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EDITOR OF REDSTATE

The Tax Compromise Must Now Die

This is a TARP Baby not worth supporting

By: Erick Erickson (Diary)  |  December 10th, 2010 at 12:29 PM  | 

RESIZE: AAA

House Democrats have rejected the Senate’s negotiated tax compromise. In a rowdy meeting in which one Democratic Congressman said loudly “F— the President,” the House Democrats turned Nancy Reagan and just said no.

Barney Frank still thinks it would pass, most likely with House Republicans.

But the deal must now die. It must now be opposed by Republicans. Released now in print, the legislation is loaded up with budget busting pork of ridiculously absurd levels. The attachments to the compromise represent everything wrong with Washington. Many of them mirror the same porkulus spending in TARP.

The GOP must now say no. GO TO THE REDSTATE ACTION CENTER RIGHT NOW and call your Senator.

The legislation contains a huge amount of pork, some in the form of tax extenders that only the most coin-operated of conservatives can really defend. It even has ethanol subsidies. Put it to you this way — with the logic of those vocally calling for support of these earmarks, if the Democrats gave a tax credit for abortion, you’d have these same conservative groups defending them. No, that is not an exaggeration.

The tax compromise already busted the budget with the unemployment extension. Ultimately, all the Republicans were getting anyway was keeping current income tax rates.

They now need to walk away from the table. Call now.

NOTE: Senator Mitch McConnell’s office is now doing a full court press saying that the tax breaks for particular companies are not “earmarks.” Friends, an earmark is not necessarily spending money, but is a line item put into legislation or a committee report without full congressional review typically from one member of Congress on behalf of a lobbyist or donor to benefit the lobbyist’s client or the donor. How the hell is a line item related to Starkist Tuna in American Samoa carved out just for them not an earmark for one of the major employers in Nancy Pelosi’s congressional district?

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COMMENTS

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  • Kevin Allen

    I was dubious of this deal when I thought it only included the UI extension and re-instatement of the Death Tax. With all the other pork added to the bill, Conservatives need to oppose this bill. We can get a better deal in January.

  • http://seekingliberty.wordpress.com fmaidment

    Last night I opposed voting it down.

    Today, knowing more of what’s in it, I’ll take extra withholding if it keeps this mess of a bill from becoming law.

  • Death_of_the_Donkey

    at this point we have no significant spending cuts even proposed and until we see what the cuts will be and how big, I am not sure that we can afford (for the future) the extension of any of the current rates. I would much rather see what spending cuts we can make to know where we have to get to for fiscal responsibility and then start from scratch with a much better and simpler code. Even without the tax expenditures now being added to the bill, it was simply too expensive given our current run rate and the sudden realization by bond holders that our money may not be good in the future. After seeing what is happening in the EU, I would much rather pay a higher tax bill today than see our economy crippled by high interest rates tomorrow.

  • http://theminorityreportblog.com Repair_Man_Jack

    I was against this when it came out! I’m even more against it to the extent that such is possible. Or it may just be that my coin flip came up tails yesterday and has lain still since.

  • fpete13527

    It wasnt great to begin with and now it’s an Obamination.

    Put this to bed. Congress GO HOME.

  • Death_of_the_Donkey

    you may be able to get a better bill in January. It will all depend on the economic data. If the data remain strong (and the LEI’s are pointing that way for now), then the economy may just take a temporary and small (read hard to notice) hit and roll right along.

  • http://www.flaliberty.org scorpio0679

    Completely agree at this point. Whoever is seen as killing this deal is going to suffer terribly. The Democrats have officially repudiated their own president on this and are playing games.

    At this point we ought to just get a clean bill come January, without the death tax, from a Republican house and let Obama dare oppose it. If he does, he will be the one “holding prevention of tax increases hostage to unsustainable spending on entitlements.” Let him try to explain THAT one.

  • earlgrey

    Let’s KIll it or at least make enough noise about this to scare the you konw what out of the incoming fresman.

  • Wubbies World

    A strait up or down tax rate extension needs to submitted and let the Democrats say no then let them answer for it. The rest can die. The inheritance tax can be offered up as well, but let the Democrats kill it and let them answer for all the raised taxes. They did it and we can offer it again in January and again let them kill it and answer for it. It is all we can do.

    … and I would do it repeatedly – let them defend it. – Often!

    They still control Congress. Let Harry Reid be responsible for killing it in the Senate in January as well.

  • nessa

    …and hasn’t formed an opinion yet. I sent a link to his office, hopefully a staffer will keep a weather eye on the comments here.

  • streiff

    raising taxes to balance a budget during a recession is a good idea? That was tried in 1932 and didn’t work out particularly well.

  • msctex

    Give it a month, let the grownups rewrite it, and it might actually contain what it is supposed to cover and nothing else.

    One thing which might prove enormous which I have yet to see anyone fully acknowledge, is that if this does prove the case and nothing changes this year, then people will at least get a taste of what the Democrats would want them to have — or not have — in terms of their first few paychecks of the year.

    I’ll repeat what I always end up saying: Democrats’ propensity towards self-destruction can never be overestimated. And if they don’t realize the degree to which they are showing their cards, those few paychecks could prove a tremendous blow.

  • Scope

    Let it die, and, do something much better in January with a R House majority, and more R Senators. If the O says no, and the Libs keep fighting it, I don’t know if the Dems will have any representation in Washington after 2012.

  • http://www.gmsplace.com/ civil_truth

    We need something that will produce jobs and stop (or even reverse) the ongoing capital flight that is sapping our ability to recover our economy.

    In its present form, this has become TARP III (or is it IV or V, I’ve lost track) – more deficit, more misspending of the revenues, more feeding the Federal leviathan at the expense of the private sector.

    And at this point in the bill process, investor confidence in the U.S. political process and U.S. business friendliness has fallen to nil.

    Thus, a two year extension of the Bush tax-cuts at this point (which is the only thing remotely Republican/conservative friendly) will have no change on the current hemorrhaging of the private sector – only a permanent extension, or better yet a permanent cut in the coming tax bill will start to turn things around.

    Thus we will gain nothing for giving so much away, and probably this bill will throw away the 2012 elections for us.

  • http://seekingliberty.wordpress.com fmaidment

    Current tax rates can’t sustain the budget.

    Know what I did when my spending out-stripped my income?

    I CUT MY SPENDING! Just like most people in the US!

    Maybe those Congress Critters could use some learnin’ from their constituents…

  • Scope

    Let everyone see what their paychecks will be for a few weeks into the new year. That should take care of the Dems for a long time.

  • http://www.gmsplace.com/ civil_truth

    The second half of my last sentence was too strong.

    Looking at this sentence again, what I really mean is that this bill could help set us up for a loss (or at least a disappointing outcome) in 2012 elections (I’m thinking particularly of Congress, the Presidency is a total wild card) because this bill will be hung around our necks like an albatross in the next election cycle.

  • izoneguy

    This is a bad deal all around….
    I was mad with the first proposal and now the dems are larding it up with pork to make the socialists happy?

    Afraid that won’t fly. We won. Screw you.

    The Republicans need to hear us loud & clear on this one……

  • Scope

    I’ve asked before why we have to make the current rates permanent when we are demanding that spending in DC be cut. With less spending, we could lower the tax rates. Isn’t that a Tea Party and conservative goal?

  • Death_of_the_Donkey

    The economy grew like gangbusters from 33-38 with real GDP rising from roughly $720 billion (2005 dollars) in 1933 to over $1000 billion by 1937. In our case, it may help as it would a) keep the bond vigilantes away (and lower rates will have a far greater positive economic impact than marginally lower taxes); b) strengthen the dollar, thereby reducing commodity expenditures and acting to offset some of the tax burden from the middle class; and c) allow us to address the whole code at once from a much sounder fiscal position.

  • Goldwater_Conservative

    anything, and it looks like that is what they are trying to do, from the original deal that McConnell and Obama struck, that will give the GOP the high ground to break with the deal as a whole saying they backed out of the deal we agreed upon and vote against it and look to have the high ground as well.

  • reddog53

    Pork Futures are skyrocketing and horse trading is exploding!

    This is not the way to determine the economic future of our nation. The Senate Republicans should have nothing to do with this bill.

  • http://theminorityreportblog.com Repair_Man_Jack

    I’d say “our friend” Sen. Weed turned it into the DC franchise of Joe Conforte’s Mustang Ranch.

  • earlgrey

    and what will it be 5 minutes from now.

  • Death_of_the_Donkey

    if the economy keeps improving (and maybe a good January jobs report), coupled with a real possibility that the stock market could shrug this off (again in face of an improving economy), then rates will stay high (or Obama will get what he wants).

  • azgirl

    offices this morning. I told both of them that the amount of spending (ie: pork) in this thing is nauseating. We don’t have the money for this. And they should vote it down. And be vocal about their objections to it too.

    In addition, I also sent a message to Leader McConnell’s office as well. (His Washington DC line was busy….gee, I wonder why?) We all need to call their offices and scream bloody murder about this. We need it to fail…

  • Tbone

    How about we start by trying NOT to pass bad bills.

  • azgirl

    …do the Republicans have the courage and intelligence to do it? At this point, I am not so sure….

  • smitch61

    Re-visit it in January… without the BS in the bill, included with true tax cuts for everyone. Make them pay for the unemployment with unused stimulus (since Nancy states it is stimulus). Make them use it.. and finally, go out and pitch it.

  • IJB

    A number of us having been saying that we should let this die for the past 3 days, and it’s only gotten much WORSE since then.

    But, the best part is – we can let the Dems do the heavy-lifting on killing this monstrosity, AND blame them for it.

    It’s the Best of Both World!! :)

  • johnt

    Raving, take no prisoners,minimalist freaks, people who regard da guvmint as a kind of typhoid fever, some kind of filth to be swept from your door step, the type of person that National Review would ostracize, give David Frum migraines and ,ugh,Kathleen Parker lower abdominal cramps.
    Why the rush to do it now? Because GOP leadership thinks it would be too difficult to do in January with all those unwashed newbies.
    You might have to adhere to the principles of restraint and control over the beloved Federal Beast.

  • izoneguy

    http://www.cspan.org/Watch/C-SPAN2.aspx

    But the war on producers is getting old…..

    Rush is slamming Bernie right now as well….

  • BigGator5

    Bernie Sanders is complaining about funding for infrastructure. Wasn’t that the point of the 2009 Stimulus??

  • izoneguy

    N/T

  • Common_Cents

    I am tired of DC playing the tax revenue fairness solution game when the overwhelming evidence shows that tax receipts swell when business creates jobs and GDP gets expanded.

    I want CONgress to look me in the eye and say they judiciously spent every one of my dimes before they take one more from me. None of them could do it with a straight face and their hand on a bible. Well, maybe a few could since they are professional liars.

  • gekster
  • Castor

    will be as sticky as Uncle Remus?s tar baby for those who vote for it!

  • johnt

    and yet it’s always in need of repair and improvement.
    Gee, I wonder if we’re being lied to or are they really that nuts.
    A little of both?

  • izoneguy

    http://twitpic.com/3eq4lu

    Obama Hands Off to Clinton to Get Tax Bill Over Goal Line

    http://www.foxnews.com/politics/2010/12/10/facing-anger-left-obama-meet-clinton/

  • Marcus_Traianus

    I prefer to look at 1981 when Republicans enacted the largest tax cut in history which came to about over $750 billion in six years. GDP went from 1981 – $3.126 to 1987 $4.736.

    By the way the period from 1933-1937 has numerous extenuating factors that affected GDP. That would include the fact 2/3 of what Roosevelt was trying to do via AAA, NRA, etc. (which had price fixing, et al) was declared unconstitutional. Plus the PWA, etc. put tons of people on the government payroll. And so on and so on.

  • Death_of_the_Donkey

    trying to claim the the tax hikes helped GDP, only to disprove the idea that they pushed us further into depression as Streiff insinuated.

    As for the ERTA cuts from 1981, I do not give them nearly as much credit for the economic resurgence as the defeat of inflation and the subsequent lowering of interest rates by the Fed. The economy turned on a dime in late 1982 and it matches almost perfectly with the Fed actions and inflation declines. Also, Reagan did then “raise” taxes in 1982 and again in 1986, which again goes to show that during an expansion, taxes can be raised without a large economic impact provided that the government was running deficits at the time of the tax hike (ie it wasn’t to create new spending).

  • tergent

    Youu might be right about the pork, but the tax cuts must be continued. The effect on the economy after the tax cuts were put in place was considerable. This reminds me of a post on www.freemarketsfreepeople.net “Bush tax cuts caused the recession?”.

  • Marcus_Traianus

    Absent all the other Roosevelt economic -GDP gymnastics the tax increases were a negative.

  • earlgrey

    I can’t stand Benedict Nelson so I called his office to ask about the poll of physicians showing they were retiring, and then made a snarrky comment about how Nelson was sure to vote for the tax bill because it had pork.

    Staffer: What do you think is it in it that is pork?

    Me: Ethanol Subsidies.(more energy to make ethanol than we get from iti)

    Staffer: Do you know how many jobs are in the production of ethanol from corn.

    Me: So you an Senator Nelson believe the government should be deciding what industries thrive and which do not?

    Staffer; OK so you don’t like heatlhcare.

    THese people are so out of touch and they don’t care how much damage they cause they just see something wtih everything the free market touches. Even the so called “conservative democtrates”

  • joayn

    Kill it.

  • Death_of_the_Donkey

    oh wait, you can’t. The fact is that once an expansion is underway, it is very difficult to derail it no matter how much we may not like tax increases. Economic momentum is difficult to just shut off with tax policy since the economy is much more dynamic than its response to just one input (see tax increases in 1982, 1986, 1993, etc). Of course tax increases are a negative (under normal economic conditions, which we do not have today), but they are not a big enough negative usually to undermine an expansion by themselves. And, as I stated above, considering our current deficit/debt situation, some aspects of a smaller deficit (regardless of how it is achieved) will be economic positives (ie a stronger dollar, lower interest rates, lower commodity prices).

  • joayn

    enjoy the comments! Looks like nobody’s buying what they’re selling.

    http://atr.org/update-days-untilbr-largest-tax-hikes-a5418#

  • itrytobenice

    lean forward. Or is it bend over?

    Her position is diametrically opposed to the conservative position. I don’t even have to ask anymore.

  • itrytobenice

    I love it when citizens tell our rulers the truth about their policies and lies. This should happen way more often.

  • eastbaylarry

    under a significant tax increase?

    Where can I get some of what you’re smoking?

  • izoneguy

    Increasing taxes won’t help anyone. The left would be giddy with
    unrealistic expectations of what higher taxes would mean. I work with small business owners everyday. I have not seen this much despair & gloom in 20 years. Holding the line is what the next 2 years will be about. The economy won’t magically take off even if tax rates were slashed. ObamaCare is the sword that is at everyones neck and promises to do much more damage then even tax increases would do. You cannot even talk about going forward until ObamaCare & the Obama agenda is in the trash heap.

  • eastbaylarry

    but it would sure as h3ll take a dive if taxes went up.

    I agree that ObamanationCare must go, but today we’re talking about straight taxes. We must take one hill at a time.

  • swamphermit

    Republicans – top to bottom – let the Democrats off-the-hook right from the starting gate (before it even opened).

  • drfredc

    The GOP Losership (Mostly in the Senate but there are House Losers too), just don’t get what this election was all about — markets. OK — yes, granted the Tea Party didn’t articulate the message in this fashion — the Tea Party articulation was mostly about bring attention to the symptoms of the disease of political manipulation of markets. It was about a revolt against more and more special deals for this or that special interest.

    But what the Tea Party revolt is really means its ENOUGH ALREADY WITH SPECIAL INTEREST EXEMPTIONS AND DEALS THAT GO AGAINST MARKETPLACE RULES.

    This means NO MORE cornahol deals, NO MORE special union deals with falsely inflated wages, early retirements and taxpayer backed defined benefit plans, NO MORE bailouts of special interests from taxpayer wallets, NO MORE special union deals on prevailing wage, NO MORE special interest judicial appointments (back to the constitution), NO MORE special interests taking of the liberty from average citizens thru regulations, etc, etc.

    It’s time to get back to Constitutional principles as defined in the Preamble — promote the general welfare (not special interest welfare) thru promotion of widely varied markets, including social marketplaces. Do promote policies that promote individual liberty AND the liberty of our posterity — DON’T buy votes today with the labors of future generations. It’s long past time that entitlements be reformed towards generationally based social marketplaces so that each generation pays for it’s own social needs. On can also interpret the preamble to define how budgets are supposed to be balanced to promote the GENERAL WELFARE without special interest exemptions and without taking liberty from ourselves and future generations.

    It’s time to bury FDRs bankrupting notion that the Commerce clause is all about a prescription that allows the federal government to ‘provide for the general welfare’. Sure, it has this power, but the definition of how this power is to be used is defined in the Preamble — to promote the general welfare (not special interest welfare), while preserving liberty for ourselves and our posterity.

    The GOPs LOSERSHIPs problem is they are pretty much all about the same abuse of markets as the Obamacrats. They just want to do it differently, to different special interests in some cases, or just more of the same, so long as those special interests donate more and more to the LOSERSHIP reelection coffers.

    In other words, the LOSERSHIP DOES NOT GET IT. They are part of the problem, not the cure…

  • wattchildress

    Erick’s post inspired me to go back and look more closely at the roots of the Boston Tea Party. Will today’s Tea Party Patriots celebrate the death of this bill in commemoration of that revolutionary event?

    http://www.redstate.com/wattchildress/2010/12/11/king-obama-the-east-india-republicans/

  • Marcus_Traianus

    Tax cuts during the 1920′s spurred economic growth and are a much better model than the 1930′s tax increases.

    Egregious tax increases during the 1930′s created huge deficits, stagnated the employment situation (almost 25.2% unemployment), stagnated the economy, almost never achieved their financial goals and overall reduced economic growth. Period.

    Like I said, he was right.