The Fiscal Cliff's Not the Problem

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Cato Institute:

 

The Fiscal Cliff's Not the Problem

 

 

by Daniel J. Mitchell

 

Daniel J. Mitchell is a senior fellow at the Cato Institute.

 

Added to cato.org on December 3, 2012

 

This article appeared on New York Post on December 3, 2012.

 

Washington is consumed with wrangling over how to deal with the specter of big automatic tax hikes that will hit Jan. 1 when the Bush tax cuts expire. It's also the day that the sequester kicks in, which is the budget-wonk term for an automatic process that will slow the growth of government spending over the next 10 years.

 

This is the so-called fiscal cliff; it's a fight that has important implications, particularly since some of the tax increases will have a significantly harmful impact on incentives to work, save, invest and create jobs. In a competitive global economy, for instance, it is bizarrely self-destructive to increase the double taxation of dividends and capital gains.

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White House: Time for GOP to make counter-offer to Obama

 

By Justin Sink - 12/03/12 02:23 PM ET

 

 

The White House is pressing Republicans to make a counter-offer to President Obama’s proposal to avert a collection of scheduled tax hikes and spending cuts that could cause a recession next year.

 

White House Press Secretary Jay Carney said House Republicans should lay out their plan if they find Obama’s offer of a $1.6 trillion tax hike unacceptable.

 

“If they have ideas that are different from ours... we can't guess what they are,” Carney said. “They have to tell us.”

 

Carney added that a GOP proposal needed to include an acknowledgment that rates on the top 2 percent of earners would raise, saying "the American people overwhelmingly disagree" with Republicans who want to maintain Bush-era tax rates for all taxpayers. http://thehill.com/blogs/on-the-money/domestic-taxes/270625-white-house-time-for-republicans-to-make-a-counter-offer

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How to tackle entitlements and avoid the cliff

 

 

December 02, 2012|Pat Toomey, U.S. senator from Pennsylvania

 

"... The vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements, would prefer, frankly, not to have to do anything on some of these debt and deficit problems. . . . And what I've tried to explain to them is, number one, if you look at the numbers, then Medicare, in particular, will run out of money, and we will not be able to sustain that program, no matter how much taxes go up. I mean, it's not an option for us to just sit by and do nothing."

 

- President Obama, July 11, 2011

 

Pat Toomey is a U.S. senator from Pennsylvania

 

I agree with President Obama. No matter how much we raise taxes, we cannot avoid a fiscal disaster unless we address the true drivers of our out-of-control deficits - namely, our entitlement programs. The reality is that the federal government doesn't have a revenue problem. It has a spending problem.

 

Over the last 10 years, federal tax rates have remained constant, while spending has doubled. Under current tax rates, we nearly balanced the budget in 2007. But recently, spending has surged to post-WWII-record levels even as a percentage of our economy. This spending explosion has resulted in massive, trillion-dollar-plus deficits, casting a pall over our economy that continues to cost us jobs and growth.

 

Meanwhile, our entitlement programs are growing at unsustainable rates http://www.philly.com/philly/opinion/20121202_How_to_tackle_entitlements_and_avoid_the_cliff.html

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December 3, 2012

 

I'll See Your Economic Collapse and Raise You National Demise

 

By Selwyn Duke

Being just weeks away from reaching our debt ceiling and with frightening talk about a fiscal cliff, there's much sympathy in Washington for tax increases. Even conservatives are wavering. A few Republicans have dumped their anti-tax pledges, and former Nixon official-turned-actor Ben Stein favors taxing the wealthy. He says that we can't cut our way to a balanced budget and insists that the revenue end must be addressed. But I have news for him: he'll have a better have news for him: he'll have a better chance

Ferris Bueller on his day off than he will locating fiscal sanity through tax increases.

 

Let's get real. Federal revenue this year will be approximately $2.5 trillion.

 

That's $2,500,000,000,000.

 

How much, again? Well, updating some examples Rob Bluey provided at The Foundry lends the following perspective:

 

http://www.americanthinker.com/2012/12/ill_see_your_economic_collapse_and_raise_you_national_demise.html