Security payroll tax cut and block
its automatic rise from 4.2 percent of wages to 6.2 percent. To raise
that tax now and scoop off the discretionary income of most of America’s
families in this anemic economy makes no sense economically or
politically.
The House should then vote to extend the Bush tax cuts for another
year, with a pledge to do tax reform — lowering tax rates in return for
culling, cutting or capping deductions for the well-to-do in the new
year.
Then let Harry Reid work his will. If the Senate votes to let Social
Security taxes rise, let Harry and his party explain this to the middle
class that gets hammered in January. If the Senate votes to let the Bush
tax cuts lapse for those over $200,000, decide in the caucus whether to
negotiate — or to go home for Christmas and New Year’s.
As for the automatic sequester that would impose $100 billion in cuts
next year, half in defense, do nothing. Let it take effect. The budget
has to be cut, and while these cuts are heavy on defense, the depth and
mixture can be adjusted in the new year.
If Republicans walk away from tax negotiations with the White House,
market investors, anticipating a sharp rise in tax rates on dividends,
interest and capital gains next year, will start dumping stocks, bonds
and investments to take advantage of the last year of lower taxes.
The market may tank. Let the party of high taxes explain it.
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