December 22, 2010
Much has been said about the tax hike-prevention agreement between President Obama and the congressional Republican leaders. Well-intentioned conservatives have raised legitimate concerns about some aspects of the agreement.
Those concerns bring to mind a pointed question by Barry Goldwater: “Where is the politician who has not promised to fight to the death for lower taxes — and who has not proceeded to vote for the very spending projects that make tax cuts impossible?”
That’s the key point because everyone knows Washington doesn’t have a revenue problem; it’s got a spending problem. And how is that spending fed? Through increased tax revenue. Just over a month ago, the president admitted he wanted the top income tax rates to expire because he had better ways to spend that money.
So the question becomes: Why would anyone who wants to prevent this government from spending more of the American people’s money, vote to give this liberal White House $721 billion in tax revenue to keep the spending binge going?
One of the central critiques of this proposal is that there’s too much spending with an unpaid-for extension of unemployment insurance and some tax provisions that were in the stimulus that act more like welfare.
The better course would have been to ensure the unemployment insurance extension didn’t add to our already sky-high deficit and that the so-called stimulus tax pieces be allowed to expire. Since early March, Senate Republicans have held that view and fought at each juncture to ensure the unemployment extensions were paid for. But they were rebuffed at every turn by Senate Democrats.
Despite the fact that nearly two-thirds of this package is solely an extension of the tax relief enacted in 2001 and 2003, some argue: Why not wait until after January when Republicans control the House to get a better deal, or hold out to make all the tax provisions permanent? That passion is important to our cause, but it’s a gamble with questionable odds. Democrats still control the White House and the Senate. Blaming conservatives, they’ll drag their feet while secretly celebrating the prospect of filling Washington’s coffers with even more taxpayer money.
Furthermore, the fallout from failing to act would have been hard-working families and small businesses who’d see lower paychecks starting on Jan. 1. Experts say the damage to the economy would also be significant. Holding out would mean that almost 152,000 Utah families would be hit with a “gotcha” tax increase in the form of the Alternative Minimum Tax of more than $2,000 per family.
To those who believe that instead of this proposal, we should be undertaking wholesale tax reform: you’re right. We need to reform our tax code to broaden the base while lowering rates to make our economy more competitive. But there’s no time to reform the code before Jan. 1. Now these tax hikes have been stopped, we can begin the long-overdue national discussion about overhauling our overly burdensome and inefficient tax system.
Some have asked, why give the president a win? Let’s examine that proposition. For two more years, the tax policy that conservatives support will be continued, despite this president’s saying he wants to sock it to the millionaires and billionaires who in reality are our job creators. The White House has said they want this fight going into the presidential election to show the differences between the parties. If the president wants to have that discussion, let’s oblige him. Fiscal conservatives believe in limited government, lower taxes and lower spending. That’s a position the American people have and will continue to support.
The American people will decide whether they support our and Senator Goldwater’s vision that we must keep taxes low to return to a path of prosperity. In the meantime, this bipartisan tax agreement, as flawed as it is, prevents a broad-based tax hike from strangling economic recovery. It allows the American people to keep more of their hard-earned money instead of handing it over to the federal government.
Orrin Hatch represents Utah in the United States Senate. Grover Norquist heads Americans for Tax Reform. State Sen. Howard Stephenson represents Salt Lake County and is the head of Utah Taxpayers Association.