Higher Taxes Looming in Lame Duck
The greatest threat to conservatives in the Lame Duck Congress is a tax increase. The President’s National Commission on Fiscal Responsibility and Reform is expected to issue a report on December 1st. Conservatives should be very worried that this commission will advocate tax increases as a means to balance the budget.
There is also a plan to decouple the Bush Tax cuts to make it easier for tax cuts for job creators to expire in a few years. If the Obama Administration does not back away from the original plan to preserve lower taxes on those earning under $250K a year and allow taxes to increase on higher earners, there may be a stalemate. Stalemate equals increased taxes on all Americans.
The President’s Commission has been very secretive and has not allowed details of any proposed plans to leak to the press. Conservatives worry that they have been very secretive, because they didn’t want planned new tax increases to leak out to the American people before the election. Two Senators waited until just after the election to request that the Commission adopt a radically increased gas tax.
The Hill reports:
Sens. Tom Carper (D-Del.) and George Voinovich (R-Ohio) have written to the chairmen of the National Commission on Fiscal Responsibility and Reform advocating for a 25-cent per gallon tax increase. “We suggest that the commission include an increase in the federal tax on gasoline and diesel as part of your report to the president,” they wrote. “We suggest that the taxes be increased by one cent per month for 25 months — a total of 25 cents over a three-year period.”
The current federal gas tax is at 18.4 cents per gallon. The Carper-Voinovich plan would increase the gas tax by one cent every month for the next 25 months. The Hill reports that this “the tax increase, when fully implemented, would cost drivers on average $156 a year, or $13 extra per month.” Adding a new tax burden on the already overtaxed American public is a big mistake.
As the President’s Commission weighs new tax increases, a debate over whether to allow the 2001/2003 tax cuts expire on January 1, 2011 seems to have hit a road block. The Obama Administration has a new plan to squash all of the Bush Tax cuts with the exception of those for middle income earners by splitting the issue into two parts. Curtis Dubay of The Heritage Foundation explains new tax plan as follows:
Their new plan, according to Politico, is to raise the threshold of what is “rich” from $250,000 of annual income for a family to $500,000 or $1 million. The second stage of the plan is to permanently separate the middle-income tax cuts from the tax cuts for the rich. They would do this by permanently extending the tax cuts for middle-income taxpayers and only temporarily extending them for the rich.
This would be an attempt to decouple the issues, so that the President could veto any efforts by Congress to preserve current tax rates on job creators without impacting the Obama favored tax brackets. This is a trap that liberals are setting to make sure they get rid of tax cuts for higher earners in a year or two.
As so many conservatives have pointed out, this federal government does not have a revenue problem, it has a spending problem. New tax increases and allowing the 2001 and 2003 tax cuts to expire would run contrary to the will of the American people. The American people voted to keep taxes low, to cut federal spending and to repeal ObamaCare — when will Washington listen.