Thursday, February 18, 2010

Surprise Tax Increases For Middle Class on the Table

The DailyCaller notes Obama has begun the CYA strategy laying the groundwork for middle class tax increases we all knew were coming anyway, by hiding behind the deficit commission he plans to appoint. While Obama famously promised throughout his campaign he wouldn't raise taxes on those making under $250,000 it was only a matter of time before Obama would look for a way to walk back that promise. He found himself the perfect foil, a bipartisan deficit commission to make the recommendation for him.

Republicans have been leary of the commission for two reasons  First it is toothless and can only recommend changes to decrease the growing deficit and second Obama was unlikely to take tax increases off the table. The panel, of course, will be overly populated with liberals and Democrats making for recommendations that are heavy on the tax increase side but for spending cuts - not so much:
Rep. Tom Price, Georgia Republican and head of the Republican Study Committee, called the panel “a political solution to a glaring math problem.”

“Since the president has unfairly given Democrats and liberals an over representation on the commission, the odds are high that its recommendations will be heavy on tax increases and light on spending reductions,” Price said.

An increase in taxes would be a potentially lethal political issue in the 2012 election, when Obama will presumably run for reelection.
Obama appears not to want to suffer the fate of George H. W. Bush when he reneged on the "read my lips" promise through an appointed panel that he can use as a foil.  Harvard economist Greg Mankiw suggests Republicans should not give that cover without exacting a heavy cost from the Democrats in return.  He outlines five goals, a combination of tax increases and decreases with heavy spending cuts all of which Democrats will find unpalatable while Republicans will have to swallow a VAT and carbon tax in return.

 I think this is too much to swallow for Republicans who would be giving the most irresponsible administration cover for outrageous spending and a failure to perform the duties of their office.  As Mankiw points out:
A reasonable position is, perhaps, that the commission should not succeed.  After all, it is the president's responsibility to put out a budget.  The one he just released is, as I explained in my recent Times column, not sustainable.  He just passed the buck to the fiscal commission.  Perhaps conservatives should not allow him to do that but, instead, should try to force him to put out a sustainable budget on his own.  After all, isn't that Peter Orszag's job?
 The Congress Obama will have to deal with is likely to be much different than the one he enjoys now.  The Republicans should have at their ready a plan for reducing the deficit of their own to counter with next December when the panel reveals their recommendations.  In fact, they should offer a plan before the panel offers its recommendations which would leave Obama owning any tax increases as he rightfully should.

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